Tata International Ltd (TIL) will focus on innovating its footwear product design and development to appeal to non-European nations because of the economic slowdown in Europe. Consequently, it plans to bring down exports to Europe from 85 per cent now to around 60 per cent and increase exports to other markets, particularly the US.

N Mohan, Global Head, Footwear Business and Leather Products, TIL, said with leather exports to the European Union coming down, the company is looking at the US and the Southern Hemisphere as potential markets.

The company will leverage on design studio in Italy and Portugal to engineer products based on customer requirement. This is one of the biggest challenges and innovation will be a major differentiator considering there are many players in the leather industry, Mohan said.

Exports to Europe account for 85 per cent and the US and other countries account for the balance. The company now aims to export 60 per cent to Europe and 30-35 per cent to the US and 5-10 per cent to markets such as Australia, New Zealand, South Africa, Chile and Brazil. Mohan said, “Though markets like Australia, South Africa and Brazil are small, geographical and seasonal segregation reduces the risk as the seasons are different.” If it is winter in the US, it will be summer in Australia, so the surplus winter footwear could be shifted in time for its winter sale.

The company also plans to increase production capacity from 6.5 million pairs per annum to 10 million pairs in the next three years. The company generated revenue of ₹800-825 crore in 2015 and expects to reach ₹900 crore next year.

Following the success of Aerosoles, a premium women footwear brand, TIL plans to launch Aerology, a mid-market brand, in the next 6-12 months. While Aerosoles cost around ₹3,000 and is available in 90 shop-in-shop outlets, Aerology costs ₹1,500-2,500. There are plans to launch exclusive footwear for men in the range of ₹2,500-4,000 range. Mohan said TIL will tie-up with more online retailers to boost domestic sales.

With increasing disposable income and aspiring young population, the leather market in India is growing. The leather industry is poised to grow from $12 billion to $27 billion by 2020, with the domestic market accounting for $15 billion. “Though we are not currently focusing on India, a team is in place to study the market and design shoes specific to India,” Mohan said and added that they are aiming to produce 5 lakh pairs in the next 3-5 years.

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