Showing posts with label Adidas. Show all posts
Showing posts with label Adidas. Show all posts

03 March, 2013

Flagship Stores

Fastrack 1After the successful launch of 137 stores across the country, Fastrack, the leading youth fashion accessories brand (a division of Titan Industries, part of the $85 billion Tata Group), today announced the launch of their flagship store at CMH Road, Bangalore. The success story of the Fastrack stores has been unprecedented. Since the launch of its first store in 2009, the retail channel has grown to 137 stores across 68 cities in all metros, mini metros and several smaller towns like Manipal and Nasik receiving tremendous response from its young consumers. The brand is looking at increasing the number to 250 by the end of 2014. Fastrack’s current stores occupy between 500 sq. ft and 800 sq. ft. The flagship store is spread across 1000 sq. ft. The space unfolds through a series of installations and events. A physical grid of white pipes forms the basis for a grid, from which various display systems are suspended. This meshwork of grids hides away services and lighting, and supports various display systems. The store also does not rely on conventional materials apart from a basic vitrified tiled floor, to address issues of uniformity during rollouts across various cities in India. Walls are plastered with a precise mix of cement and form a neutral backdrop to the installations.

Even though there is order in the apparent chaos, there is an underlying sense of exploring a bazaar. This format will be adapted to a multitude of retail formats, including stand alone stores and kiosks. At cursory glance this seems a daunting task, but the entire design is modular and flexible. On the launch, Ronnie Talati, Business Head & Vice President, Fastrack said, “Fastrack is an irreverent brand with in your face, tongue-in-cheek communication; always known to generate a stir, the brand has created a legion of dedicated followers and fans. Fastrack has now managed to translate the irreverence of the brand into a physical space with the launch of this new retail identity”.

Each category has a space of its own and is designed with installations unique to that category. The watches are displayed inside bird cages, the belts are casually worn around a mannequin and the theme is carried forward to poles covered in leather and studs. The bags are suspended in rope using carabiners. Wallets are meant to be pickpocketed from the back of denim jeans and lie hanging out halfway from the pockets, eye wear is displayed on bright yellow bananas. There are old beaten up trunks, floating tables, mirrors, reconditioned refrigerators, urinals and water closets used as display devices, and various objects strewn through the space. Even the transaction desk is centered in the middle of the store becoming an intrinsic part of the experience. Even the signage does not take itself too seriously, and is a riot of blinking color changing lights, set to a DMX controller, representative of lighting from the high streets of Broadway, NY. The small open space in front of the store houses a bike rack and a folding bench.

Fastrack 2

Fastrack is among those handful of brands to set-up a Flagship Store for themselves. Almost every Retail brand worth its pound would like to set-up its Flagship Store in a prime location in the region / country although only a few actually do so. And even more fewer maintain such stores well enough to call them their Flagship. Some of the other examples of Flagship Stores of iconic brands include;

Louis Vuitton
160 New Bond Street
London, England, UK

  • It features a two-story wall of trunks – to showcase the Louis Vuitton tradition of working in leather – and a glass and LED staircase.
  • The 15,000 square-foot store is designed to reflect the 21st century mood of London and bring together innovation, heritage and fashion.
  • Features a library which showcases the best of British contemporary Art Books and commissions.
  • The store’s second floor is a luxurious private client suite, which can only be accessed by invitation.

Oakley
1-4 King Street
London, England, UK

  • 4,000 pairs of the legendary Frogskin sunglasses have been used to create a chandelier in the store.
  • The store features a 12-foot tall, 800-pound metallic angel with a 25-foot carbon fiber wingspan.
  • The Oakley Custom Lab, where customers can design their own sunglasses and goggles.
  • An onsite etching machine is available for custom engraving. 
  • A 3D experience that showcases the company's innovation. 
  • The store includes a complete O Lab that utilizes lasers and impact rings to educate customers on Oakley sunglasses.


Macy's
151 West. 34th St.
New York, NY
Flagship Features

  • World's largest department store
  • 1,000,000 square-foot, nine-floor building
  • A registered New York City landmark
  • Shoe department occupies two entire floors
  • Bridal suite with a walkway platform
  • Owned and operated by Macy's since 1902

Apple
235 Regent Street
London, England, UK


  • Apple's largest store with an estimated rent of £1.5 million a year.
  • Events and workshops are held daily in the two-story shop.

Apple - Oxford StreetNokia
5 East 57th Street
New York, NY
Flagship Features

  • Second of 18 flagship locations planned for global expansion
  • High-tech decor, and cutting edge product demos and kiosks
  • Completely interactive, with an exhaustive range of products, accessories, 3rd party devices, and mobile technology
  • Fully functional multimedia environments for testing all products
  • Staff members are all graduates of Nokia Academy

Tiffany's
Fifth Avenue and 57th Street
Manhattan, NY
Flagship Features

  • 124,000 square-foot legendary retail location since 1940
  • U.S. National Register of Historic Places
  • Made famous in the film, "Breakfast at Tiffany's"
  • Polished granite exterior, doormen, Alpine marble, and breathtaking chandeliers
  • Private selling salons with platinum ceilings
  • Fifth floor entertaining and exhibition area
  • Houses Tiffany & Co. Archives

Flagship Stores add a strategic advantage to the Brand as compared to normal stores. Potential customers visit these locations to know and explore the brand in detail, to appreciate the beauty and background of the brand and most importantly, to also buy – conversions are usually higher at these stores than the usual retail lot. In some cases, the Brand showcases certain products exclusively in the store after which they are sent to the rest of the Retail network. This practice is usually condemned by the trade, especially when Franchises are involved although the gap between the time to launch at the Flagship Store and other stores is too narrow these days, usually under a fortnight. Overall, it is extremely important for Brands to have a Flagship Store. Usually, it is quite easy to put up one, the challenge is to showcase and maintain them in the long term.

08 June, 2012

Franchising–The first step towards Entrepreneurship

 

Gitanjali

Franchising has been around for long. Many global brands such as Adidas, Benetton, Levis, Subway and a lot more have grown globally due to their extensive franchisee network. Even in India, Madura Garments (which owns brands such as Peter England, Louis Philippe, Van Heusen), Arvind Mills (Lee, Wrangler and Arrow), Nilgiris (a chain of Supermarkets), Gitanjali Limited (which retails brands such as Asmi, Gili, D’Damas, Lucera, etc.) Crossword Book stores, Barista (Café chain) and many other Retailers have grown their businesses through successful Franchisee Partnerships. Franchising offers a quick scope of expansion for the Retailer while the investment is incurred by the Franchisee. Many first timers and wannabe Entrepreneurs choose the path of Franchising because it is an easier model to crack – the brand (is usually) established and has equity in the market, which pulls footfalls in to the stores. In case the brand is relatively new, then the Franchise fee (usually a one-time fee paid by the Franchisor to the Franchisee) is low, keeping his / her investments within reach. Kaatizone, an Indian QSR chain with a presence largely in South India is on an expansion spree through Franchising. Mr. Kiran Nadkarni, CEO, Kaatizone told in an interview recently. “Franchising has helped us in two major ways: We have been able to generate momentum in expansion quickly. Secondly, the local entrepreneurial talent has helped manage the store operations and brand experience better. Since we are planning to set up a large number of stores, franchising is the best strategy for growth.” Kaatizone has 19 franchises in six cities now and is planning to expand across the country.

The gestation period for recovery of investment can vary from 6 months to 3 years, depending on the location of the store (Malls, High Streets, Corporate locations,etc.) product category, and Brand identity and recognition. Investments could vary from Rs. 5 lakhs to Rs. 2 Crores, depending on the Brand. Some Retailers charge a one-time Franchise Fee and others charge monthly/annual commission on Sales in addition.

Nilgiris - Franchising Opportunity

Advantages of Franchising

Scalability of Business

The Franchisor would be able to scale up instantly by going through the Franchise model. The prospective Franchisees could be spread across the country and hence the business could be expanded quite fast. This is one of the most important reasons that Retailers choose to go the Franchising way.

Immediate availability of capital

The Franchisee brings in the additional capital that is required to invest and operate the business which is a very important factor for the Franchisor.

Day to-day Operations

Usually, the set-up costs, which are substantial are borne by the Franchisee. He also bears running costs such as daily operational expenses (manpower, electricity, housekeeping, interest on capital, depreciation, etc.)

Drawbacks of Franchising

Customer Touch-points

One of the biggest drawbacks in Franchising is that the Retailer usually loses touch with the customers. The front-end is managed by the Franchisee and hence the Brand doesn’t have much role to play in the Customer Engagement as such.

Loss of Operational Control

The daily operations are managed by the Franchisee. Although there are parameters which need to be followed, there are occasions when the Franchisee takes things under his control which could be potential threats in terms of running the business.

Loss of Focus

Once a Franchisee believes in the model, he / she expand their business across various brands and categories. Therefore, the required focus on the business may dwindle over a period of time. It is quite unlikely that the Franchisee would spend the same amount of time and effort on businesses that don’t yield similar returns.

FDI in Retail has already opened up for Single Brand Retail and the country is eagerly watching the Government’s steps towards their decision on allowing FDI in Multi-Brand Retailing. This is indeed a good time for individuals and entrepreneurs in the making to take their first steps towards Organized Retail through a Franchise Opportunity.

Best of Luck.

24 May, 2012

The Dangerous Minimum Guarantee Model in Retail Expansion

Aggressive store expansion means two things – heavy capital expenditure and lots of people to manage the stores. Every brand worth its salt wants to boast an extensive Retail store network across the length and breadth of the country no matter what the store level EBITDA is. While there are various ways to expand its network, some of the commonly used ones by Retailers are Franchising (more on that in my next column) and CoCo – Company Owned Company Operated model. While Franchising could mean faster expansion, there are chances that the Retailer may lose control on the quality of customer experience among other things. The CoCo model is very expensive to scale-up unless backed by a solid VC / PE Firm. One of the other means to raise funds for expansion is through the Capital Market – recently Specialty Restaurants that runs the Mainland China, Oh! Calcutta, Sigree and other restaurants debuted their IPO, the first of its kind in the F&B Industry in India (while Jubilant Foods which runs Dominos Pizza in India is also listed, it is not in the Restaurant business but into Casual Dining). Retailers like Café Coffee Day, Dominos, Foodworld, Spencers, Zara, Tommy Hilfiger and many others have invested heavily on their own in terms of store expansion across the country, while others like McDonalds, Pizza Hut, Madura Garments, Reebok, Adidas, Benetton, Nilgiris, etc. have taken the Franchisee model.

Reebok Store 1

There is another alternate model – One of the easiest ways that a few Retail Brands have taken to, which is known as the “Minimum Guarantee” model where in a Second Party is appointed to manage the store(s) on behalf of the company while the Retailer itself invests on the business. Let me explain this in detail. Assume that the store fit-out costs for a 1,000 sft store is Rs. 40 Lakhs plus stocks to the tune of Rs. 50 Lakhs, then the Retailer invests Rs. 90 Lakhs to set up the store and also bears the Security Deposit to the landlord (6 – 10 months’ monthly rent).  Once the project work is completed, the store is handed over to a second party, also known as a Managing Partner or a Managing Franchisee who is responsible for the day-today upkeep of the store. All direct and operating costs such as manpower, electricity, rent and incidental costs are taken up by the Retailer and the Partner is also paid a lump-sum ranging from a few thousands to a couple of lakhs – just to operate the store everyday. The logic is, if there were to be an Area Manager to micro-manage the store (and a cluster of them in each city / region), then the costs would be substantially high. And hence the Managing Franchisee model. The partner also has sales based incentives, that is if the store achieves a set target, then he receives a further commission, usually as a percentage to sales. In many cases, the Partner leases his own property to the Retailer, which means the Rental income comes back to him! In a few cases, either the same partner operates through kith and kin or through friends and relatives who become partners! And then, there are incentives for introducing new partners and locations in other cities. This is indeed a vicious cycle.

In the name of faster expansion and quick growth, many Retail Brands have resorted to this practice. While there is nothing wrong in this approach, the Managing Partner usually gets the cake and eats it too. Without any investment, he has a full time job, a respectable retail profession and a handsome income too. While it is not clear whether the practice has been globally prevalent and if yes, from when – it is quite popular in the Indian Retail scenario over the past decade. While Retailers like Madura Garments have stuck to the tested Franchise model of “Buy and Sell” merchandise (that is the Franchise has to purchase all the merchandise with a small percentage of returns back to the company), others like Reebok, according to press and media releases in the recent past have opted the Management Partner model.

DSC00153 (2)

There is no correct or wrong way to expansion. As long as the means are ethical and law-abiding, there is no problem. But concerns arise when there is maniacal expansion with sometime, ulterior motives of helping / supporting some known people to become Management Partners. At the end of it, the Customer decides on the success or otherwise of the brand. And that’s what matters.

29 March, 2012

Instead, they drive away footfalls!

Shoes on Sale 2

I was recently in Chennai and happened to see an advertisement in the newspaper from a leading footwear Retailer announcing End of Season Sale and massive discounts. Someone within my friends circle had even mentioned about it on Facebook. Excited I was like many others, landed up at the store on a Saturday evening. To my utter disappointment, the store was in complete disarray. The owner was standing in one corner with a long face and the sole salesman was running pillar to post, literally. There were atleast 20 customers within the store – a few on the lower level and mostly women on the upper floor. I will not mention the name of the Retailer who is well renowned in Chennai and I only assume that this incident was an aberration than norm. Hope it gets better sooner than later. How I wish...

Shoes on Sale 5

Some key learning that I took out of this episode;

  • End of Season Sale is not just a season to liquidate stocks. It is also an opportunity to attract newer customers from across the town
  • To mention “Upto 40% Off” in the advertisement and finally offering unknown brands at such a discount or lower is a wasted effort
  • Women are slow shoppers – they spend on an average 2-3 times the amount of time than men while shopping and also try 3-4 times more footwear than men
  • It didn’t make any sense to stock women’s products on the upper level – while most customers did walk up, it would have been a better idea to stock them downstairs and allow them more space to move around
  • There were just two boys running around helping customers in each floor. Knowing fully well the additional footfalls that are expected due to the newspaper advertisement, it would have made sense that there were more helpers in the store to assist customers
  • There is a tendency to believe that discount-seekers are of a lower profile than normal customers and hence it is ok to serve them less! Bad Idea! There were more cars parked outside the store than two-wheelers. And most of them who paid for the product used a debit or credit card
  • Worst of all is to stock the products badly – in carton boxes and allowing customers to search for their sizes

Shoes on Sale 3

At the end of it, I found nothing interesting that were on Sale; instead I walked out of the store rather disappointed. disgusted more on the owners’ interest levels and attitude than the fact that not much was available to buy! Will I visit the shop again? Yes. I guess it was more of a one-off case and would allow the Retailer to correct themselves!

12 January, 2012

100% FDI in Single Brand Retail. So?!?

DSC00049

The Government of India officially announced allowing 100% FDI in Single Brand Retail on 9 Jan 2012. “We have now allowed foreign investment up to 100 percent with the stipulation that in respect of proposals involving FDI beyond 51 percent, there will be mandatory sourcing of atleast 30 percent of the total value of the products sold…from Indian small industries/village and cottage industries and craftsmen,” Commerce and Industry minister of India, Mr. Anand Sharma said in a statement.

(Suggested Reading: FDI in Retail – the saga continues)

The Indian Industry seems to be equally upbeat;

In an interview to ET, Future Group's CEO Mr. Kishore Biyani said, "I believe both single and multi brand retail together can bring in an investment of $10 billion in the front-end alone. I think this is a significant investment in the next four to five years, and the journey has just begun." The announcement of single brand retail has come sooner than we had expected, though. It is a good move, and a precursor to the bigger one now - the multi-brand retail announcement, added Biyani.

“We hope the initiative is a precursor to further liberalisation in the sector in the days to come,” Rajan Bharti Mittal, managing director at Bharti Enterprises, Wal-Mart’s India partner for wholesale stores, told Bloomberg.

"The notification was expected because single-brand is less controversial, as the brand will not compete with a local retailer," said Bijou Kurien, who heads the lifestyle division of Reliance Retail, which runs department stores, hyper-markets and supermarkets.

“The opening of India’s single-brand retail sector sends a crystal clear signal that India is open for business at a time when economic opportunity is certainly welcome amidst global uncertainty,” said Ron Somers, president of US-India Business Council (USIBC).

We believe that further opening up of the single brand retail clearly shows the government`s positive intent towards bringing about reforms. We see this as an important step towards further reforms in the multi-brand sector as well said broking house ICICIDirect

“Globally, single-brand retail follows a business model of 100 percent ownership and global majors have been reluctant to establish their presence in a restrictive policy environment,” the department of industrial policy and promotion (DIPP), said in a statement.

SBUX

(Suggested Reading: Luxury Retailing in India)

100 percent ownership would be permitted in single brand product retail trading under the government approval route, subject to the following conditions:

  • Products to be sold should be of a single brand only
  • Products should be sold under the same brand internationally (i.e. products should be sold under the same brand in one or more countries other than in India)
  • Single brand product-retail trading would cover only products which are branded during manufacturing
  • The foreign investor should be the owner of the brand
  • In respect of proposals involving FDI beyond 51 percent, mandatory sourcing of at least 30 percent of the value of products sold would have to be done from Indian “small industries/village and cottage industries, artisans and craftsmen”
  • Application should be submitted seeking permission from the Indian government for FDI in retail trade of single brand products to the Secretariat for Industrial Assistance in the Department of Industrial Policy and Promotion
  • The application will specifically indicate the product/product categories which are proposed to be sold under a single brand
  • Any addition to the product/product categories to be sold under single brand would require fresh approval from the government
  • Applications would be processed in the Department of Industrial Policy and Promotion to determine whether the products proposed to be sold satisfy the notified guidelines, before being considered by the FIPB for government approval

(Suggested Reading: “UnHate” by Benetton)

Mono Brands such as Tommy Hilfiger, Pepe, Mont Blanc, Rolex, Pizza Hut, Costa Coffee and many others through a JV with Indian partners have been operating in India over the past years. Some like Benetton and Nike have been operating on their own, using manufacturing/marketing as their modus operandi through a predominantly franchisee model. Over the past few years, we have seen even luxury brands like Louis Vuitton, Diesel, Tumi, Armani and Versace enter the Indian Retail market through respectable JVs with the likes of Reliance Retail, DLF Brands, etc. and all of them seem to be doing well in their own way. Indian business houses such as the Tatas, Jubilant Organosys and Dabur have been happy to partner with international brands such as Zara, Dominos and Subway (respectively) and operate large franchise operations. But the fuss over 100% FDI in single brand retail seems surprising, if not confusing. Louis Vuitton, for example expects a sale of over USD 100 million from a 550 sqm outle from its only airport store in the world at Incheon International Airport, Korea. It would take LV a few years to achieve a similar number in the Indian market. In such a scenario, I wonder why would international brands invest and fund their expansion and growth in India all by their own, while there are so many Indian business houses/partners who wish to do so.

Video Courtesy: The Moodie Report

Indian and International Retailers are eagerly looking forward to the approval of 100% FDI in Multi-Brand Retail, which is not expected until the elections are over in key states such as Uttar Pradesh. Major action is expected only when the big boys of multi-brand retailing are allowed to enter India and operate directly and service end-users/customers. And that doesn’t seem to happen soon, certainly not in 2012. Hopefully, the next year – if the world doesn’t end. That is.

(Suggested Reading: Borders – a book in itself)

06 October, 2011

Malls are also parking lots!

I recently came across an article which claims that Bangalore is the most painful place when it comes to commuting and parking of vehicles! My suggestion – is to build more Malls.

IBM Global Commuter Pain survey

A new IBM survey of the daily commute in a cross-section of some of the most economically important international cities reveals a startling dichotomy: while the commute has become a lot more bearable over the past year, drivers’ complaints are going through the roof. The annual global Commuter Pain Survey, which IBM released recently, reveals that in a number of cities more people are taking public transportation rather than driving, when compared with last year’s survey. In many cities, there were big jumps in the percentage of respondents who said that roadway traffic has improved either “somewhat” or “substantially” in the past three years.

IBM Commuter Pain Index

To better understand consumer attitudes around traffic congestion as the issue continues to grow around the world, IBM conducted the 2011 Commuter Pain survey. The IBM Commuter Pain Index, illustrated in this speedometer graphic, ranks the emotional and economic toll of commuting in 20 international cities. From right to left, cities are plotted from least painful starting with Montreal and gradually increase to the most painful city, Mexico City. But that’s only part of the story. In many cities, the survey recorded significant increases, when compared with last year, in the number of respondents who said that roadway traffic has increased their levels of personal stress and anger and negatively affected their performance at work or school.  “Commuting doesn’t occur in a vacuum,” said Naveen Lamba, IBM’s global intelligent transportation expert. “A person’s emotional response to the daily commute is colored by many factors – pertaining both to traffic congestion as well as to other, unrelated, issues. This year’s Global Commuter Pain survey indicates that drivers in cities around the world are much more unsettled and anxious compared with 2010.” 

According a report recently in Times of India, around 1,300 vehicles are fined everyday for illegal parking. And this is just the official number. I would assume for every ticket that is issued, atleast 5 are not! So, we can guess the number of illegal / wrong parking. Whose fault is it – to provide adequate parking spaces in a city like Bangalore, to ensure ample public transport is provided? And as users, as commuters, aren’t we as public responsible too? Well, there are no straight answers. In a growing urban metropolitan city like Bangalore, this is bound to happen. With the price of automobiles going down each year (and despite the rising petrol costs), more people are opting for personal transportation options, both for official as well as personal usage. And I wonder what relief a 3km Metro rail will bring in the short-term and even if a fifth of the city is connected, am not sure how useful it is going to be!

DSC00021

However, there is a simple solution through public-private partnership that can significantly reduce the pain-points – build more public car parking spaces which would also double up as Retail Destinations! Call them Malls, Shopping Centres, whatever. And we already have a great example in Garuda Mall. The land belongs to the city Corporation, the structure built by a private party which was expected to house over 2000 cars and two-wheelers. And also have some shops which would provide the revenues to maintain and manage the parking lot. And we know the result – a swanky mall with 100s of shops and restaurants including some big names such as Shoppers Stop, Westside, Louis Philippe, Benetton, etc. a full-blown food court and a six screen INOX Multiplex! Avid shoppers wait patiently outside just to just enter the mall over the weekends! Movie-goers reach the Mall 20-30 minutes before the cinema commences to ensure they watch the film from the beginning. A similar example is Mantri Mall at Malleswaram in South Bangalore

Bangalore, overall has only 10 notable Malls for a city that has a population of over 8 million people (as per the recent census). By any means, this is just not enough. World cities like New York, London, Paris, Tokyo, and even Shanghai and Beijing have a reasonably more number of Malls. And many other Retail destinations such as Hypermarkets, Neighbourhood Malls, etc. These locations, typically act as public parking spots for a particular locality during the day (since serious shoppers typically prefer late evenings or weekends). In a way, higher retail proliferation also means additional space on offer, which makes the market more competitive, such that builders and developers or Mall Management companies do not charge the Retailers exorbitantly, which in turn affects the number of stores a Retailer or a Brand operates in that market. This can be seen vividly in markets like China close by and in the US, needless to say. For example, every locality would have a Wal-Mart with hundreds of car parking lots – and it is not just for shoppers, but also for those who have work in the vicinity.  The expectation is that those who didn’t have any work in the mall may also just pop-in. And it happens many times. 

 DSC00045

Infrastructure is one of the biggest challenges India is facing, and Retail Infrastructure is no better. Coupled to that, we as a society are averse to walking – which is very common to see in Japan, Singapore, Hong Kong, China, Europe and other countries. They say, that cafes and QSRs do not have parking lots (worldwide) because customers prefer to walk a bit. But not in India. Even a humble “darshini” restaurant which serves local fare would see a dozen two-wheelers parked outside its shop, mostly in a “No-Parking” area. Most of us, in the name of saving time prefer not to walk even a bit. And people also blame it on pollution, lack of pavements or walking tracks and so on.

DSC00052

Bangalore will see two new retail developments open its doors within the next six months. Each of them have a million square feet of Retail, F&B and Entertainment. And a couple of smaller developments are in various stages too. Together, at the moment around 5,000 cars and two-wheelers can be parked in our Malls but this expected to simply double with the new developments coming in. I assure, the next time I have to visit a place I will atleast attempt to look for a nearby mall. What about you?

22 November, 2010

Walk like an “Emperor”

“Show me your shoes and I will tell you how wealthy you are”, goes a saying. Indeed, it’s so true! This is one accessory that most Men care the least about. And the issue is specific to men. Women, as anybody would guess are so fond of their footwear and it’s also a coveted purchase for them. Men always had few choices – in India, in the early 80’s, it was Bata for “office wear”, and Power for “other uses”! The early 90s witnessed the entry of International Brands, initially through the grey market and then through Franchises followed by company owned stores. Today, the footwear market in India according to an IBEF Report is estimated to be USD 2.8 Billion! Since the dawn of the 21st century, the footwear market in India has taken a dramatic shape. There is fierce competition among the players and interestingly, prices have been steadily coming down, inflation adjusted. The Indian footwear Industry is expected to grow at 20% CAGR over the next few years. At present, the footwear market in India is dominated by Men’s wear that contributes almost 60%. Since the organized footwear industry in India has remained focussed on men’s shoes, the opportunity for retailing women’s footwear is enormous. At present, most women buy their footwear from nearby stores or mass markets with very few organized players such as Soles focussing on this category.

 
The Men’s footwear market can broadly be classified as formal wear (office wear), casual wear (evenings, outings, etc) and sportswear. While this definition is more to classify the categories, it isn’t followed so strictly by one and all, except for the urban male and a few of his counterparts in the smaller cities. The most popular, rather most advertised include “sportswear” and the target audience is clearly the youth and young adults. After all, it’s best to “catch them young, watch them grow”. And thereby Sachin, Dravid, Dhoni and various sportspersons, mostly cricketers are the brand ambassadors. Reebok, which has close to 1,000 stores (most of which are franchised) has a market share of over 50% in this segment – a rare feature when compared globally. The brand received phenomenal upcountry publicity after becoming the official partner for Kolkata Knight Riders in 2008, the IPL team owned by Shah Rukh Khan. One of the biggest strengths of Reebok is its design capability – apparently, the brand launches about 20 styles every quarter and prices start from Rs. 1,000. Adidas has remained focussed though – style and substance put together. While utility takes the cake, it is also known for its fashionable designs. Nike, the smallest player in the market yet among the big three predominantly focuses on various sports. Puma and brand digressions such as Levis & Provogue concentrate on the fashion segment. In the formalwear segment, Bata and its brands including Hush Puppies have remained the most popular across the country. Early 2000s witnessed brands such as Lee Cooper Gaitonde and Woodlands reach the masses with their popular designs and low-pricing. Florsheim, a late entrant took the market by storm due to various innovations including the stress free footwear range that starts from Rs. 5,000 onwards! The last among the batch seems to be Samsonite, the brand known for its sturdy luggages and suit cases which has been spreading its presence across the country. Footwear chains such as Metro & Mochi and Department stores such as Shoppers Stop & Lifestyle have their own private labels and are popular in the mid-segment which looks forward to latest styling at reasonable pricing. International Premium Brands such as Tods, Jimmy Choo and others have just entered the Indian market and have limited presence in major cities like Delhi, Mumbai and Bangalore.


So, what’s in it for consumers? To begin with, a wide variety and choice of pricing! There are over 20 Domestic and International Brands operating in India, right from the neighbourhood to the nearby malls or speciality shopping areas. From as low as Rs. 1,000 upto Rs. 6,000, one can find reasonable footwear to suit the various occasions and activities that one performs during the day. The same set of footwear may also be available at a 30% discount at Factory Outlets such as Brand Factory or MegaMart, although it would be 18-24 months into the market with its design and styling. On the whole, for a little extra care, one can walk literally like an emperor! Keep Walking...

A Firefly finally takes off

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