REPORT

ON
FOOTWEAR RETAIL
INDUSTRY

N. ROHIT
121823602049
MBA-B
 INTRODUCTION:

Retailer is the person or institution who delivers goods to final

consumer in the channel of distribution. Goods and services are
created for consumption and use by people, it is retailer who
assumes the role of taking the goods to its final destiny of
consumption.

The word retail is derived from the French word Retailer, that is to
cut a piece, a break down. A retailer buys in large quantity from the
middleman or manufacturer and breaks the bulk in small quantity,
sells or markets them in small quantity to meet the needs of
customers.

India is the second largest footwear producer in the world, with footwear
production accounting for approximately 9 per cent of the global annual
production – 22 billion pairs as compared to China, which produces over
60 per cent of the global production.

India annually produces 2.1 billion pairs of which 90 pc are consumed

internally while the rest are exported primarily to UK, Germany, USA,
Italy and France

India annually produces 2.1 billion pairs of which 90 per cent are consumed
internally while remaining are exported primarily to European nations
which include United Kingdom, Germany, USA, Italy and France, as per
market analysts.

Footwear exports from India have grown at a CAGR of 20 per cent in

Indian Rupee terms during the last five year backed by growing demand
from European nations and increasing focus of main importing countries
to shift sourcing from China to other low cost producing countries.
India is the third largest footwear consuming country in the world after
China and USA, but with very little separating the three, India is very soon
expected to be the second largest consumer as well.
In absolute terms, footwear exports from India have risen from Rs. 71.5
billion in FY10 to Rs. 180.0 billion in FY15.

The growth in Indian fashion and lifestyle market has given an impetus to the
footwear industry as well. From a basic need-based industry, it has become an
evolving fashion and style category.

MAJOR PLAYERS
 The Second Wave: International Sportswear Giants

A significant shift post liberalisation was that lifestyles expanded to foster great
value for the sports/active segment and for casualization as a whole. The
technological prowess of global sportswear giants enabled them to functionally
and fashionably appeal to a young India.

Today, these international giants dominate the sports footwear category. The
market is held by Adidas, Nike, puma, lotto, Reebok and we expect the newer
entrants ASICS, Sketchers, Crocs, Salomon etc to begin posing challenges to the
Big 5 soon. A highly notable home grown success story however
is Woodland that is a top of mind name in the adventure and outdoor segment in
India.

Time of
Brand Retailing Format In India Key Indian Partners
Launch
Basic Clothing, CS Retail, Comfy
Reebok 1995 Franchise outlets, MBOs Shoemakers, Emdee, Mayur Associates
Retail (Sri Devi), Uttam Trading
Mystore, RJ, SSIPL Group, Saffron
Nike 1995 Franchise outlets, MBOs
Group etc
Adi Sports, Comfy Shoemakers,
Adidas 1996 Franchise outlets, MBOs Goodwill Enterprises,
Mayank, Swaranbhadra etc
A&S Creations, Hindustan Army Store,
Salomon 2002 MBO
Planet Sports and Central Stores
Bhawar, Ethix, Kapsons,
Puma 2006 Franchise outlets, MBOs
Samarth, Shreyas
 Stand alone stores and 200+
Lotto 2007 Sports Lifestyle Pvt. Ltd.
MBOs
Through Metro Shoes and
Crocs 2007 Metro Shoes
EBOs
EBO, Palladium, Emporio,
Paul &
2009 Mumbai Airport, Hyderabad 50:50 JV with Reliance Retail
Shark
Taj Krishna Hotel
Through MBO only till
beginning of 2015, started
ASICS 2010 Reliance Retail/Footprint
opening franchised stores
since then
Mono Brand Retail through
Sketchers 2012 Future Retail
JV
Airwalk 2012 Through MBOs only Reliance Footprint

 GROWTH OF FOOTWEAR INDUSTRY:

India has state-of-the-art manufacturing plants. The footwear sector has matured
from the level of the manual footwear manufacturing method to the automated
footwear manufacturing systems. Footwear production units are installed with
world class machines. Manned by skilled technicians, these machines help to turn
any new innovative idea into reality. Support systems created for the sector have
indeed served the footwear industry well. India has a well developed footwear
component manufacturing industry. The future growth of the footwear industry
in India will continue to be market-driven, and oriented towards EU and US
markets. With technology and quality of the footwear improving year after year,
Indian Footwear industry is stamping its class and expertise in the global footwear
trade.

 Market Scenario:

Footwear industry in India is very optimistic right now with growing

awareness about the latest trends and consciousness among consumers.
Affirms Ishaan Sachdeva, Director, Alberto Torresi, “Be it men’s
category or women’s, footwear have now become a necessary style
statement for everyone. A lot of western influence can also be noticed these
days where people are inclined towards styles like Oxfords taken from
Europe and Brogues from Ireland.” This industry has seen a tremendous
growth in the last few years. The demand for footwear products in India is
increasing with each passing day. Harkirat Singh, Managing Director,
Woodland, says, “Indian footwear industry is approximately between
Rs.30,000 crores to Rs.40,000 crores. And this can grow up to 100 percent
by next 5 years provided the right policies and tax structure. This market is
shared between organized and unorganized segment. The organized
segment caters to about one third of the market while unorganized player s
fetch the remaining 70- 75 percent market which essentially falls under
micro, mini, small and medium enterprises.” With the rising disposable
incomes of the customers, India’s domestic footwear market is booming.
Rising incomes, advent of globalization, improved employment and living
standards in the country has led to the expansion in the size of this
market. Anupam Bansal, Executive Director, Liberty Group, agrees and
says, “Also, consumer’s increased exposure to plastic money and
imposition of GST is going to provide more organized retailing and trade
transparency in long term. Government of India has already commenced the
“Make in India” campaign which has been proving beneficial in boosting
manufacturing in India. Secondly, due to the ever increasing internet
penetration and adoption of internet and the overall ecosystem for e -
commerce falling in place, the last decade has been the best for this
industry.”

 JOB OPPORTUNITIES IN RETAIL FOOTWEAR INDUSTRY :

 Sales and related jobs:

Sales are the main aspect of retail industry. It is an important part of store
operations. The important duty of the sales staff is to sell the products to
the customers. Other than sales, the related job involves, sales associate,
cashier for receiving payments by cash, check, debit card, or credit card
and operating cash registers etc

 Store manager:
A store manager is the person ultimately responsible for the day- to-day
operations or management of a retail store. All employees working in the
store report to the store manager. Store manager is responsible for
managing human resource, hiring team, indulging training and
development programmes, managing profit and loss of the store, banking,
and handling customer complaints.

 Finance and Accounting:

A retail store requires well run financial department. A financial manager

is responsible for keeping the records of accounts of income, paying
expenses, maintaining financial records, cash flow control, banking etc.
The financial manager must be efficient enough to handle the risk of
debts
 Human resources:

Human resource is one of the most important aspects in retail industry.

This aspect focus on recruiting right people for a particular job, because
the success of retail depends upon right sales force.

 ChallengesAhead:
While the footwear industry is set for an exponential growth in the
times to come, there are many challenges that are continuously
erecting roadblocks in the process. “The industry is already working
towards consolidating the growth. This has seen technology being the
key element in making things possible to enhance growth. Many
institutes have blossomed to provide retail professionals to the
industry which will help in the long run. The government initiatives
to taper down the real estate demands and make the pricing more
pragmatic will also give a boost to the retail industry and push it to a
higher growth path,” says Anupam Bansal. Talking about other
challenges facing the industry right now, Farah Malik maintains, “The
unorganised retail market is the most dominant and popular mode of
retailing and purchase destination for the majority of India’s 1.3
billion population. Like food habits, footwear fashion changes every
100 kilometers. For example, the shortest heel preference in
Chandigarh is the longest preferred in Kolkata. Hence, fashion
footwear has always been dominated as well as successfully managed
by local retailers. The unorganized footwear industry also enjoys the
advantage of the passion and zeal of its business owners that is
difficult to replicate across employees and store personnel. Also,
footwear retailing primarily involves touching the feet of our
customers as part of service and hence the front end does not attract
the best manpower in terms of education, technical expertise and
sophistication.” Apart from these, Harkirat Singh point out that
product counterfeiting is another big challenge for the organized
footwear industry. “Organised sector is something we cannot avoid
because it’s the bigger chunk of the market. But the real problem lies
in stopping the counterfeit products; its easy to sell fake shoes for the
unorganized retailers but that ultimately hampers the brand image as
consumers start associating the quality and performance of a fake
product to the brand. We try to curtail that through legal processes
where we conduct raids, seize counterfeits and apply to some suit in
the court, etc. But that still possess as a big challenge for us, especially
in a country like India where we don’t have too many laws against
counterfeit, he asserts.