The footwear industry in India has grown to become one of the most profitable demands-based business models in the country.
The magnification of the Indian fashion and lifestyle market has given a push to the footwear industry as well. From a fundamental need-based industry, it has become an evolving fashion and style category. The footwear market in India, like its international counterparts, has always been broadly categorized into three segments - men’s, women’s and children’s. The men’s market is growing at a CAGR of 10%. At present, it contributes around 60% of sales in the footwear segment as against women’s portion of 30%. The women’s segment, however, is growing at a much faster rate at a CAGR of 20%. India is all set to become the second largest market for footwear consumption in the coming years.
FACTORS LEADING TO GROWTH
There are numerous factors that have led to the significant growth of the footwear segment such as increasing demand for trendy and comfortable footwear with the emergence of various global and regional brands across segments. Due to advancement in the footwear manufacturing process, technological innovations, and development of new material for trendy and comfortable footwear are being consistently manufactured by leading market players.
Additionally, over the past decade, India has been witnessing a rising trend of consumer orientation towards health and wellness. Rapid urbanisation is also responsible for a hectic lifestyle, which has led to a rise in the incidence of lifestyle diseases. Consumers have become more health conscious and are imbibing various physical activities as part of their daily lives. Indulgence in sporting activities has also increased. This has led to an increase in spending on quality and comfortable sportswear by the adult population in metro and larger cities in India. The coming up of international schools with state-of-the-art sports infrastructure has led to greater consumption of sportswear by the school-going population.
START YOUR OWN FOOTWEAR OUTLET
The minimum area required for a footwear franchise outlet will be 700-1000 sq ft. with an initial investment of 30-50 lakhs. The investment of a franchise for a brand’s stock will be 25 lakhs. The dead stock by the end of the season will be absorbed back by the company and the franchisee will be refunded for its amount. The bulk of 10-15% of your investment would go into the rent of your store, depending on tier and populous of the city/area. The average amount of interior expenditure tends to range from 15-20 lakhs, including the cost of IT equipment, furniture, civil work, AC, staff training, advertising and miscellaneous expenses. A store of a 1000 sq ft would require the manpower of 5 people, whose collective salaries would comprise 5-7% of your initial investment. “Liberty has a conglomerated business model of company-owned company-operated showrooms and franchisee-owned franchisee-operated showrooms, where both the business models have contributed significantly to the brand’s success. The franchisee-led route led to the increased brand recognition and increasing the reach of the brand pan India, catering to the needs of exponentially increasing footwear segment.” shares Mr Anupam Bansal MD Retail Liberty Shoes.
Keeping these expenses in mind, an average footwear store can break even in 6-8 months, in a high populous area. Within a year, the store can consistently generate revenue of 8-12 lakhs. In addition to this, the costs of advertising and logistics are solely overtaken by the head brand, along with the assistance of the franchise in terms of training employees and talent acquisition.