 "V Muthukumaran, CEO, Bachi Shoes, a subsidiary of Tata International, has launched a new line of footwear")
Chennai-based Bachi Shoes, in which Tata International holds 76 per cent equity stake, launched FeetScience on Wednesday, shoes meant exclusively for the domestic market. This is the second brand from the Bachi Shoes stable in the last five years; the company is among the country’s largest suppliers of footwear to some of the world’s biggest brands such as Clarks, Elefanten, Kickers, Stone and Bones and others. Priced between Rs 800 to Rs 3,000, the FeetScience line of shoes will be retailed online and compete with international labels such as Nike, Adidas, Skechers and others.
In 2010, Bachi Shoes had launched another brand, Language, both as a luxury footwear brand and a flagship retail store in Chennai. The newly launched FeetScience however, will be marketed mostly through online marketplaces. For this the company is borrowing a leaf out its parent company’s copybook. Tata International holds the license for Aerosoles, an international footwear brand, which it launched in India in November 2014. It currently sells on e-commerce platforms and select retail outlets. Bachi Shoes plans to do the same with FeetScience, hoping to reach out to shoe buyers across the country.
The company that logged in sales of around Rs 258 crore in 2014-15 and is planning to close the current fiscal with revenues of around Rs 300 crore, says it will invest in four new lines of production. It says that it is investing close to Rs 40 crore in capacity building initiatives across its plants in Tamil Nadu and Andhra Pradesh.
Bachi Shoes is hoping to gain a foothold in the 2.1 billion-strong Indian footwear market, as estimated by research firm, ICRA. Shoes are big business in India. The country comes in third after China and the US in shoe sales. However per capita consumption figures are still low. For India it is 1.66 a year while the global average is 3 and it is 6 a year, for developed countries. Companies spot a huge scope for growth and Bachi Shoes too is banking on that.
V Muthukumaran, chief executive officer, Bachi Shoes Ltd, said that the company has set a target of growing around 15-20 per cent in the next three years. While exports will continue to be the dominant contributor to the company’s bottomline, he hopes domestic brands will play a significant part in future growth too.
According to the report by ICRA, India is the second largest global producer of footwear after China, accounting for 9 per cent of the global annual production. The bulk of its production is consumed at home. The report says, “India annually produces close to 2.1 billion pairs of shoes of which, about 90 per cent are consumed internally while remaining are exported primarily to European nations.”
Muthukumaran says that at present exports account for around 99 per cent of the company’s sales revenues. The biggest buyers for Bachi Shoes are in Europe, especially in the UK. The company over the next five years wants the domestic market to contribute at least 20 per cent of its total sales.
In value terms, the ICRA report says, the Indian footwear sector is estimated at Rs 50,000 crore, the domestic market accounts for Rs 32,000 crore while exports make up the rest with Rs 18,000 crore. The large domestic base and the potential it holds out are akin to magnets for global brands. And several, such as Charles Allen & Keith, Skechers and others, have been drawn into the country to set up retail outlets in recent years. Plus there are many brands that have thrown in their lot with the rapidly growing and bustling online marketplaces.
However, marketing shoes online is a tough task. For one, customers prefer to walk in a shoe before making a purchase and secondly, shoe sizes vary according to styles and brands. Getting customers to report the right size can be quite a challenge.
Muthukumaran says that marketing would be one of the big challenges for the brand, but he is confident that the Tata name backing the brand will help. Customers looking for quality and comfort, he believes will pick them up and keep coming back for seconds. For first timers, there is always the reassurance of the brand being backed by the Tatas.
Apart from being available online, the brand will be sold directly to schools and other relevant institutions. FeetScience emphasises three core attributes– Scientific, Energetic and Empathetic, said Muthukumaran. He added that the target is to sell at least 500,000 pairs per year in three years, while as a company the target is to grow at around 15-20 per cent. The company says that it currently has the capacity to produce 10,000 pairs of shoes a day. This will go up to around 16,000-17,000 pairs a day.
Founded in 1974 by former Parliamentarian, P S Rajagopal Naidu, Bachi Shoes began life as a tannery, manufacturing and exporting finished leather. It was only as recently as 2002 that the company got into shoe manufacturing and started supplying to global labels. Over the next decade or so, the brand wants to reinvent itself one more time, from being a supplier to the premium labels to creating one of its own. Now, those are big shoes to fill in.
