Footwear industry takes a brisk walk

Footwear industry in India constitutes a significant segment of the Indian leather industry. It is the second largest footwear producer in the world with a turnover of Rs 8,500-9500 crore and is increasingly dominated by men’s footwear. The industry is expected to grow at a Compound Annual Growth Rate (CAGR) of 20 per cent in the coming years.

The footwear industry has transformed from being a highly unorganised market to an emerging organised retail industry. Earlier people used to get their footwear made from local footwear manufacturers by placing orders or they used to buy them from local shopkeepers. However the trend has completely changed today with the increase in urban population, changing lifestyle and rising brand consciousness, and transformation in the buying potential of the Indians. The increased brand consciousness has given way to large number of international footwear brands entering into the Indian market. Majority of the brands are entering into India via franchise route thus providing a plenty of franchise opportunities for aspiring entrepreneurs. Moreover Indian footwear brands are also opting for the franchise route to expand their businesses.

Emerging footwear franchising

Earlier Indian footwear industry was dominated by Bata and Liberty, however today global brands like Nike, Reebok, Lee Cooper and adidas have marked their presence felt in the Indian footwear industry. The international brands including adidas, Reebok, Woodland, Lee Cooper, Puma, Staccato (brought by Pavers England via franchise route) have also entered India through the franchise tie-ups.

As per Rafique Malik, Chairman and Managing Director, Metro Shoes, “Due to early entry of Bata in India, footwear is one of the most organised retail sectors and there is a lot awareness of branded footwear.  There are a lot of foreign brands who are beginning to look at India as an important market and are entering the country with stand alone stores. Organised manufacturers of footwear are also looking at the domestic footwear industry besides exports as a growing opportunity. In view of all these factors, I see a bright future for the growth of footwear franchises in India.”

Highlighting adidas’s mission, Andreas Gellner, Managing Director, adidas India says, “adidas has a mission to be the leading sports brand in the world. To accomplish this mission, adidas meets the needs of distinct groups of sport-oriented consumers. Our product and marketing initiatives primarily focus on key sports categories and on the sports lifestyle market. Our prospective partners can look forward to working with a globally renowned sports brand that has a strong long term commitment to the Indian consumers and market. adidas offers a predetermined margin to the partners, who retail from adidas’ exclusive stores. These stores are designed as per adidas’ global retail guidelines and provide high visibility. The brand offers advice and assistance to its franchisees on every facet of retail operations. All new franchisees are provided with a detailed return on investment.”

Eligibility to own the franchise

The prospective franchisee is expected to qualify following eligibility criteria:

• Willingness to invest time and money
• The franchisee should possess a long-term vision and business plan, as well as a structure and team for execution of agreed plans
• The partner should possesses the passion for performance and the determination to lead
• High degree of flexibility and proactiveness
• Good location, knowledge of the footwear industry

Challenges of footwear franchising

It has been seen that retail formats give preference to their company managed EBO's rather than franchisees. Hence, the key challenge for franchisees is to get their share in terms of merchandise, marketing etc.

Also footwear business involves storing a large inventory of products keeping in mind varying consumer preferences, variety due to fast evolving fashion trends and the sizes. Therefore, there is a requirement of large working capital and extra effort to mange the logistics.

Location matters

Footwear franchises can be placed in both large cities and small towns. Malls and strip shopping centers are ideal to take full advantage of high traffic areas. And street front locations offer a convenient destination for pedestrians, tourists or vacationers.