Footwear brand Crocs, which is redesigning its products and strategy for the Indian market, says it won’t be a mass market brand.
For American footwear brand Crocs, India is full of colour. That’s not just the cultural, ethnic and socio-economic diversity, it’s also literally the colours it dresses its shoes up in.
The brand, synonymous with its flagship foam clogs, has a clear vision for Indian consumers. To make consumers wear its brand 24/7, Crocs is realigning its style, design and even management structure.
Florent Andre Bailly, Vice-President (Middle East, India and Africa), Crocs, says for all other markets blacks, blues and olive greens will work fine. But not for India, he points out.
“India is so vibrant. We realised we have to be more Indian and localise our products to appeal to a large segment of consumers,” he says.
The Crocs design team played around with purple, yellow and orange to attract Indian buyers. And bang on, consumers young and old lapped up its casuals range. It is not just the colour of the shoes that were tweaked to tickle the Indian palate but also the style, design and retail ambience.
Bailly claims this has paid rich dividends for the company which entered India in 2007.
Crocs India started operations through a franchising and licensing agreement with Chogori India. The brand has 26 mono-brand outlets and is also present at 300-odd points of sale.
In the first phase of its retail journey, Crocs focused on establishing the brand in India. Now, the company is ramping up its management structure, selecting newer business partners and also innovating on its footwear range to include both casuals and formals.
“India is too big an opportunity to be missed. We were not focused enough till now. We have to be more Indian to gain market shares. We are working on aligning our management team to market dynamics,” Bailly adds.
The company said it may add another 5-6 stores by the end of the fiscal in India. Plans are also afoot to introduce its accessories range. Crocs’ retail stores are approximately 650-700 sq. ft. in size.
According to Assocham, the footwear industry in India is about Rs 22,000 crore with a CAGR of 15 per cent. “The domestic footwear market is driven by growing fashion consciousness with increased disposable income among India’s urban middle class. This contributes about 45 per cent of the overall footwear market making India the second largest global producer of footwear across varied segments after China.”
Interestingly, the per capita consumption of shoes (footwear) in India is currently about 2.5 shoes per year. For players like Crocs it is a sea of opportunity.
The domestic footwear market is dominated by the men’s segment which accounts for about 55 per cent followed by the women’s and kids’ segment which account for about 30 per cent and 15 per cent respectively.
Kanchan Lall, Associate Vice-President, Tecnova India, which facilitates India entry for foreign retail brands, notes that, “In the last decade or so, consumer buying behaviour has changed drastically. Footwear has become an impulse buy from a mere need-based product. This is growing the market.”
However, the growth of branded footwear is still restricted to the top 25-30 cities. The market itself can be divided into four categories – mass market priced between Rs 100 and Rs 800, high end (Rs 1,000-Rs 3,500), premium (Rs 5,000-Rs 8,000) and luxury (Rs 10,000 upwards).
Lall points out that about 50 per cent of the market is still mass. “Crocs, we believe, will be in the high end segment.” Lall adds that the retail forays of both domestic and international brands are growing the market.
Not just plastic
Ask Bailly if Crocs is moving away from plastics, he says, “Our attempt is to create a complete portfolio. This means we are not just footwear in foam but also in leather. There is increased purchasing power. Where earlier they used to buy a pair of shoes a year, they are buying a pair of shoes every 2-3 months. We want to be a brand for shoes everywhere, anytime.”
The company plans to shift image from being fun and casual by launching formal footwear. Crocs became synonymous with comfort when it introduced the material called Croslite. It is a closed-cell resin that is lightweight and keeps the feet comfortable.
“From just one style in rubber and plastic, we have about 250-odd styles including a few in leather. Our new campaign, ‘Work in comfort, wear in style’ aptly reflects our revamped image,” he adds.
Crocs, which was looking to set up a manufacturing capacity, says it has dropped the plans for now as it could not find the right design and pricing strategy. “We have manufacturing plants in China, Vietnam and Mexico. We were looking at India but have dropped the plans. It is not on our strategic board anymore.”
Crocs India said its global revenues crossed $1 billion mark during the year ended December 31, 2011.
Ashutosh Lawania, Co-founder and Head Sales, Myntra.com, which retails Crocs products, notes that their pricing is a challenge to its growth. They are priced Rs 995 onwards. “Crocs is not our top selling brand. We believe the price of the products is on the higher side. Also, a lot of imitation products are available at much cheaper price points.” Myntra says footwear accounts for as much as 65 per cent of its revenues.
Lawania believes that even if Crocs moves out its flagship product to leather and other casual lines, it will have to work on the price points. “Ideally, the price points the company should sell its products at for the Indian market should be Rs 1,200-Rs 3,500.”
Ask Bailly if the brand will be a mass market brand, and he says, “I don’t think that is the segment we are looking at. There are issues related to taxation and VAT which make the products expensive in India.”