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Customer Segments

The domestic footwear market is estimated to be more than Rs. 15, 000 crores and is expected to reach Rs. 20,000 crores by 2015 . The average growth in the industry has been estimated at 12 percent and is estimated to touch Rs 47,000 crore by 2025.. The category covers casual, formal, semi-formal and sports shoes along with sandals for men and women. Men’s segment accounts for 59 per cent of the market, while women’s segment contributes 41 per cent. The domestic market is substantially price driven, with branded footwear constituting less than 42 percent of the total market size.

About 37. 8 percent of Footwear retail is the organized segment and is expected to reach 25-30 per cent by 2015. This qualifies it as the second most organized retail category in India, next only to Watches. Exclusive-brand outlets account for over 50 per cent of the footwear market followed by multi-brand outlets at 28 per cent. The preference for branded products is on the rise with a growing consumer preference to shop from organised retail locations like malls/large format stores.

While the average spend on the footwear by urban consumers is Rs 240/annum, consumers in rural areas spend just about Rs

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100/annum. The annual domestic consumption of footwear is approximately 1. 1 billion pairs per annum, and top 20 cities contribute about 450 Million pairs/annum. Key brands in India are Bata, Liberty, Clarks, Woodland, Khadims, Metro, Red Tape, The Loft, M&B Footwear, Da Milano, Timberland, Puma, Nike, Adidas, Reebok, M&B, Rockport, Provogue, Lee Cooper, Converse, Nine West, Aldo, Relaxo etc.

Retail footwear 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. 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.

The ladies and kids segment is one of the fastest growing segments in the branded footwear market and many foreign brands have seized 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 the growing opportunities in this segment to widen their product portfolio, enhance 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 which has been catching up even with the international brands who have adopted this model as the most cost effective model in terms of testing the domestic markets.

The success mantras for footwear market in India lies in the advantages offered by the country, such as low labour cost, skilled working professionals, etc. Footwear industry in the country ranked second across the globe after China in terms of production. Additionally, it is the main growth driver of the overall leather exports from the country, with majority of the share acquired by footwear components and leather & non-leather footwear.

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