Local Brands of Sports and Casual Shoes in India Started Rising
India is the world's second-largest footwear producer after China, with an annual output of about 2.2 billion pairs of various types of footwear. Exports of leather and footwear products from India are expected to exceed US$6 billion in the 2022-23 fiscal year due to growing demand in markets such as the United States and the Middle East, Africa, and Latin America.
At present, there are about 15,000 shoe-making enterprises in India, 85% of which are small and medium-sized enterprises. Five years ago, the top 10 players in the local sneaker market were all foreign companies, including Li Ning from China. However, in recent years, local brands began to rise, such as Campus Activewear, Relaxo Footwear, Metro Brands, etc.
Among them, Campus Activewear is the largest brand of sports and casual shoes in India. According to a report released by Technopak, in the fiscal year 2021 (April 2021-March 2022), its sales volume and sales accounted for 17% and 25% of the market share.
The company has more than 425 distributors and more than 19,200 retailers, covering more than 85% of the potential market for athleisure footwear in India. It was successfully listed on May 9, 2022, and its market value was 101.17 billion rupees as of June 30.
66-year-old founder Hari Krishan Agarwal has become a new billionaire in India, with a 74% stake worth 74.87 billion rupees. He began to get involved in the footwear market and founded a sports shoe brand called Action in 1983, and officially launched the sports shoe series, Campus, in 2005.
At that time, Nike, Adidas, and Puma were popular in India, but their prices were high, usually at $35 and above. Hari adopted a low-price strategy, set the price below $10, and successfully won a place in the market.
In the subsequent development of the company, Hari has been implementing the low price strategy to the end. Its men's shoes sell for 275-3499 rupees, women's shoes for 325-2199 rupees, and children's shoes for 350-1699 rupees.
Affected by the market environment, Campus achieved a revenue of $94 million last year, a slight decrease from $95 million in the previous year, but sales are gradually recovering. A total of 13 million pairs of shoes have been sold. Based on this calculation, the average income per pair of shoes is only about $7.23.
However, the low prices also limit the brand image and consumer groups of Campus, whose main market is small cities in northern and eastern India. According to a Technopak report, in fiscal 2021, the company's revenue in the second-and third-tier cities accounted for 73.1% of the total revenue, while the revenue in the first-tier cities with subways accounted for only 26.9%.
Nevertheless, they do not want to give up the market of first-tier cities, cause people in these places have stronger consumption power. The company expanded its product category from athletic shoes to casual shoes, the fastest-growing segment of the footwear industry in recent years. However, in addition to the low price, there are also R&D and design issues that affect its entry into the high-end market. For example, the design of Nike, Peak, and other brands can be found in many of its products.
The data show that per capita expenditure on sports and athleisure products in India is only $1.9. In contrast, it’s $33.8 in China and $227.3 in America. However, this also shows that there is a huge development potential in the market. In addition to the huge population, the local demand for sports shoes is also increasing.
His competitors, Relaxo Footwear and Metro Brands, the revenue of Relaxo Footwear and Metro Brands are $350 million and $107 million. Their products also cover sports and casual shoes, the prices are higher than that of Campus, and they have abilities to introduce leather shoes and high heels in business style. Thus, if the Campus wants to further develop, low price alone is not enough. It also needs to expand its sales and improve its R&D abilities.
Source: chinaleather.org
https://www.chinaleather.org/front/article/122351/6
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