Indian Footwear

Industry Analysis
GROUP 10
KUNAL AHIRWAL (1710027)
NISHANK MAHESHWARI(1710034)
RAKESH KUMAR (1710039)
RUPA RANI KUDUMULA (1710042)
SRIHARSHA PALVADI (1710053)
 Order for the Day
Market Overview
Five Forces Analysis
PESTEL Analysis
SWOT Analysis
Conclusion
 Market Overview
Footwear Category-Men, Women, Children
Revenue generated from sale of all type shoes except Sports shoes
CAGR of 10%
India is 2nd largest Producer in the world
India is 3rd largest Consumer in the world
Total revenue - $5667.1 million in 2016
Indian nearly buy 2 billion pair every year
Forecasted to grow at CAGR of 12.5 % in next % years
 SALE IN MILLION AND DISTRIBUTION
GROWTH RATE CHANNEL
10000 Clothing, Footwear & Accessories Specialists
9000
8950.4 Department Stores
8000
7000 7930.6 Hypermarkets, Supermarkets & Hard Discounters
6000 7029.7 Online Retail
6241.3 Sale in million
5000 5667.1 Other
4000 Growth %
3000
5%
2000 4%
1000 5%
0 11.8 11.8 12.1 12.6 12.8
2016 2017 2018 2019 2020 7%

Market Category
Segmentation

12%
79%

31%
57%
 Buyer Power
4

Five Forces Analysis

3.5

2.5

1.5
Degree Of Rivalry Supplier Power
1

0.5

New Entrants Substitutes

 Buyer Power Threat of
Backward Integration is Low Substitutes
Switching Cost is High
Price Sensitivity is High
Supplier Power
Tendency to Switch is High Beneficial Alternative is low
Supplier Size is moderate
Product Dispensability is low
Player Independence is High Overall Weak
Overall - Moderate
Importance of high quality/cost is
High

Forward Integration is low

Substitute input is low

Overall - Moderate
New Entrants Degree of Rivalry
Market Growth is High Ease to expand is High
Weak Brands is Low Undifferentiated product is Moderate
Undifferentiated Product is Moderate Storage Cost is Moderate
Distribution Accessible is High Number of Player is High
IP provided is low Switching Cost is high
Fixed Cost is Low Fixed Cost is Low
Switching Cost is High Competition is High
Supplier Accessible is High Overall- moderate
Overall - High
 PESTEL ANALYSIS
Political Analysis
Effect of new GST
Fund allocated to Footwear industry in Budget 2017
Campaign by government to boost the revenue of footwear
industry
Economic Analysis

Growing per capita income

Increase in purchasing power
 Social Environment
Positive change in attitude towards branded footwear.
Willing to spend more on Footwear because of social image
Increase in education which prospers footwear industry

Technological Analysis

New technology such as CAD, state-of-the art, 3D design

Tie-ups with international laboratory of SATRA, UK, PFI
 Legal Analysis

Advantage of UCA law

Minimum piracy of software in India, good opportunity to expand
footwear industry

Environmental Analysis

Environment pollution increasing

Health problems increased
 Strengths
Sufficient productive capacity
Tanning & Footwear
Abundant Raw Material
Supplies
Growing export market
Availability of low cost labor
Export-friendly government
policies.
Government schemes and Tax
incentives on machinery by
Government.
Well-established linkages
with buyers in EU and USA:
Growing investments &
Advanced machinery
Availability of qualified
leather technologists.
Weakness
Low level of modernization
and upgradation of
technology
Lack of strong brand image.
Low level of labor
productivity due to
inadequate formal training /
unskilled labor
Lack of more organized
product manufacturers.
Less access to testing,
designing and technical
services
Unawareness of international
standards as most number of
leather industries are SMEs.
Opportunities
Growing fashion
consciousness in both
globally.
Availability of state of art
technologies to increase
operational efficiency
Exposure to newer markets
through Fairs/ BSMs
Revival of market in classic
shoe manufacturing, hand
crafting etc
Scope for Product
diversification
Support by Government
through many schemes like
Make In India
Threats
Threat of entry by
multinationals in domestic
markets.
Stiff competition from Asian
countries (Five countries viz,
China, Indonesia, Thailand,
Vietnam and Brazil.)
Non-Tariff barriers
Fast changing fashion trends
are difficult to adapt for the
Indian leather industries.
Limited scope for mobilizing
funds through private
placements and public issues,
as many businesses are
family-owned.
Footwear & Footwear components
Production in 2016 (in mn pairs)

Leather footwear 909

Leather Shoe Uppers 101

Non-Leather Shoe/Chappals etc 1056

COUNTRY % SHARE ( 2016-17)

U.K. 16.83

GERMANY 13.63

U.S.A. 12.34

ITALY 7.26

FRANCE 7.23

SPAIN 4.62

U.A.E. 4.20
 CONCLUSION

It is a growing industry.

Good scope in exporting.

Buying power of citizens also increasing

Technological implications and innovations should follow.