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Bata on forward march

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Generations have gone to school and grown up on Bata. Now the footwear major is reinventing itself to appeal to a younger generation..

A new-look Bata store in Delhi.
A new-look Bata store in Delhi.

Swetha Kannan
Anjali Prayag

Bata is on a front foot. Seventy-five and still running strong, the age-old footwear brand has marched a long way from its early ‘Back-to-School’ shoe days to now.

With deep purple vying with shocking pink and bright burgundy, strappy sandals cheek-by-jowl with mighty moccasins, the retailer today has upped its fashion quotient with a huge array of trendy footwear. Perhaps the first footwear brand to set foot in the country, Bata is now looking to “surprise” customers with an expanded range – all at “great prices” – in a new and improved shopping environment.

Since 2005, Bata India, part of the Switzerland-based Bata Group, has been taking big and bold strides in this direction by expanding its retail footprint in major metros and cities, revamping key stores and closing unviable ones, apart from driving focus on product design and introducing new offerings every month. Says Marcelo Villagran, Managing Director, Bata India Ltd, “Realising that customer service is the mantra that brings in footfalls, the company has undertaken several initiatives. This was tied in with a regular customer feedback process, customer research and training programmes to improve service. All this has helped us present a much more youthful and vibrant face to the customer, who has appreciated the change with an increase in our retail sales.” The company sold 4.5 crore pairs of footwear in financial year 2008-09.

Though Bata did not exactly go in for rebranding, it decided to reinforce its image as the ‘most trusted footwear brand’ and enhance it with a contemporary look – be it in the product offerings or at the stores.

Bata, which shifted its headquarters from Kolkata to New Delhi, has a range of offerings for every market category and occasion. “While being strong in men’s shoes, we have grown in the ladies, sports and childrens segments also. Bata shoe stores are targeted at the family and its products meet the needs of all its customers,” emphasises Villagran. Bata also has options ranging from the formal to the casual to the funky and fashionable, not to mention the sturdy.

Bata has also launched a new specialised division — Bata Industrials — to offer specialised footwear to various sectors – defence, automobiles, metals, petroleum, construction and agriculture. “Bata Industrials is the world leader in high performance safety shoes and has experience of this market segment and access to world class technology, and knowledge on safety footwear,” explains Villagran.

The ‘99’ magic formula

Even while juggling with its portfolio, Bata all along has managed to keep its pricing competitive and attractive for customers. “Bata is a value-for-money footwear brand. Bata is committed to providing quality footwear at great prices to its customers and we have shoes for every foot and every social class to suit every member of the family,” says Villagran. Bata is able to offer customers “great prices” due to its multi-pronged sourcing strategy, he says. “Today, we are sourcing our collection from our factories, especially in areas where we have a competitive advantage, and also from high quality suppliers, both from India and abroad. With this multi-sourcing strategy, Bata India is now able to procure faster, more economically and react faster to changing customer needs thus offering to the consumer very good quality, trendy shoes at very affordable prices,” elaborates Villagran.

Bata has also pulled up its socks where it counts most – the retail space, where majority of the purchasing decisions are made. Bata stores are now spacious with over 3,000 sq. ft. of retail space; some are even larger than 10,000 sq.ft.

Bata’s retail environment underwent major changes with superior store fit-outs and furniture. The stores have been designed by a “specialist team” of retail designers from Italy in collaboration with Bata’s in-house team of architects. The layout of these stores is as per international Bata standards.

All geared up!

The footwear major today has 5,000 stores in over 40 countries, including 1,300 across 400 cities in India. All of them are company-owned. “We are focused upon opening new Bata Shoe Stores in major metros and also cities with a population of more than half a million across the country, to increase our reach to the customer. Bata India Ltd plans to add around 60 stores every year. We are also reaching out to the rural market through our dealer network,” says the MD.

Bata has also channelised its efforts in turning around its wholesale operations on a sustainable basis by bringing about a major improvement in the shoe line by introducing shoes with some additional features to target more premium distribution channels.

In addition, the company has undertaken consolidation of its manufacturing operations to focus on products where it has a competitive advantage.

The wholesale division was restructured into four independent distribution channels – urban, safety, institutional and branding – each with its own sales teams to create more impact and result in better sales.

Villagran explains that a strong focus on financial controls and processes and evolution of the retail, wholesale and manufacturing operations has helped the shoe major in not only bringing about a continuous improvement in sales and profits over the past few years, but also substantially reduced its borrowings and generated higher liquidity to fund growth plans.

Bata has also invested in building its technology backbone and systems. For instance, the company has installed a ‘point of sale’ software in almost all its retail locations; other major financial and commercial processes were brought onto the technology platform. All these efforts at building the brand did pay dividends as the company clocked a turnover of Rs 1008 crore last year. The global crisis seems to have had little impact on the company as Bata posted a 13.2 per cent rise in net profit to Rs 18.34 crore in the second quarter ended June 2009.

According to consulting firm Technopak Advisors, the footwear market stands at Rs 21,000 crore and is growing at 8-9 per cent annually. The branded segment constitutes 40 per cent of the market which is expected to rise to more than 50 per cent in 5-6 years. Bata battles it out in the organised segment with the likes of Liberty, Woodland, Khadims, Metro and Red Tape and sportswear brands such as Nike, Reebok and Adidas.

“Bata has done well in the last few years with better looking stores with relevant stocks for the catchment, attractive pricing and introduction of more fashion products,” says Mr Purnendu Kumar, Associate Vice-President, Technopak Advisors.

Although the global meltdown did force Bata to cut its expenses, the company did not go slow on expansion or modernisation. “No doubt the global economic slowdown has impacted all the businesses in India. To compensate for this, we reinforced our focus on the implementation of our plan with new stores, better collection, training and recruitment of people. Our strategy of opening large format stores has been successful and we continue to invest in expanding our retail business with the opening and renovation of two stores per week on an average,” explains Villagran.

With a revamp and new product range, Bata has now put its best foot forward.

Related Stories:
Bata India seeks toehold in Defence, rural markets
Bata launches direct distribution channel

(This article was published in the Business Line print edition dated July 30, 2009)
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