Slide 1: FOOTWEAR Agenda : Agenda Global scenario
Indian market scenario
Segmentation and consumer behaviour
Market trends Global Scenario : Global Scenario Global Scenario : Global Scenario The global footwear market grew by 3.8% in 2005 to reach a value of $159.6 billion.
Expected value by the end of 2010 is $194.3 billion.
The most profitable regional footwear market is America.
The global footwear market grew by 5.4% in 2005 to reach a volume of 10 billion pairs. Competitive Landscape : Competitive Landscape Leading companies include Nike, Adidas‑Salomon, Reebok and Asics
Extensive revenues within the Asia Pacific region
High research and development
Overcome cost increases by decreasing prices of products from suppliers
Maintain margins through developing volume sales
Consolidation along the supply chain adding to the effect of maturity Indian Market Scenario : Indian Market Scenario Indian Footwear Market : Indian Footwear Market Liberalization of Indian economy led to increase in the buying capacity of the country’s middle class. Market Characteristics : Market Characteristics Over INR 10,000 crore in value terms
Organized retail dominates sales
Market size approximately 10 crore pairs p.a.
India is the second largest footwear manufacturer in the world
Nearly 58% of the industry concentrated in cottage industry sectors Segmentation and Consumer Behaviour : Segmentation and Consumer Behaviour Consumers InsightsFactors which can help in enhancing the sales : Consumers InsightsFactors which can help in enhancing the sales Price
Buying experience Segmentation : Segmentation According to price
Super premium segment
According to usage
Casual Consumer Behaviour : Consumer Behaviour If we segment the market according to the price
Super premium segment
Money is secondary
Demands more variety
Examples – Gucci, Red Tape, etc.
Have an upper limit to the money
Try to get lowest price possible for high quality brand
Examples – Bata, Reebok, Nike, etc. Consumer Behaviour : Consumer Behaviour If we segment the market according to the price
Do not care much about brands
More concerned about looks and comfort
Price one of the main factors.
Examples: Bata, Liberty, etc.
Do not care about brands at all
Size of this particular segment very high in India
Much more concerned about the functionality and durability
Try to get lowest price possible
Examples: Khadim, Shree leathers, etc. Consumer BehaviourIf we segment the market according to the usage : Consumer BehaviourIf we segment the market according to the usage Sports wear
Money is secondary
Examples: Addidas, Reebok, Nike, etc.
Main concentration on the looks
Comfort is considered but is a secondary thing
Demand of high variety
Examples: Gucci, etc. Consumer Behaviour : Consumer Behaviour Professional wear
Importance to durability and comfort
Examples – Bata, Liberty, etc.
Comfort is of utmost importance
Longevity is one of the important factors
Value for money
Lot of untapped market
Examples: Bata, Liberty, etc. If we segment the market according to the usage Major Brands : Major Brands Bata India Ltd : Bata India Ltd Incorporated in 1931
Subsidiary of the Bata Shoe Organisation
India’s largest footwear company, selling 60 million pairs of shoes annually
Dogged by labour problems, overstaffing and subsequent losses
Though recognized as a household name in India, Bata suffered greatly after the liberalization.
Repositioned itself as a market-driven, fashion-conscious lifestyle brand with an emphasis on service and production. Bata India Ltd : Bata India Ltd Introduced Flagship, City, Family and Bazaar stores that cater to different segments of the market
Over 1,100 retail stores
The retail outlets also sell accessories, like shoes laces, socks, and shoe polish.
Capitalise on its vast retail network
Trying to generate volume business in un-represented and under-represented footwear markets
Consistently trying to leverage on its established brands, while creating a niche for its new brands. Liberty Shoes Ltd. : Liberty Shoes Ltd. Existed since the 1950s and until 1983, Liberty was entirely export-oriented
Liberty is the second largest shoe company in the country
Re-positioned as a mid-price brand in 2004
Contemporary brand in Indian footwear via new advertising
350 exclusive showrooms
Children’s shoes bring in the largest volumes for Liberty Woodland : Woodland Launched in 1992
Carved a niche as a “Rugged high‑quality premium casual shoe”
Presented itself as an outdoor/trekking shoe
Called as SUV of Indian shoes for its ruggedness and all-terrain use
Ads showing people wearing Woodland shoes for various outdoor activities
Became status symbol during the 1990s due to excellence in quality and styling
Pioneered suede and nubuck leather shoes in India Reebok India : Reebok India Entered India in 1995
Sports and fitness brand targeted young adult mainly
45% of its turnover comes from footwear
Accounts for 47% of the premium sports shoe market in India
Initially targeted at the male consumer
Large market for female consumer who lives an active lifestyle
Reebok modified the format of all its stores to introduce a women's collection
In 2004, opened women’s-only stores
Reebok "Gang up for rewards" promotion Reebok India : Reebok India Cricketers as its brand ambassadors
Cricketers as fitness icons since India does not have a fitness culture
Relies heavily on sports promotions as a marketing strategy
Developed a fitness culture
“Wear the Vector. Outperform”
The integrated marketing campaign Market Trends : Market Trends Unbranded vs Branded : Unbranded vs Branded India still a huge market for unbranded footwear
Difficult for brands to enter entry level segment
Difficult to raise prices
Branded still an urban phenomena
Looks score above brand names in middle and lower segment
High-quality shoes - big market for export Retail Growth : Retail Growth Foreign brands launched new designs in 2003
Foreign brands focus on lifestyle aspect
Domestic players began advertising
Improvement in operations and retail strategies
This excitement led to urban middle – class moving to branded retail formats Casual, Younger Styles : Casual, Younger Styles Increased media exposure and global travel
Footwear a lifestyle accessory, a means of differentiation
Men also care more about apparel and accessory
Style also a factor rather than just comfort Women’s and Kids’ Segment : Women’s and Kids’ Segment Opportunity for retail chains in these categories
Ladies constitute 40% of market though 80-90% of these sales are through unorganized sector
Indian women changing from product conscious to brand conscious
Kids’ segment also expected to grow due to young population
Indulgent parents also a factor
Leased space and franchizing popular modes Sportswear : Sportswear Presence of big players
Playful promotion campaigns, world class merchandising, stylish décor in stores
Promote clothing alongwith sportswear
Banking on middle class and improving lifestyle attitudes
Indian players also becoming more contemporary Value Retailing : Value Retailing Factory discount stores – huge in number
Category killers arriving on the scene
Shopping malls will drive growth in this segment Competition from Non-Specialist Retailers : Competition from Non-Specialist Retailers Face challenge from apparel retailers diversifying into footwear
Hyper marts and retailers - another challenger
Will have to focus on constant improvement, need to differentiate Innovative Locations and Distribution Strategies : Innovative Locations and Distribution Strategies Future possibilities could be health spas, health clubs, airports
Exclusive and multi-brand stores both present
Multi-brand – possible entry point for foreign players
Cross-promotions benefit all Market Value Forecast : Market Value Forecast In 2010, the global footwear market is forecast to have a value of $194.3 billion, an increase of 21.8% since 2005.
The compound annual growth rate of the market in the period 2005-2010 is predicted to be 4%. Market Volume Forecast : Market Volume Forecast In 2010, the global footwear market is forecast to have a volume of 13.2 billion pairs, an increase of 31.5% since 2005.
The compound annual growth rate of the market volume in the period 2005-2010 is predicted to be 5.6%. Slide 36: Questions?