In a bid to counter the deep discounting strategy of e-tailers, footwear major Bata India plans to create a portfolio exclusively for online channels. This means a pair of shoes available online will not be found in any of its stores.
According to Rajeev Gopalakrishnan, Group Managing Director - South Asia, Bata, the online portfolio may include over 500 products across categories including footwear and accessories.
“The move to have an exclusive online portfolio will help us avoid a clash with our offline channels. We will not have the same stocks online and in the brick-and-mortar stores,” he said at a press meet after the company’s 82{+n}{+d} AGM.
The average ticket size for online sales stands at over ₹1,000. For a family store, the sales value varies between ₹700 and ₹800 and for a city store, ₹1,000-1,200. Bata sold around 2 lakh pairs of shoes online in 2014, and is looking to make it 10 lakh by the end of this year.
It sells not just on its own site, but also through other portals such as Myntra, Flipkart and Amazon.
The plan, Gopalakrishnan said, is to have online sales account for nearly 5 per cent of the company’s total turnover over the “next few years”.
“There is huge scope of growth in the online segment. What we see now is a deep discounting model. But over a period of time there will be a correction, with new business models emerging. Focus will then be on profitability. This will present an opportunity for us,” he said.
The company has therefore also set up a separate e-tailing division with a staff strength of around 25, he said, adding: “We are investing in the (online) infrastructure too.”
The company, meanwhile, has earmarked a capital expenditure of ₹80-100 crore for this fiscal. A part of this will be used to modernise and renovate its factories in West Bengal, Bihar and Karnataka. The focus will also be on design and technology, and minimising factory seconds.
Bata is also planning to launch standalone stores for its “Power” brand of shoes. Mainly aimed at college goers, the first concept store will come up in Delhi, followed by tier-II towns.
The company also has standalone retail stores for Hush Puppies (premium segment) and Footin (affordable segment).
Bata has also entered into a tie-up with Walt Disney to roll out a children’s footwear range by the end of this month.
Profit up 60% Bata India reported a near 60 per cent jump in net profit to ₹92 crore for the quarter ending June 30, against ₹59 crore in the previous year period. Total income rose 9 per cent to over ₹680 crore (₹622 crore).