Вы находитесь на странице: 1из 15

Indian Sports Industry in a Nutshell

The footwear sector is a very significant segment of the Leather Industry in India. Footwear is the engine of growth for the entire Indian leather industry and India is the second largest global producer of footwear after China, accounting for 14% of global footwear production. of 14.52 billion Pairs. India Produces 2065 million pairs of Different Categories of Footwear (Leather Footwear 909 million pairs, Leather Shoe uppers 100 million pairs and Non-leather footwear 1056 million pairs) India exports about 115 million pairs. Thus, nearly 95% of its production goes to meet its own domestic demand. The major production centres in India are Chennai, Ranipet, Ambur in Tamil Nadu, Mumbai in Maharastra, Kanpur in U.P., Jalandhar in Punjab, Agra, Delhi, Karnal, Ludhiana, Sonepat, Faridabad, Pune, Kolkata, Calicut and Ernakulam. Footwear exported from India are Dress Shoes, Casuals, Moccasins, Sport Shoes, Horrachies, Sandals, Ballerinas, Boots, Sandals and Chappals made of rubber, plastic, P.V.C. and other materials.

INTRODUCTION
Sportswear has become a big market today with most of the people showing their interest in sports during their leisure or free time. Now-a-days sports apparel scenario has seen a major makeover with new fabrics being introduced that provide better fit, more comfort and are even fashionable. Apart from apparels, even the footwear trend is changing with the new technological advancements. Sports have become so popular recently that sportswear industry has wide range of options for everyone including from kids, college students to men and women. Having sportswear for children may make them feel special and just as important as the adults. Their attire usually consists of many colorful things just to spice up there sports dressing. Sometimes these colorful spiced up dresses may even inspire some of the young kids to get into sports. With over 40% of female fans interested in sports and increasing number of women athletes, it is very important to have right clothing for them. Most of the stores today offer a complete line of women and girls sports apparel or you can even shop on-line. Recently even the men sportswear has seen a major change with the changing trends. Sports wear are improving with the new technologies and they have become lightweight, durable that offer protection to the wearer as well as provide utmost comfort in any type of condition. Sports apparel today is not only designed for function but most garments today also employ designs that make them more fashionable.

. MNC Brands sourced from India Acme, Clarks, ColeHann, Deichmann, Ecco, Elefanten, Florsheim, Gabor, Hasley, Hush Puppies, Double H, Justin, Marks & Spencer, Nautica, Nike, Nunn Bush, Reebok, Salamander, Stacy Adams, Tony, Lama, Next, Bally MNC Brands Sold in India Indian Brands sold in India

Aldo, Bally, Clarks, Ecco, Red Tape, Bata, Liberty , Florshiem, Ferragammo, Khadims, Lakhani, Metro, Hush Puppies, Lee cooper, Action Lloyd, Marks & Spencer, Nike, Nine West, New Balance, Reebok, Rockport, Stacy Adams

Nearly 75% of Indias Export of Footwear is to the European Countries and the USA. The Indian Footwear Industry provides employment opportunities to a total of 1.1 million people, mostly from the weaker sections of the society. Out of this, about 0.2 million are employed in the organized sector, 40% of whom are women. Remaining 0.9 million people are engaged in unorganized footwear sector like rural artisans, cottage and household units etc. The Footwear Sector is now de-licensed and de-reserved, paving the way for expansion of capacities on modern lines with state-of-the-art machinery. To further assist this process, the Government has permitted 100% Foreign Direct Investment through the automatic route for the Footwear Sector.

BACKGROUND
Out of the Gym, into the Street, Sports Apparel Has Become a Big, Growing Business. Sports apparel is no longer confined to gyms. In fact, leisure apparel, especially for women, and increasingly for teenagers, has become one of the hottest lines in the garment industry. Last year, the nations specialty and department stores rang up U.S. retail sales of sports apparel totalling $43.7 billion, representing 22.8% of the overall clothing market, and increasing 5.6% from 2005, a 40% faster improvement than the rise in overall apparel sales. The steady growth of athletic-style clothing has forced clothing designers to change the direction of their overall lines to include a broader selection of sports-inspired looks. Consumers are demanding sports apparel and sporting accessories that possess a blend of fashion, function and performance However, the largest challenge facing sports apparel companies will be gaining market share in an already maturing market. Its important to also recognize that despite its size and growth, the sports apparel market remains highly fragmented, with the leader Nike, Inc. having only a 3.8% market share, and it scales down sharply from there. Moreover, consolidation is becoming significant, driven primarily by the need for economies of scale in dealing with suppliers stretched around the globe. The industry has also increasingly become the focus of private equity firms. The study also points out that with functionality and versatility being so important, vendors have responded with stylish clothing for both men and women to go from the gym to the streets: World-famous apparel designer John Varvatos has partnered with legendary sports company Converse to design a line of shoes and clothing in an effort to reinvigorate the retro brand. Actress Scarlett Johansson has lent h er name and input to help design a women's line for Reebok, while actress Eva Longoria recently signed on to be the new face of Bebe Sport . Clothing designer Stella McCartney, daughter of the famous former Beatle, lends her design expertise and her name on everything from yoga gear to ski pants for global sporting goods giant Adidas .

SPORT WEAR EXPORT INCREASE

CUSTOMER SEGMENTATION
Retail Sports segment in Indian is very price sensitive and has been steadily growing over the year. Major part of the demand is met by the unorganised sector and still there is a shortfall of 300 million pairs. Branded shoe market only account for 20% of the entire market. While international brands largely dominate the higher end of the spectrum, the lower end of the market is dominated by home-grown players as well as unorganised players. While men's footwear is the biggest target category (contributing almost 48%), children's (11%) and women's lifestyle footwear (41%) is not behind in the race.

Segment wise classification of price ranges in the mens Sports segments: Segments Price Mass market 185 700 Economy market 700- 1000 Sports market 1000 3000 Premium leathers 3000- 5000 Luxury 10000- 50000 in Rs % of growth 60% (Liberty Bata) 30% (Bata Liberty) 7% (Nike Adidas) 5% (Charles and Keith) 1% (Gucci Louis Vuitton)

Segment wise classification of women Sports wear segment: Segments Price Range s in Rs Traditional footwear 699 999 Designer Footwear 599 799 Formals 299 699 Casual Wear 499 799 Sports Shoes 500- 699 20% % of growth 5% 10% 40% 25%

Popular brand in retail Sports wear

This showroom has average monthly revenue of around Rs. 30 lacs. The breakup of their revenue as per our survey made is like this: 50% from foot wears, 40% from apparels and 10% from accessories. When asked about their USP, we came to know that this brand is known for its comfort level. It focuses a lot on the comfort zone of its customers. This company concentrates on the collection for women and kids as well. So it easily targets all types of people. The prices of its products are higher than other brands like adidas, reebok, etc. But still these companies stand as a competition for nike.

After talking to the store manager we came to know that this showrooms average n monthly revenue is around Rs. 15 lacs. The breakup of the sale is: 25% comes from apparels, 10% from accessories, and 55% from foot wears. So, we see that REEBOK has its main part of revenue from foot wears. When asked about the USP, the manager said that this company uses various technologies in its products which help them creating products according to the need of various people. Till now, it has got 42 different technologies used to produce the items. They consider adidas and nike as their main competitors. The pricing strategy of adidas is almost the same but that of nike is a bit higher. The stocks that they have in their showrooms keep changing every 3 months and they keep bringing in new and fresh stocks. Their target customers mostly include the youth.

ADIDAS The data collected about adidas showroom says that their average monthly revenue is around Rs. 37 lacs. Their revenue break up goes like this: 15% from track pants, 20% from shorts, 20% from collar t-shirts, 20% from t-shirts, 10% from accessories and 15% from others (jackets, pullovers, etc.). They consider nike and reebok as their main competitors. Their main focus while making their products is comfort. They give the most importance to the comfort level of the customers and that also becomes their USP. They have also been providing a very good after sales services to their customers. There is a club called adiclub opened by adidas for its customers. All the customers are made aware of this club and they can join in that club. The customers can provide their feedbacks, suggestions, etc. about their products being a part of that club. This activity also gives them an opportunity to be in regular contact with their customers. Their target customers are of all age group. They do not specifically target a particular age group.

PUMA
This brand is mostly considered as a lifestyle brand. The prices of the products are higher. The average monthly revenue of this particular showroom is Rs. 30 lacs per month. Their revenue break up as per the items for male and female is 65:35. On the other hand the revenue break up as per the items is: 55% foot wear, 35% apparels, and 10% accessories. Their main focus is on status and style. They provide a feeling of high lifestyle to their customers. Their main aim is not to compete with other sports brands. Puma has targeted

customers of every age equally. This was the total study that we made on the retail outlets of various brands. The main aim was achieved as to understand the various strategies that these brands use, their revenue break ups, their USP, etc. This was all about the survey of the outlets

MARKETING STRATEGIES AND COMPETITION ADIDAS Entered India as part of global strategy Adidas decided to enter India as part of the companys global strategy to take direct control of the markets in Asia.The domestic demand was not high when the company started India operations. In the first 9 years, India was the smallest sub-division in Asia, in terms of revenue. The company believed that India had the potential to become a huge market considering Indias large young population and the changing demographics. Currently out of the 13 subsidiaries in Asia, India is ranked number 7 and the management believes it has the potential to climb up to number 3. The merger with Reebok will strengthen adidas in India. In most countries, adidas is significantly bigger than Reebok. However in India, Reebok has a larger share of the market.

SWOT Analysis
STRENGTHS:

Easy availability of low cost of labour. Exposure to export markets. Managements with business background become quality and environment conscious. Presence of qualified leather technologists in the field. Comfortable availability of raw materials and other inputs. Massive institutional support for technical services, designing, manpower development and marketing. Exporter-friendly government policies. Tax incentives on machinery by Government. Well-established linkages with buyers in EU and USA.

WEAKNESSES:

Low level of modernisation and upgradation of technology, and the integration of developed technology is very slow. Low level of labour productivity due to inadequate formal training / unskilled labour. Horizontal growth of tanneries. Less number of organised product manufacturers. Lack of modern finishing facilities for leather. Highly unhygienic environment. Unawareness of international standards by many players as maximum number of leather industries are SMEs. Difficulties in accessing to testing, designing and technical services. Environmental problems. Non availability of quality footwear components Lack of fresh investment in the sector. Uneconomical size of manufacturing units. Competition among units vying for export orders leading to undercutting. Little brand image. Poor labour productivity. Lack of awareness about consistent in plant training and retraining- Inconsistent quality high rejection rate Low machine and material productivity. Lack of quality job work units Delayed deliveries

Weak support infra- structure for exports

OPPORTUNITIES:

Abundant scope to supply finished leather to multinationals setting up shop in India. Growing fashion consciousness globally. Use of information technology and decision support software to help eliminate the length of the production cycle for different products Product diversification - There is lot of scope for diversification into other products, namely, leather garments, goods etc. Growing international and domestic markets. Exposure to newer markets through Fairs/ BSMs Retain customers through quality supplies and timely deliveries Aim to present the customer with new designs, infrastructure, country & company profiles. Use of modern technology Exhibit strengths in manufacturing, for example, strengths in classic shoe manufacturing, hand crafting etc. De-reservation of the footwear sector.

THREATS:

Entry of multinationals in domestic market. Stiff competition from other countries.(The performance of global competitors in leather and leather products indicates that there are at least 5 countries viz, China, Indonesia, Thailand, Vietnam and Brazil, which are more competitive than India.) Non- tariff barriers - Developing countries are resorting to more and more non tariff barriers indirectly. Improving quality to adapt the stricter international standards. Fast changing fashion trends are difficult to adapt for the Indian leather industries. Limited scope for mobilising funds through private placements and public issues, as many businesses are family-owned

THE INDIAN FOOT WEAR RETAIL UNORGANISED SECTOR


India is the country having the most unorganized retail market. Traditionally it was a family's livelihood, with their shop in the front and house at the back, while they run the retail business.More than 99% retailer's function in less than 500 square feet of shopping space. Global retail consultants KSA Technopak have estimated that organized retailing in India is expected to touch Rs 35,000 crore in the year 2005-06. The Indian retail sector is estimated at around Rs 900,000 crore, of which the organized sector accounts for a mere 2 per cent indicating a huge potential market opportunity that is lying in the waiting for the consumer-savvy organized retailer. Purchasing power of Indian urban consumer is growing and branded merchandise in categories like Apparels, Cosmetics, Shoes, Watches, Beverages, Food and even Jewellery, are slowly becoming lifestyle products that are widely accepted by the urban Indian consumer. Indian retailers need to advantage of this growth and aiming to grow, diversify and introduce new formats have to pay more attention to the brand building process. The emphasis here is on retail as a brand rather than retailers selling brands. The focus should be on branding the retail business itself.There is no doubt that the Indian retail scene is booming. A number of large corporate houses Tata's, Raheja's, Piramals's, Goenka's have already made their foray into this arena, with beauty and health stores, supermarkets, self-service music stores, new age book stores, every-day-low-price stores, computers and peripherals stores, office equipment stores and home/building construction stores. Today the organized players have attacked every retail category. The Indian retail scene has witnessed too many players in too short a time, crowding several categories without looking at their core competencies or having a well thought out branding strategy. The growth rate of super market sales has been significant in recent years because greater numbers of higher income Indians prefer to shop at super markets due to higher standards of hygiene and attractive ambience. With growth in income levels, Indians have started spending more on health and beauty products. Here also small, single-outlet retailers dominate the market. In recent years, a few retail chains specialised products have come into the market. Although these retail chains account for only a small share of the total market, their business is expected to grow significantly in the future due to the growing quality consciousness of buyers for these products .Numerous clothing and footwear shops in shopping centres and markets operate all over India. Traditional outlets stock a limited range of cheap and popular items; in contrast, modern clothing and footwear stores have modern products and attractive displays to lure customers. With rapid urbanization, and changing patterns of consumer tastes and preferences, it is unlikely that the traditional outlets will survive the test of time. Despite the large size of this market, very few large and modern retailers have established specialized. There seems to be a considerable potential for the entry or expansion of specialized retail chains in the country. The Indian durable goods sector has seen the entry of a large

number of foreign companies during the post liberalization period. A greater variety of consumer electronic items and household appliances became available to the Indian customer. Intense competition among companies to sell their brands provided a strong impetus to the growth for retailers doing business in this sector. Increasing household incomes due to better economic opportunities have encouraged consumer expenditure on leisure and personal goods in the country. There are specialized retailers for each category of products (books, music products, etc.) in this sector. Another prominent feature of this sector is popularity of franchising agreements between established manufacturers and retailers. A strong impetus to the growth of retail industry is witnessed by economic boom and driver of key trends in urban as well as rural India.

Major challenges in running domestic retail

a) Retail presence: till recently, most companies invested in own stores as the means to
grow and expand. With commercial rents increasing in last few years, capital required for expansions was a bottleneck.

b) Credit Management: Brands that had no local presence, but preferred the thirdparty retail route had to face the challenge of receivables, often the credit period as high as 120 days.

c) Brand: Many of the leather firms are SMEs, have great experience in trading and
vendor management, but completely lack brand building experience. Even when attempts were made, they lacked focus and consistent efforts, thereby diluting the impact.

d) Low IT investment: Except the major leather manufacturers, none of the companies
had an ERP connecting POS data so as to effectively manage inventories. It was not common to have round the year discount offerings to get over the inventories.

Organised footwear market Vs Unorganised footwear market


The average growth in the industry has been estimated at 12% and is estimated to touch Rs 47000 crore by 2025. Presently the Indian organised foot wear market is dominated by mens footwear segment that contributes for nearly 60% of the market where the casual footwear has been better off with two thirds of the share in the mens segment. The unorganised players have the lions share in the ladies and kids segment with 80 percent share. The organised footwear brands have less penetration in the ladies footwear segment mainly due to the complex buying behaviour of Indian women. The ladies and kids segment is one of the fastest growing segments in the branded footwear market and many foreign brands like Catwalk have ceased the opportunity and have set their footprints in this segment which has been untapped by major traditional Indian footwear brands. Considering this many of the Indian footwear brands have seen growing opportunities in the segment to widen their product portfolio, widen their risk appetite and increase their market share in the footwear segment by contributing to newer growing consumer segment which will boost the bottom lines of the retail players. The business models of the footwear retail players have been different with a wide popularity of stores in high streets, malls and new formats such as store in store has been catching up even with international brands having gone the store in store model which has been the most cost effective model in terms of testing the markets.

CONCLUSION
Sportswear has become a big market today with most of the people showing their interest in sports during their leisure or free time. Now-a-days sports apparel scenario has seen a major makeover with new fabrics being introduced that provide better fit, more comfort and are even fashionable. Apart from apparels, even the footwear trend is changing with the new technological advancements. Sports have become so popular recently that sportswear industry has wide range of options for everyone including from kids, college students to men and women. Having sportswear for children may make them feel special and just as important as the adults. Their attire usually consists of many colorful things just to spice up there sports dressing. Sometimes these colorful spiced up dresses may even inspire some of the young kids to get into sports. With over 40% of female fans interested in sports and increasing number of women athletes, it is very important to have right clothing for them. Most of the stores today offer a complete line of women and girls sports apparel or you can even shop on-line. Recently even the men sportswear has seen a major change with the changing trends. Sports wear are improving with the new technologies and they have become lightweight, durable that offer protection to the wearer as well as provide utmost comfort in any type of condition. Sports apparel today is not only designed for function but most garments today also employ designs that make them more fashionable.