DISSECTING THE TRENDS IN THE INDIAN FOOTWEAR INDUSTRY & PRESENTING THE VOID- THE MISSING SHOE.
Shoes. The word is enough to paint a mental image in our minds. The product has become an essential omnipresent in our lives. The current product category can be seen below (source: indiaretailing.com:
The larger share of Casual & Sports can be attributed to the wave of international brands that entered the Indian market post liberalization in 1991. Through their slick and aggressive marketing & advertising, the companies successfully changed consumer behavior. Citing Business Wire, The Indian Footwear market is projected to display a robust growth represented by a CAGR of 8.28% during 2020-2025, being valued at USD 9.70 Billion in the year 2019 (3rd largest in the world behind USA & China).
Industry trends in India suggest a product in the "maturity" phase of the product life cycle. The sector has seen little to no innovation for almost a decade now. In such stagnant times, the trick is to innovate on aspects OTHER than the product. Given below is a list of such practical steps companies can adhere to (Nike are you reading?:)
CUSTOMIZE TO MAXIMIZE PROFIT
The one aspect which all Indian competitors are yet to monetize upon is personalization & customization. The idea that a person can design & create his own shoes appeals to all. The trick here is to make the consumer believe that he has enough options by allowing pre-emptive slight changes like color, design & sole type. To handle manufacturing, brands can efficiently utilize data analytics to predict demand by data mining the preferences selected by consumers while signing in the app/website. Nike is already using this to great effect in the USA. As of now, there are only a select few startups that provide custom shoes (only of leather). Any established market player like Nike & Puma can make use of their market resources & streamline the manufacturing of sneakers (sports shoes) while appeal to the vast majority of the tech savvy young middle class. Demographic trends suggest this class is ready to explode in a few years, thereby exponentially increasing potential consumers.
Note: The customization shown in the GIF above is available only in the USA & a select few western European countries. thus, an Indian introduction is basically a novel suggestion.
GOING THE D2C ROUTE
D2C is constantly disrupting retail in India. Nykaa & Boat are two brands who have hit the jackpot by going the D2C route. Startups in the footwear industry as well as established players can flip the current distribution network by adopting the D2C channel. This will reduce the number of participants in the supply chain which can either reduce prices for consumers or inflate profits for companies. The increasing number of "digital buyers" in India due to the rampant internet penetration can make this decision financially feasible. The simple fact is that everyday in India, more & more people who have the propensity, desire & ability to buy stuff are joining the internet due to plummeting data costs. The graph below (sourced from Inc42) graphically tells the story.
THE NICHE STRATEGY
Another unexplored avenue for Indian shoe marketers is the niche strategy. Niche essentially means catering to select few where the target consumer is very distinct but usually smaller in number. It would make sense for new entrants to follow this strategy to gain a foothold in the market. Given below are some suggested strategies:
Footwear designed for the elderly focusing on comfort & ease of use.
Special shoes for people with certain ailments like flat foot.
Partnering up with studio/entertainment/book houses (like Amar Chitra Katha) & making specially curated footwear monetizing on the fan/follower of certain characters/shows/movies.
A RURAL PIVOT
The vast majority of the rural footwear market share is dominated by the unorganized sector due to its price competitiveness. The price conscious consumers of rural India prefer buying local non-branded footwear products. Established brands like Bata can gain a foothold in the rural market by cutting down costs & lowering their price point. Another point to keep in mind is that rural consumers have more traditional & conservative preferences when compared to their urban counterparts.
CONCLUSION
All the current players in the Indian footwear market bank on one or both of the two ingredients to increase or sustain their market share:
Brand
Price
The strategies suggested break this shallow constraint & give companies some room to maneuver. It not only makes the products more appealing for consumers but also has a positive effect on the profit margin of the company.
This was my first (the first publish worthy) try at market research in a nutshell. I hope you found this new approach insightful. Till my next piece, stay safe, stay indoors.
Peace.
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