Bata aims 20% sales from online in next two-three years

The company is expanding its presence in both channels – physical stores and online – and expects e-commerce to contribute 20% of its total sales in the next two to three years

With inflation cooling off, leading shoemaker Bata is bolstering the premium price points with fresh portfolios while it increases spending on advertising and promotions to connect with young digital-savvy consumers, according to company Managing Director and CEO Gunjan Shah.

The company, as part of its sales strategy, is expanding its presence in both channels – physical stores and online – and expects e-commerce to contribute 20% of its total sales in the next two to three years, he said.

Bata is also pushing for offline sales and expects strong growth to come from its expansion under the franchise system, where it plans to add another 125 stores in FY24 and increase its presence at multi-brand outlet (MBO) channels.

Though with the opening of offices and schools, sales of casual wear products have increased, Shah said the trend of casualization would continue in the long term and Bata is pursuing it by extending its mid-premium brands Hush Puppies and Red Label in the segment.

As part of its strategy, Bata is investing in front-end operations, stores to back-end infra, technology, design, R&D etc. Besides, Bata is bringing new collections at a rapid pace to compete with its rivals.

“This season we will bring our ever-highest newer range to consumers, taking to almost 35 to 40% of refresh. This used to be below 25% two years before,” Shah told PTI.

When asked if Bata had extended the benefits to consumers, as inflation has moderated, Shah said, there were price points “we had vacated in the past because of cost pressures but now with the easing of inflation, we are entering some of those with fresher offerings as they had worked well for us”.

At the same time, there are consumers who are looking at superior product offerings which the company continues to build, he said.

Besides, it has staved off from any further price hikes for the last 8-9 months.

“That has served us well in several areas and categories. Whatever growth which we have seen in Q1 is largely a volume-driven growth,” he said adding that should also eventually stabilise and provide value to consumers as time goes by.

Bata would continue its thrust on online sales and e-commerce, a segment in which it was a late entrant. As part of its expansion plans, it is stressing both brick & mortar channels and online channels.

“We have the fastest growth from our e-commerce channels from last three years and we see no difference this year and it will keep growing,” said Shah adding “right now it is 10-12% of our turnover and in the next 2-3 years, we would like to see that to grow to 18 to 20 per cent.”

However, he also added Bata would continue its investment in stores and offline expansion.

“While we will expand our company-owned stores, we will have a significant part of expansion coming through two large revenue channels – franchise business, which has been expanding and adding stores at a rapid pace over the last six quarters and that continues and through multi-brand outlet distribution channels,” he said.