Rise Of Casual Wear & Tier 2 Customers Shaping The Future Of Footwear Industry

The economic think tank Global Trade Research Initiative says, currently valued at $26 billion, the Indian footwear industry is expected to reach $90 billion by 2030. This growth will be characterized by two main changes - a significant increase in the demand for non-leather footwear (like sports shoes, running shoes, casual wear, and sneakers) in India, rising from 25 per cent to 75 per cent of the market share by 2030; and a shift in leather shoe production from small-scale, cottage industries to large corporates.

What’s driving the growth for footwear franchises and its partners?

• The ‘fashion meets comfort’ youth mantra

The first significant shift to casual wear is being driven by the country’s young generation. Choosing comfort, vibrant colours, trendy styles over the leather footwear seems to be the mantra for the youth, that swears by the ‘fashion meets comfort’ style statement.

“The current trend is that of casual wear and it will continue. We see a greater drift away from leather footwear market. With the changing lifestyles there is trend towards premiumization of the products and styles are getting better value which in turn projects a growth in the industry. There is a sense of consumer centric introduction and we have seen a lot of research being done by our merchandising team across the nation to ensure better products and styles that the consumers are living by now. The fashion is more towards the casual wear and you can see the youth driving the casual fashion”, observes Anupam Bansal, Director, Liberty.

A name to reckon with in the Indian footwear industry, Liberty started out more than 60 years ago as a small shoe manufacturing unit in Karnal, Haryana, manufacturing a humble 4 pairs a day. Today, the company stands tall, manufacturing 50,000+ pairs a day and being one of the leading manufacturers in the leather footwear industry in India. The company boasts of ten brands in its kitty with 400+ exclusive showrooms in the country and a presence in more than 25 countries across the globe.

“Footwear used to be viewed as something functional and consequently an average Indian owns only 1.5-2 pairs of footwear. Whereas someone in a developed country owns 20-30. But this is fast changing. Shoes are a fashion statement now. Younger Indians want multiple pairs, each for a different occasion. This is major shift for the industry and a massive growth opportunity”, adds Sandip Baksi, COO of AstorMueller in India. “In fact, fashion sneakers and pairing them with ethnic wear is a trend that has taken the market by storm. For ladies, platforms and peep-toes are in season right now. Also, the growing emphasis on comfort is a trend that is here to stay,” adds Baksi.

AstorMueller is one of Europe’s leading shoe-making companies, renowned for generations of shoe-making expertise, deep production know-how, design and tech development, and global production capabilities. With origins that date back to 1928, Schwelm, Germany, today AstorMueller has a transcontinental presence with offices in Switzerland, Romania and India. A multi-brand retailer, AstorMueller Group, with all its brands combined, sells nearly 7 million pairs of shoes annually in over 40 countries.

• The rise of smaller towns

The rise of tier II and tier III markets in the recent years is also fuelling the Indian footwear industry’s growth story. With internet and social media influencing the fashion choices and sensibilities, and e-commerce and quick commerce giants ready to fulfil all fashion desires of India’s interiors, there is high demand for latest and trendy styles and a huge customer base that’s waiting to be tapped in. Recognizing this demand, the footwear industry is now training all its guns on satiating this hunger. “We are on the path of growth with new technology introductions and also expanding our reach in the tier II and tier III towns in the coming financial year. The tier II and tier III markets are developing very quickly and we are noticing a new energy in the channel partners with our new product introductions as well. We are getting very positive feedback,” quips Anupam Bansal, Director, Liberty. 

• Bettering technologies

“Technology is the single most important attribute working in healthy management (especially partner and franchisee management) and administration and so, ensuring smooth operations and overall growth and expansion with ease. All our partners and franchisees are connected through our SAP system as far as availability and requirement of products is concerned. These are monitored with the ticking clock and any team can raise a red flag to even the highest level in the organization. Also, advancement in technology has ensured that there are no usual worries of stock management as everything is now computerized. All the billings are on the SAP system, so updates of any credits pending at the regional or head office level are systematically addressed,” points out Anupam Bansal, Director, Liberty.

“We use some of the most advanced retail POS software to ensure that there is smooth data flow from the front end to the back end. Further, in order to ensure enhanced customer experience, we are working to launch the endless-aisle in our stores very soon. Our technology backed, innovative and extensive marketing campaigns across both traditional and digital mediums help increase the brand visibility and top of the mind recall,” adds Sandip Baksi, COO of AstorMueller in India.

Charting the trajectory ahead

According to a recent GTRI report published in Jan 2024, India is the second-largest global producer of footwear after China, contributing 13% to worldwide production and holding a 2.2% share in global exports. However, India is only the 9th largest global footwear exporter. China, with exports of $62 billion tops the chart. It is followed by Vietnam ($22 billion), Italy ($15.2 billion), Germany ($10.3 billion), Indonesia ($7.4 billion), France ($5.7 billion), the Netherlands ($4.6 billion), Spain ($3.4 billion) and India ($3 billion).

India has a smaller presence in the non-leather category, with non-leather shoes making up only 19.3 per cent of its footwear exports. In contrast, China has a majority 79.7 per cent share. Suggesting actionable measures for the sector, the report said that India should support local production by domestic firms and MNCs and 'stop imports' of finished shoes.

Today many brands sell make in China or Vietnam shoes in India. Few others do part manufacturing In India and import the premium shoes. India should support firms to make shoes locally by removing policy and logistics impediments.

“The biggest challenge the entire industry faces today is the implementation of the BIS norms. Several categories like sneakers whose production was largely based in China has to be shifted to India from this year. But we were among the first few European shoemakers to recognize India’s capability in shoemaking and consequently established a strong manufacturing base here since early 2000s with a Make in India, Sell in Europe model. Currently, India is where majority of our products are made accounting for over fifty percent of our global sourcing and growing. We consider India to be one of the most important markets for this decade and have already introduced three brands from our global portfolio (bugatti, TT.BAGATT, nu:beat). We have plans of introducing Salamander in the near future”, says Sandip Baksi, COO of AstorMueller in India.

The companies are recognizing the new government policies that are providing fresh impetus to the industry and are overall optimistic about the Indian footwear industry’s growth story. “A major factor that is shaping the industry’s future is the strong governmental push for ‘Make in India’. This will improve the quality perceptions of the products Made in India and significantly advance the footwear exports”, adds Baksi.

It is noteworthy that Taiwanese firms, such as Feng Tay, Hong Fu, Dean Shoes, Oasis Footwear, Sports Gear, and Zucca, are planning to set up operations in India. States like Haryana, Uttar Pradesh, Andhra Pradesh, Telangana, and Karnataka could become the important nodal centres for footwear manufacturing if they assign higher importance to footwear manufacturing investments in their investment promotion outreach. Taiwanese contract manufacturers dominate the global footwear manufacturing industry and make shoe brands like Nike, Adidas, and Puma.

“With the positive new initiatives of the Government of India, the industry is poised to grow in the years ahead”, concludes Anupam Bansal, Director, Liberty.