Red Chief has 135 outlets across India majorly targeting tier 3 and 4 cities and having 60 % presence majorly in north India and 20 % in metros.
Leayan Global Pvt Ltd’s, Red Chief is not just a shoe brand now. It has grown massively and ventured into accessories and apparel sector too. Red Chief has 135 outlets across India majorly targeting tier 3 and 4 cities and having 60 % presence majorly in north India and 20 % in metros. We spoke to Raman Kumar, Vice President- Retail, Red Chief about his next moves for the brand and what potential lies for international expansion for India shoe brands.
How do you see franchising as a model for shoe brands to expand in India?
Franchise for shoe brands in India has a huge opportunity to reach tier 3 and 4 where brand’s penetration is high as compared to tier 1 and 2. 60% of India’s population lies in tier 3 and tier 4 + areas; which is close to 90 % of population of urban areas. Franchising is the only way to reach out to this population through local support of operations, language and making key presence. Apart from this, brands can control their expansion expenditure through partnering and making win-win business situations through investment and profit sharing .Through this model (franchise) brands can expand faster than own coco model and still have lots of scope in Indian market to organise their brick&mortar in footwear retail.
Biggest challenges and hurdles for Indian shoe leather brands? How are you overcoming it?
There are certain challenges for Indian shoes and leather brands like acceptance as per the current fashion and market trends, the seasonal challenges at rainy season. We are working on this to get the availability as per the market and customers likes. On the other hand, these challenges always come with opportunities. In Indian market we have a lot of scope to work with the imagery of a leather brand.
Leather being a niche segment in franchising, what potential lies for international expansion?
In India, footwear market is growing with a pace of 12-15% which is close to international markets; 60 % of countries are having more than 20 % share, whereas India is having 11-12 % market share in footwear. So, this data itself shows that Indian footwear also has a good opportunity in international market for footwear as well as leather footwear (data may vary)
How will the department of industrial policy and promotion facilitate expansion of leather brands?
DIIP is putting efforts in areas like 100 % FDI on single brand. Currently there are new reforms and circulars such as the ease of doing business. This helps entrepreneurs to understand how to do business easily in India. Policy for Skill India and Make in India which helps Indians to learn as well as do business; and last but not the least the policy of GST will impact more and more because leather is one of those categories that have multiple tax slabs across the country.
Do you think India needs to change its perception towards India made shoes and products? We see a lot of youth going only for Reebok, Nike Adidas and the likes. What strategy you had rolled out to win their hearts?
No! It is just a perception in India, for the said brands, because there is only a 15-20% sharing in footwear for these companies, and Indians are mainly consuming a good percentage of Indian footwear brands. Instead of going for price sensitive markets, people are paying Indian brands for their good quality and we are already a good example for the same. We mainly focus on developing merchandise for youth. Recently we launched ‘ROCKWOLF’ shoes that are mainly designed sturdy and comfortable to suit all outdoor needs of the youth. We also reach out and connect to our youth on digital and social media platforms.