FOOTWEAR INDUSTRY OF INDIA-THE PRESENT SCENARIO ,SCOPE AND CHALLENGES

SUBMITTED BY:

ANKITA BISWAS (15)

M.F.M. 2010-12

UNDER THE GUIDANCE OF:

Dr. SOUGATA BANERJEE

OBJECTIVE OF THE STUDY

To hunt for scope of its rise and to explore new means to increase exports.

To implement the footwear industry in India by entering the fields that are still untouched.

RESEARCH METHODOLOGY

The source of information for the research has been secondary data.

Information has been sourced

from books, newspapers and websites.

SCOPE OF THE STUDY If the suggestions are taken care of and

are followed in a proper manner, the footwear industry and the local footwear market of India will be benefitted and will lead to better business prospective.

This report provides extensive research and in-depth analysis on the Indian footwear market. The detailed data and analysis given in the report will help the client to evaluate the leading-edge opportunities critical to the success of the footwear market in India. 

INTRODUCTIONA significant segment of the

leather industry in India. India ranks second among the

footwear producing countries next to China.

Concentrated in the small and cottage industry sectors.

Churning out almost 1736 million pairs of shoes annually.

While leather shoes and uppers are concentrated in large scale units ,the sandals and chappals are produced in the household and cottage sector.

In the case of chappals and sandals ,use of non-leather material is prevalent in the domestic market.

The major production centres of India are Chennai, Ranipet, Ambur in Tamil Nadu, Mumbai in Maharashtra, Kanpur in U.P. ,Jalandhar in Punjab, Agra and Delhi.

THE ESTIMATED ANNUAL FOOTWEAR PRODUCTION CAPACITY REGION-WISE SHARE

REGION LEATHER SHOES

NON LEATHER SHOES

LEATHER SHOE UPPERS

LEATHER SANDALS

NON LEATHER SANDALS

TAMIL NADU 26 5 54 1 0

DELHI & U.P. NORTH

10 77 4 1 60

AGRA, KANPUR

45 0 32 62 0

KOLKATA 12 0 2 3 0BANGALORE 3 3 4 0 0

MUMBAI 4 2 1 32 0OTHERS 0 13 3 1 40TOTAL 100 100 100 100 100

ETHNIC FOOTWEAR OF INDIA

Ethnic footwear is sub-sector of leather products, which includes hand-crafted footwear produced by artisans and traditional families.

The special natures of artisan products have distinctive features, i.e., aesthetic, artistic, creative, culturally attached, decorative, functional, traditional, religiously and socially symbolic and significant. 

But today, ethnic footwear industry in India is in a quite miserable state.

INDIAN STATE ETHNIC FOOTWEAR NAME

Gujrat Bharwadi Desi Joda

Rajasthan Mojari

Karnataka/ Maharashtra Kolhapuri

Punjab/ Haryana Jooti

Himanchal Pradesh (HP) Phulla

Ladakh/ Leh Pabu Shoe

Uttaranchal/ Uttarakhand Lumba/ Mocha

MAJOR PLAYERS

Shoes manufactured in India wear brand names like Florsheim, Gabor, Clarks, Salamander and St. Micheals.

Reebok, Adidas, Nike and Skechers. Planet Sports.

Puma, Speedo, Converse and Wilson. The sportswear market is the only

sector in India that has the presence of all three top international brands.

EFFECT ON INDIAN BRANDS In the face of increasing competition

from leading multinational players, domestic footwear retailers have also woken up to the opportunity that the segment beckons and are realizing that exposure to shopping standards abroad have made Indian consumers demand the same formats and experience here.

Major domestic players like Bata and Liberty and are positioning themselves as vibrant and contemporary Indian brands.

EXPORT

India’s export of leather footwear touched US$ 331 million in 2008-09, recording an increase of 4.01% over the preceding year.

The major markets for Indian leather footwear are the U.K., the U.S.A. ,Germany, Italy, France and Russia.

Nearly 71% of India’s export of leather footwear is to Germany, the U.S.A., the U.K. and Italy.

INDIA’S FOOTWEAR EXPORT GROWTH OVER THE LAST FOUR DECADES 

PROBBLEMS FACED BY THE ETHNIC FOOTWEAR OF INDIA

Lack of standardization, product deficiencies, lack of innovative and improved designs, competition from organized and cheap footwear producing firms, lack of proper marketing channels.

Change of profession by the artisans is too a major cause.

SEGMENTATION

PEST ANALYSIS Recent merger between Adidas and Reebok. Marginal share of 2.44 percent in global trade

worth US$ 97.606 billion. ‡ Estimated target of 12 bn $ (7bn $ export +

5 bn $ domestic) trade by the year 2012 overseas economies and

trends. Life style trends- upward shift Competing technology development

POSITIONING

The global footwear market is estimated to be worth $192.3 bn in 2008, a growth of 2% over the 2007 value.

The Indian footwear industry is estimated to be worth just INR 160 bn or $4 bn

It is the second largest global producer of footwear after China, accounting for more than 14 % of global footwear production of 14.52 bn pairs.

0.08% luxury

3.5% premium non leather

7.3% premium leather

9.6% active sports

26.5%

mass market

53%

mid economy

TARGET CUSTOMERS

With all the major and minor brands selling in the local market, the industry caters to the needs of the widest range of customers from the lower in come group to the luxury seekers.

SWOT ANALYSIS Opportunities Rising potential in the domestic market Growing fashion consciousness globally Use of information technology and decision

support software to help eliminate the length of the production cycle for different products

Use of e-commerce in direct marketing De-reservation of the footwear sector,

growing use of modern technology, exhibits strengths in manufacturing, eg. Strength in classic shoe manufacturing

Strengths High Growth Ready availability of highly skilled and cheap

manpower Large raw material base Policy initiatives taken by the Government Capability to assimilate new technologies and

handle large projects Continuous emphasis on product development

and design upgradation Existence of more than sufficient productive

capacity in tanning, easy availability to export market, export friendly government policies, well established linkage with buyers inEU and USA

 

Weaknesses Lack of warehousing support from the

government International price fluctuation Huge labour force resulting in high labour

charges Lack of strong presence in the global fashion

market Unawareness of international standards by

many players

Threats Major part of the industry is unorganised Limited scope for mobilising funds through

private placements and public issues (many businesses are family-owned)

Difficulty in obtaining bank loans resulting in high cost of private borrowing

Stricter international standards High competition from East European

countries and other Asian countries Lack of communication facilities and skills

ROLE OF THE FOOTWEAR INDUSTRY IN THE INDIAN ECONOMY

Apart from a significant foreign exchange earner, leather industry has tremendous potential for employment generation. Direct and indirect employment of the industry is around 2 million. The skilled and semi-skilled workers constitute nearly 50% of the total work force.

Full Shoe:1,75,000 Shoe Uppers:75,000 Chappals & Sandals:4,50,000

CHALLENGES FACED BY THE INDIAN FOOTWEAR INDUSTRY

Varying levels of technology in the factories depends on the size of the factories.

Low quality of shoes ,threat of shift in production to other areas or countries where wages level are low if the quality is maintained at same level.

Component selection and methods of production are given by the buyers and manufacturers do not provide their own fashion collections.

GOVERNMENT POLICIES IN SUPPORT OF THE INDUSTRY

The entire leather sector is now de-licensed and de-reserved .

100% foreign direct investment and joint ventures permitted through the automatic route.

Funding support for establishing design studios.

Duty free import of raw materials and of embellishments and components under specific scheme.

Concessional duty on import of specific machinery for use in leather sector.

FUTURE STRATEGY OF STUDY Visit to major footwear industries of

kolkata. Interaction with the workers engaged

in the footwear industry.

CONCLUSION The Indian footwear market is set to

experience the phenomenal growth in coming years. The study will help to realise it.

As footwear retailing in India remain focused on men’s shoes, there exists a plethora of opportunities in the exclusive ladies and kid’s footwear segment with no organised retailing chain having a national prance in either of these categories. This study will help to explore these opportunities.

REFERENCESwww.footwear-industry.comwww.indianshoebazaar.comwww.researchandmarkets.comwww.trademart.in From Fibre to Fabric IILF 09 Happenings Indian Footwear Industry – A Vision Document 2010 National Highways Authority of India IMAGES F&R Research, INDIA RETAIL REPORT 2007 Images report on Indian Footwear industry 2007-08 www.marketsmonitor.com www.highbeam.com www.fibre2fashion.com www.businessworld.in www.indiaretailing.com www.leatherindia.org www.business-standard.com www.catwalk.co.in

THANK

YOU