Hooked to the latest fashion trends and styles, Indians, like their global peers, are increasingly spending on the latest footwear. Putting their best foot forward, brands from across the world, including domestic players, are vying to gain a foothold in
TODAY, people like to look their best from head to toe. Gone are the days when most people would buy one or two pairs of shoes, only out of necessity. Having become more of an aspirational and lifestyle product, people buy shoes matching their outfits, occasion and even attitude. What's more, trendy, comfy and quality footwear are must haves for every fashionista too. This trend has also contributed to the manifold growth of footwear retail in India. Kapil Mahtani, CEO of Tresmode, a premium footwear brand synonymous with uber chic footwear that launched into the Indian market in 2007 with the first flagship in Mumbai, believes that the country's footwear market is all set to expand exponentially. He says: “Indian youths are aware of details in dressing today. Now, shoes are treated as an important part of the wardrobe and are worn in multiple colours and styles depending on the occasion. This has led the market to grow manifolds within the same consumers, besides expanding the consumer base at a very fast pace.”
Current market scenario
An Assocham report says that the current Indian footwear industry is worth Rs 22,000 crore. Growing at a CAGR of 15 per cent, it is pegged at Rs 38,700 crore by 2015. The burgeoning middle class and youths, who readily loosen up their purse strings for latest products, are the key catapults of Indian footwear sector. The footwear market can be broadly segmented into formals and semi-formals, casuals, sportswear, and fashion footwear. While the men's segment takes over half of the total market, women's and kids' segment make up the rest. Interestingly, at present, the non-branded or unorganised footwear manufacturers and retailers dominate the market and enjoy almost 70 per cent share. However, the upswing demand for branded merchandise provides a massive scope for organised players to strengthen their foothold in country's footwear retail trade.
Brands stepping ahead via franchising
The franchise expansion model has proved to be an excellent growth vehicle for many home-bred and international footwear brands. The steep rise in realty prices and rentals, over the last few years, has also led many footwear companies to resort to the franchise route, as it was no more feasible for them to expand through own resources. Liberty, Puma, Nike, Action, Touristor, Red Tape, Franco leone, Catwalk, Spyker, Big Shoe Bazaar, Lotto have successfully built up their franchise presence. In recent times, Heatwave Shoes and Tresmode have also joined the bandwagon. Even established footwear major Bata, which until now had presence in India only through company-owned outlets, is also en route to franchising. It will be opening a number of its global concept stores through a mix of ownership and franchise models. Bharat Shoe Co, which has been in footwear retail trade since 1950's, launched Touristor Shoes in 2004. The brand currently has presence in 20 cities via a mix of 30 company-owned and franchise outlets. Ved Vyas Chhabra, MD, Touristor Shoes Pvt Ltd informs: “We are now fully equipped to open more franchisee stores. We are experienced enough to have smooth franchise operations with the help of professionally qualified staff and technically advanced IT software and systems.” Alberto Toressi, a men's footwear brand by Virola Shoes Pvt Ltd, is also mulling franchising options in the near future. . The company's Director, Ishaan Sachdeva shares: “Alberto Torresi is poised for franchise expansion by the mid of FY 2013-14. The ever increasing awareness and availability of our brand across the country, soon to be introduced youth centric, smart casual brand 'AT Studio' in key markets and a bit later slated launch of our promising ladies footwear brand 'AT Senora' as well as Alberto Torresi Men's accessories shall equip us with a highly captive multi-brand, multi-category range of offerings for our burgeoning clientele. We shall co-seek this very platform to enhance our brand(s) outreach and brand building exercise through an envisaged franchise model.”
In the process of spreading their footprints across wider geographies, the franchisors are offering lucrative partnerships to aspiring footwear retailers.
Grabbing opportunity to walk along
A franchisee can walk on the rough roads of entrepreneurship relatively easily by associating with an established brand name.
Gurgaon-based Liberty Shoes Ltd, one of the world's top five manufacturers of leather footwear, in addition to 95 company-owned stores, operates more than 300 exclusive franchisee showrooms in India and the Middle East. An interested franchisee needs a capital of Rs 20-50 lakh and an area of about 1,000 sq ft or more to join the company's ever-growing pan-India franchisee network.
Mumbai's Tresmode, often seen gracing the ramps of London, Paris, Milan and New York, offers a versatile collection from party to work wear. It has marked presence across India and internationally and sells in cities such as Mumbai, Delhi, Pune, Goa, Bangalore, Chennai and Kathmandu. Now, the brand is seeking capable franchisees who can invest Rs 84 lakh along with an area of 1000 sq ft, for nationwide expansion.
Singapore-based Heatwave Shoes, a mid-segment brand requiring an investment range of Rs 1-1.5 crore is a potential opportunity for a high net worth franchisee. Operating for the last five years, it now has 40 stores internationally. The brand is eyeing key Indian cities for expansion.
For opening a Touristor showroom, an area of 800-100 sq ft in a good footfall area is required. Investment will vary according to city and location.
Brace up to success
No business is devoid of hurdles and footwear franchisees may also have to counter certain issues while setting up the store or operating it. The biggest challenge the franchisee will experience is to find the right real estate, reveals Tresmode's Kapil Mahtani. But he assures: “Benefiting from the experience we already have, the franchisee will not come across many challenges other than maintaining Tresmode's retail experience standards. Moreover, being a niche brand, it does not have much competition.
As more and more footwear retailers continue to saturate the Indian market, they need to remain abreast with the latest industry trends to capture the buyer's interest. Product development and diversification, and in-depth market research will be the key to long-term growth. Besides, metropolitan and tier I cities, consumers in smaller cities and rural areas offer a huge market waiting to be tapped by leading footwear retailers. Though locals remain price conscious, brands which understand their need and fashion sensibilities stand a fair chance of success.