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Footwear Market
Premium footwear market is fast gaining popularity in the Indian market. Earlier, bags were
the entry points for aspirational consumers in
India buying luxury brands. However, this trend
is fast changing and consumers are shifting
towards buying premium footwear.
With growing fashion consciousness among
Indias urban middle class coupled with large
number of foreign brands introducing new designs and cults, shoes are fast becoming a very
important accessory among the elite class.
774
594.6
472.4
376
300
240
2011-12e
2012-13e*
2013-14e
2014-15f
2015-16f
2016-17f
Source: Assocham
The premium footwear market in India was estimated at INR 300 Crore in 2012-13 and is expected
to reach INR 774 Crore by 2016-17, growing at a
CAGR of around 26.7% during 2012-13 to 2016-17.
With the factors like increasing disposable income
among urban middle-class, inclination towards procuring branded products and efforts on the part of
luxury shoes manufacturers to introduce Indianisation in designs of the global luxury brands & expand
in the market, the premium footwear market is
expected to witness a growth of around 30% annually in the coming years.
40.0%
60.0%
1.02
0.75
0.56
0.41
0.31
2014-15f
2015-16f
2016-17f
Source: RNCOS
Tata International has teamed up with Wolverine Brands of the US to enable the US
manufacturer build base in the Indian market. The JV company plans to kick off with a
chain of stores of CAT shoes, to be followed by a dozen other Wolverine brands.
Woodland, owned by the Aero Group, is looking to re-position its sub-brand Woods in
the luxury footwear segment, focusing primarily on womens footwear. Nearly 60% of its
offerings will be for women.
Challenges
International Brands Facing Problem of Getting Adequate Distribution
Many international brands are facing distribution issues, which may have direct effect on the
Indian footwear industry revenues. For instance, recent entrant Skechers of the US is in 200
multi-brand outlets, but is waiting for FIPB clearance to open stores of its own.
Latest Developments
Over the past few years, many premium brands have entered or have plans to enter into the Indian
market through various routes.
May 2013: High-end and super-expensive Italian shoemakers are looking at India as a replacement
for their production base in Europe, increasingly a high-cost location for them. These brand manufacturers are also scouting for local partners. Some of these are leading brands such as Baldinini, LORIBLU,
Giovanni Fabiani, NeroGiardini, Janet & Janet, FABI and Fratesi. They are looking at more and more joint
ventures and collaborations with Indian producers because Indian industry gives them the volume that
these companies are looking for.
Source: Business Standard
April 2013: Premium Italian footwear brand Geox has entered into a retail and distribution arrangement with Delhi-based G&B Footcorp to set up its mono brand stores. G&B Footcorp has set up three
stores and plans to add two more stores in the current fiscal year. It also plans to have at least 20 stores
in next three years.
Source: The Hindu Business Line
May 2013: Woodland, owned by the Aero Group, is looking to re-position its sub-brand Woods in
the luxury footwear segment and is planning to invest about INR 60 Crore to unveil a string of 30 small
boutique stores in high-end shopping malls across the country in this financial year.
Source: Yahoo Finance
May 2013: Ruosh which is in the mens premium footwear space is planning to take its store count to
20 in 2013. The brand currently has eight stores across Bangalore, Mumbai, Chennai and New Delhi.
Source: FashionUnited
January 2013: C&J Clarks International has plans to expand the number of standalone stores in India
to 100 in the next 5 years.
Source: Franchise Mart
Future Outlook
Global premium footwear brands are queuing up for an entry into the Indian market. These brands are
more than enthusiastic with the approval of 100% FDI in single brand retail. This category will be seeing
lot of action in the coming days with several brands entering the market. Some of them have been relying on licensing or franchising, while other have formed partnership with leading business houses.
Brands like Steve Madden, Timberland and Kenneth Cole have partnered with Reliance, Wolverine with
Tata, and Clarks with Future Group. The brands that are doing the groundwork to enter the market
include French brand Mephisto and the US sports shoe brand Airwalk.
The share of premium footwear is expected to increase in India in the coming years, with premium
footwear players looking for setting up base in markets having potential for growth, to beat the losses
in stagnant markets like Europe. Having a distribution partner or a franchisee in the initial years will help
the brand to set up a base in the market. But once they understand the market, they may also opt for
retailing on their own. The brands can also meet the sourcing clause by sourcing footwear fully or in
parts from the Indian markets.
Moreover, the number of ultra high net worth households in India is expected to increase from 1,00,900
units in 2012-13 to 3,29,000 units in 2017-18, with their net worth increasing from 86,00,000 Crore in
2012-13 to 380,00,000 Crore in 2017-18 . This, will give a boost to the total spending on luxury items
like footwear in the Indian market.
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