The challenges triggered by the Covid-19 pandemic have, for a change, opened up a slew of opportunities for the footwear industry in India, with the current negative sentiments against China working in India’s favour.
The industry experts are gradually realising that the focus should now be on non-leather footwear exports as 86% of footwear, in terms of volume, consumed worldwide are of non-leather variety. This was the observation of a cross section of domestic footwear makers.
Prominent footwear makers, participating in an industry webinar recently, maintained that non-leather industry required a big thrust and it was important for all stakeholders to come together to form a cluster for building an ecosystem for the same. Covid -19 has created a great opportunity with the current negative perception against China and the industry should not miss the opportunity, the manufacturers upheld.
The virtual meet was organised by the Confederation of Indian Footwear Industries(CIFI). The CIFI members are predominantly domestic shoe manufacturers, allied component makers as well as dealers and distributors. The Indian leather and footwear industry employs more than 4.2 million people.
India is the second-largest producer of footwear globally, with 10.7% share of production while China’s share dropped from 58% in 2017 to 56% in 2018. Vietnam and Indonesia have benefited the most from the drop in China’s share. Leather footwear now constitutes 38% (by value) of total exports globally, down from 54% in 2009.
Raj Kumar Gupta, national president, CIFI, said the non- leather industry required a big push and it was important for all the stakeholders to come together on a single platform to address the industries’ woes and create a strong road map for future.
The industry leaders plan to use the lockdown time to redefine their internal processes and build a lean and agile organisation that can adapt to the changing market environment.
N Mohan, executive director and CEO of Clarks, who moderated the session, said manufacturers, brands, retailers should work collectively as the footwear industry had the potential to substantially increase employment.
India’s footwear consumption has been growing at a CAGR of 7.6%, and with the per capita consumption improving to 2 pairs per person per annum , the industry has a huge opportunity.
“For every 1,000 pairs produced and sold in India per day, we can create 425 jobs right from manufacturing to allied industries to retail. This is a great opportunity,” Mohan said.
Industry needs to focus on non-leather footwear exports, he added.
Aqeel Ahmed, chairman, Council for Leather Exports (CLE), said though there was a huge rate of cancellations due to the pandemic, he expected the businesses to shift into India. He stated that exporters need handhold to survive this crisis. Plans are being chalked out to project Brand India as the footwear destination around the world, post lock down. He asserted that the reduction in GST, especially of footwear above `1000, to a reasonable level could help improve consumption.
The panellists unanimously opined that though the industry was going through a short-time lull, the business would recover in three-four months after the lockdown is lifted, and would stabilise after six-eight months.
Ramesh Dua, MD, Relaxo footwear, said labour laws needed immediate amendments to boost entrepreneurs’ confidence to invest more in creating larger capacities. India has the capability and resources, and, with the required changes, the industry would be willing to invest in technologies if the non-leather footwear sector got undivided focus.