India’s footwear market was valued at Rs 47,945 crore in 2018 and is expected to grow at a CAGR of 13 per cent over the next five years
Two major leather footwear and fashion products players are planning to expand their presence in India in the next few years. According to industry experts, India is the fastest growing footwear markets among the top 10 markets with a compounded annual growth rate (CAGR) of 7.6 per cent.
Tata International Ltd, the second largest exporter of leather footwear in the country, is planning to increase its presence in India through its own brands and also expand its product portfolio of non-leather footwear.
Clarks Future Footwear Ltd, the 50:50 joint venture between Future Group and UK-based footwear firm C&J Clark International, is planning to expand its presence from the current 50 exclusive brand outlets to 150 by 2022 and to increase touch points from the current 600 to around 1,500 by the time.
Tata International, which earns almost 90 per cent of its revenue from exports, is working on a plan to expand its business in India. The company, which currently sells 2,00,000 pairs of shoes through the institutional route, mostly children’s school shoe brand FeetScience, apart from some other articles, is planning to launch women’s footwear it sells in Europe under a new brand in India. It is planning to launch its second retail outlet in Chennai, after testing the model at Indore.
“India is going to be one of the big options for us in the next four to five years. We are not going to restrict ourselves to only being an exporter. Our domestic business may probably tend to change from the current 5-10 per cent to 15-20 per cent in four to five years,” said V Muthukumaran, head- Leather Products, Tata International Ltd. The company is planning to invest around Rs 500 crore in five years to support the growth.
Muthukumaran was in Chennai, at the announcement of India International Leather Fair (IILF), to be held from January 31 to February 3, 2020, organised by the Indian Finished Leather Manufacturers and Exporters Association (IFLMEA).
The company is expecting its sales to grow from 4.5 million pairs of footwear in 2018-19 to 5.3 million pairs in 2019-20 and to 7 million in 2020-21. It is expecting a topline of Rs 1000 crore for 2019-20 and is expecting it to grow to Rs 1150-1200 crore by the next year.
It also expects the non-leather footwear business to grow from the current 5 per cent of the business to around 15-20 per cent of the business over next five years.
India’s footwear market was valued at Rs 47,945 crore in 2018 and is expected to grow at a CAGR of 13 per cent over the next five years, with expectations to hit Rs 87,242 crore in 2023.
Clarks India is increasing its presence to around 400 large format stores this year from 300 such stores in the previous year and also plans to sell its footwear through 200 ‘mom and pop’ stores.
“We have increased our footprint pan India in the last one year. We did a complete rethink on our strategy. Increasing the foot print, creating market apt products, highlighting our technology and products are the key strategies,” said N Mohan, executive director and CEO, Clarks Future Footwear Ltd.
He said the company witnessed growth during 2019, selling 900,000 pairs compared to over 500,000 pairs of footwear in the previous year. Plans are to increase this to 1.4 million pairs during 2020. The sale by retail value for the company in India is around Rs 350 crore, of which net sale value is Rs 180 crore. The expectation is that the sales by retail value will grow close to Rs 500 crore. Almost 50-60 per cent of the products it sells in India are sourced from within India.