The Hindu Business Line : Footwear exporters want one foot at home

Chennai, Oct. 6 Leading footwear exporters are now focussing on the domestic market as they see a growth in demand for high-quality footwear, better margins, and the opportunity to grow their own brands, as opposed to an anonymous presence in the overseas markets as suppliers for established brands.

While the exporters have been talking about exploiting the domestic market, the capacity to establish a distribution network and feeding a large chain of retail outlets had been limited.

This had been a deterrent to manufacturers nurturing hopes of making a mark in the domestic market.

But now, the growth of organised retailing with the entry of national players has helped footwear manufacturers address the distribution network.

Leading players in the South have firmed up plans to enter the domestic market.

The Chennai-based Forward Group and the Farida Group, two of the largest footwear exporters, have plans for the domestic market.

Why now is the time

Mr Muhamad Yavar Dhala, Managing Director, Forward Group, lists reasons that make it imperative for a domestic presence — the growth markets are here and are set to out-do established markets such as the US and Europe in the coming years; a presence now will help when the domestic market comes into its own in a few years; as suppliers for overseas brands — ‘glorified job workers,’ as he put it — manufacturers are under continuous pressure to keep prices and margins down; and there is the threat of international buyers latching onto a lower cost supplier.

The Forward group is looking at a significant presence in the domestic market as part of a joint venture, Pavers England Footprints Ltd, that will supply to domestic retailers and establish domestic brands.

Some of the retail chains Pavers England has tied up with include Reliance Footprint, Koblerr, Loft, Central and Wodz. Soon the list would include Lifestyle, Westside and more, he said.

Pavers England also plans to set up flagship outlets in the metros, starting with Delhi in the immediate future and then expanding to Bangalore, Hyderabad, Mumbai and Chennai.

The objective is to offer international comfort and styling at prices lower than those of established brands though they may be costlier than some of the popular brands available here.

The price range of men’s shoes is Rs 1,500 to Rs 2,500 and that of ladies’ shoes, Rs 1,000 to Rs 1,500.

Pavers England will also import footwear for the domestic market and plans to outsource production. It has introduced the Italian brand Fly Flot, a fast growing women’s comfort shoe brand in Europe, to the domestic market. Fly Flot is looking at setting up a manufacturing base here and the Forward Group is in discussions on investments.

Distribution network

According to Mr Rafeeque Ahmed, Chairman, Farida Group, one of the leading exporters in India, the group has enough built-in capacity to cater to the domestic market.

It has initiated discussions with Woodlands and Bata to offer domestic brands. Distribution is the key to a strong presence in the domestic market.

The growth in retailing would now support footwear manufacturers’ expansion in the domestic market.

The Farida group is among the largest footwear manufacturers with capacity to make over 23,000 pairs of footwear a day.

Overseas firms were also looking at tying up with domestic manufacturers to set up joint ventures and retail outlets for leather footwear, he said.

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