1.

Introduction
1.1 Overview
The Indian Footwear Industry is gearing up to leverage its strengths towards maximizing
benefits. Strength of India in the footwear sector originates from its command on reliable supply
of resources in the form of raw hides and skins, uality finished leather, large installed capacities
for production of finished leather ! footwear, large human capital with expertise and technology
base, skilled manpower and relatively low cost labor, proven strength to produce footwear for
global brand leaders and acuired technology competence, particularly for mid and high priced
footwear segments. "esource strength of India in the form of materials and skilled manpower is a
comparative advantage for the country.
#eather footwear in India are dress shoes, casuals, moccasins, sport shoes, horrachies, sandals,
ballerinas, boots. $on%leather footwear in India is Shoes, Sandals and &happals made of rubber,
plastic, '.(.&. and other materials. )ith changing lifestyles and increasing affluence, domestic
demand for footwear is pro*ected to grow at a faster rate than has been seen. There are already
many new domestic brands of footwear and many foreign brands such as $ike, +didas, 'uma,
"eebok, Florsheim, "ockport, etc. have also been able to enter the market.
The footwear sector has matured from the level of manual footwear manufacturing methods to
automated footwear manufacturing systems. ,any units are euipped with In%house -esign
Studios incorporating state%of%the%art &+- systems having .- Shoe -esign packages that are
intuitive and easy to use. ,any Indian footwear factories have also acuired the IS/ 0111, IS/
23111 as well as the S+ 4111 certifications. 5xcellent facilities for 'hysical and &hemical
testing exist with the laboratories having tie%ups with leading international agencies like S+T"+,
67 and 'FI, 8ermany.
2
/ne of the ma*or factors for success in niche international fashion markets is the ability to cater
them with the latest designs, and in accordance with the latest trends. India, has gained
international prominence in the area of &olors ! #eather Texture forecasting through its
outstanding success in ,/-56"/'. -esign and "etail information is regularly made available
to footwear manufacturers to help them suitably address the season9s reuirement.
The Indian market for footwear includes all producers of non%cleated, rubber and plastic
footwear designed in style or for use. The industry is a collection of smaller, segmented, yet
often overlapping markets, defined by both the price and the purpose of the shoes.
For instance, there are mini%markets for shoes designed for each of many sports and other
purposes: basketball, running, walking, tennis, and casual wear. The greatest overlap between
these categories is between performance shoes and casual wear. Therefore, there is some degree
of overlap between most segments. The industry is dominated by a few large firms, while the
ma*ority of other players have less than ;< market share.
These firms fight for market share through non%price competition, on strategies such as
strengthening brand image and increasing product proliferation. The success of each firm is
greatly dependent upon its marketing campaigns. The brand image of the ma*or firms is created
by extensive marketing campaigns and celebrity endorsements. &onsumers associate themselves
with a particular brand and tend to stick with the brand with which they are comfortable. 5ntry to
the industry is difficult as brand loyalties are high.
Standing on the threshold of a retail revolution and witnessing a fast changing retail landscape,
the Indian footwear market is set to experience the phenomenal growth in coming years. In past
few years too, the market has seen robust growth, says =Indian Footwear Industry +nalysis>
report. 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.
The forecasts and estimations given in this report are not based on a complex economic model,
but are intended as a rough guide to the direction in which the market is likely to move. This
forecast is based on a correlation between past market growth and growth of base drivers.
?
1.2 History of Footwear
Footwear is estimated to have started its long history of human use during the Ice +ge some ;
million years ago. 6nkind weather conditions are said to have created the necessity for footwear.
/ther evidences show that footwear came to use at the end of the 'aleolithic 'eriod, at about the
same time the early humans learned the art of leather tanning. 5arly pieces of footwear were made
of wrappings, usually made of leather or dried grasses. #ater on pieces were developed from an
oval piece of leather which is bound by a piece of strong leather thongs. Sandals, which are the
first crafted footwear, are the successors to these wrappings.
In 5gyptian funeral chambers, paintings show the different stages in the preparation of leather and
footwear. The images also show that in 5gypt, footwear depicted power and class. The 'haraohs@
sandals were distinguished by the turned up toes, a characteristic which is missing in the
commoners@ footwear. 5gyptian sandals were crafted using straw, papyrus, or palm fiber. #ater
on, 5gyptian women adorned their footwear with precious stones and *ewels.
,aterial evidences showed that the 8reeks loved and took good care of their feet by using
different footwear for different activities. 8reek women began wearing sandals to signify their
social class. Their footwear signified beauty, elegance, refinement, and extravagance. It has been
said that 8reek women of bad reputation attracted men by wearing elevated sandals. These
sandals create a =clacking> sound when the wearer moves, and this sound was considered as a
symbolic flaunting of sexual charms. In ,esopotamia, leather wrappings are tied to the feet by a
strip of the same material.
"omans, on the other hand, created durable leather thongs so their legions can travel to places on
foot. It is also believed that foot fetishes began with the "omans when Senator #ucius (itellus
freuently kissed the shoe of his mistress which was hidden in his tunic. In "ome, footwear also
exhibited social class. The consuls wore white shoes, the senators wore brown shoes, and the
uniform footwear for the rest of the region was a short pair of boots that uncovered the toes.
.
Aut in all of these early civilizations, footwear indicated social status. Footwear consists of
garments that are worn over the feet. They are worn mainly for protection and hygiene, but also
for fashion and adornment. Footwear items come from a wide range of materials including
leather, rubber, canvass, wood, and plastic. Aut early pieces were made from available materials
like straw, leather, cowhide, and grasses. )hen footwear is assembled, the main components are
adhesives, cushion, counter fort, heel, hook, insole, laces, sole, steel shank, tack, toe puff, tread,
and welt. 8enerally, footwear is classified into: boots, industrial footwear, shoes, and sandals.
Aoots are available as cowboy boots, galoshes, ski boots, thigh length boots, and so on. Industrial
footwear includes plastic boots and rubber loafers which are used in laboratories, construction
sites, and production lines.
Shoes include athletic shoes Bor running shoesC, climbing shoes, clogs, high heels, mary *anes,
moccasins, mules, loafers, tap shoes, and cross%training
shoes. Sandals, on the other hand, include espadrilles,
flipflops or thongs, slide%ons, and slippers.
Footwear is considered an extension of one@s personality.
)ell%maintained footwear says things about the owner,
with cleanliness as the most important concern. +lthough
the intricacy of this craft may have been
#ost to modernization, their influences are still present in shoes today. The moccasins worn in
early times by people in cold countries are still being worn there, while the sandal patterned after
the 5gyptians@ creation is still freuently used in hotter countries.
3
Production Technology:
The production of the industry starts with +gro Industries and progresses through the chemical
industry and tanning to manufacturing. #eather is a by%product of the food industry. It is a
commodity and as such is sub*ect to market forces in a similar way to tea, sugar, coffee, etc.
;
2. Indian Footwear Industry
2.1 Regional Segentation
i) 8eographic: B &ity or "ural areasC
&ompanies focus more on metro cities because people believe in trying innovative, new and
better products. In different regions different people have different preferences for the type of
footwear. 6rban people go for more stylish footwear than rural people. "ural people concentrate
on durability rather than giving preference to style and look.
ii) -emographic:
8ender: ,ale sector of footwear industry have limited categories like shoes, chappals and
sandals. Footwear is chosen according to their freuency of usage. Female sector includes variety
of range as it is the most fashion oriented sector.
+ge: (arious age groups are targeted by the industry. Footwear is the product that each and every
individual will use till its lifetime.
Income: Dere industry needs to find out that how much expenses are incurred by the people
regarding their footwear. (arious range of footwear is available targeting every income group.
iii) 'sychographic:
It depend on the reuirement of the consumer that which particular segment they need to
approach for the products available in the market by the different players. 5g: + 'rofessional goes
for purchasing for Formal Shoes, Student goes for &asual Footwear.
E
2.2 !ar"et Perforance and #$%orts
$early F;< of India@s 5xport of Footwear is to the 5uropean &ountries and the 6S+. The Indian
Footwear Industry provides employment opportunities to a total of 2.2 million people, mostly
from the weaker sections of the society. /ut of this, about 1.? million are employed in the
organized sector, 31< of who are women. "emaining 1.0 million people are engaged in
unorganized footwear sector like rural artisans, cottage and household units etc.
The Footwear Sector is now de%licensed and de%reserved, paving the way for expansion of
capacities on modern lines with state%of%the%art machinery. To further assist this process, the
8overnment has permitted 211< Foreign -irect Investment through the automatic route for the
Footwear Sector.

I&'I( )S FOOT*#(R #+PORT ,RO*TH O-#R TH# .(ST FO/R '#0('#S
F
Footwear export has increased from 6SG31.2; million in 20FF%F4 to 6SG 23F;.4. million in
?11F%14
0H(RT SHO*I&, ,.O1(. I!PORT OF FOOT*#(R -S I&'I( )S #+PORT OF
FOOT*#(R
India)s #$%orts of Footwear 2 0ountry3wise Share in Total #$%orts 425563578 2 Source:
',0I9 S
4
Indian Footwear Industry in a &utshell: %
% Second largest footwear producer after &hina
% ?.1E billion pairs produced in an year
% 2E < of the global production is produced in India
% &ontract manufacturers supply to leading global brands
% E33 ,ember produces situated as clusters at &hennai, +mbur, "anipet, 7anpur, +gra, ,umbai,
-elhi and 7arnal.
:. ;ey Players of the Industries.
:.1 'oestic Players:
0
1ata:3
Aata India is the largest company for the Aata Shoe /rganization in terms of sales pairs and the
second largest in terms of revenues. )ith 2?;1 stores across the country, it also has the widest
retail network within the AS/.
Ay the time Aata had come to India in 20.2, it was already recognized as a leading shoe brand.
Its manufacturing and marketing operations heralded the rise and the development of a modern
footwear industry in India. Aefore Aata, footwear was produced primarily in the handicrafts and
small enterprise segments. Aata, over the decades, used the Hcurrent knowledge9 from its
international experience to create adaptive and innovative baseline standards for the shoe
businesses in India.
Incorporated as Aata Shoe &ompany 'rivate #imited in 20.2, the company was set up initially as
a small operation in 7onnagar Bnear &alcuttaC in 20.?. In Ianuary 20.3, the foundation stone for
the first building of Aata9s operation % now called the Aata. In the years that followed, the overall
site was doubled in area. This township is popularly known as Aatanagar. It was also the first
manufacturing facility in the Indian shoe industry to receive the IS/: 0112 certification.
The &ompany went public in 20F. when it changed its name to Aata India #imited. Today, Aata
India has established itself as one of +sia9s largest footwear retailer. It has cornered around .;
per cent market share in the organized sector Band approx. 4.;< of the total footwear marketC
21
+lmost 04 percent of the company9s revenue is from the domestic market while the rest is from
exports. The company currently sells over 3; million pairs of shoes every year and has an annual
sales turnover of more than "s 4111 million B6S- 2F4 millionC.
/ver the years, Aata India has established a leadership position in the footwear industry and is
easily the most trusted name in branded footwear. Its retail network of 2?;1 stores gives it a
reachJ coverage that no other footwear company can match. The stores are present in good
locations and can be found in all the metros, mini%metros and towns
In terms of products, the company has now built a good, market%oriented collection that is in line
with fashion trends and offers a good uality to price ratio. Its product range now encompasses
classic shoes such as +mbassador for ,en and comfort shoes such as &omfit for ladies, as well
as a more trendy collection for ladies in the ,arie &laire range and a sporty fashion collection
for young adults in the $orth Star range.
Aata9s smart looking new stores supported by a range of better uality products are aimed at
offering a superior shopping experience to its customers. +nd the new face of Aata India is now
visible to the industry as well as its customers. Today, backed by a brand perception of
experience, the company is working towards positioning itself as a vibrant and contemporary
young brand. It has significantly transformed its retail formats to become more lifestyle%oriented,
which has helped change consumer perceptions to a large extent.
(chieveents
22
+,ITK &/"'/"+T5 5L&5##5$&5
Aata India has been awarded the +,ITK &/"'/"+T5 5L&5##5$&5 +)+"- on ?2st
February ?114. This award has been given for Aata9s excellent performance and retail growth
during the past year.
I,+85S "etail +ward
This award was received in the footwear category on on Eth September ?11F. This award was a
part of "eid ! Taylor +wards for "etail 5xcellence presented during India "etail Summit ?11E.
Super Arands +ward
It is awarded to the 2st top ten Super brands of India. Super brand signifies the recognition that
the consumer is giving to the Arand Image, Arand (alue and Arand -elivery. The award
ceremony was held in ,umbai on 2?th +pril ?11F
F,&8 &onsumer "eaction +ward
2?
Aata won F,&8 &onsumer "eaction +ward in Fashion ! Specialties BShoesC on ,arch ?11F.
The +ward was presented by: Aharati (idyapeeth9s Institute of ,anagement Studies ! "esearch
BA(I,S"C.
#ycra Images Fashion +wards
Aata is honoured for . consecutive years as ,ost +dmired Arand of the year in Footwear
&ategory on ?;th Ianuary ?11F.+wards % ?11E
"etailer of the Kear +ward
This award was received on ?3th $ov ?11E in the footwear category. This award was a part of
"eid ! Taylor +wards for "etail 5xcellence presented during India "etail Summit ?11E.
+mity &orporate 5xcellence +ward
This award was given to Aata by +mity International Ausiness School on ??nd M ?3th Feb ?11E
for having achieved an enviable position of one of the best and most admired company of the
world with their unparalleled performance.+wards % ?11;
Super Arands +wards
2.
It is awarded to the 2st top ten Super brands of India on ?.rd Sept ?11;. Super brand signifies
the recognition that the consumer is giving to the Arand Image, Arand (alue and Arand -elivery
"etail +sia 'acific Top ;11 +wards
Aata won the Top "etailer ?11E%India Aronze award on Fth Sept ?11;. This award is given by
"etail +sia 'acific T/' ;11.
Aata has a worldwide reach, with operations across ; continents managed by 3 regional
meaningful business units B,A6sC. 5ach unit benefits from synergies specific to their
environment, such as product development, sourcing or marketing support. 5ach ,A6 is
entrepreneurial in nature, and can uickly adapt to changes in the market place and seize
potential growth opportunities.
1ata today<
Serves 2 million customers per day
5mploys more than 31,111 people
/perates 3,E11 retail stores
,anages a retail presence in over ;1 countries
"uns 31 production facilities across ?E countries
23
Incorporated as Aata Shoe &ompany 'rivate #imited in 20.2 in India, the company went public
in 20F. when it changed its name to Aata India #td.
1ata India today<
Serves 2 #akh customers per day
5mploys more than 4111 people
/perates 0;1 retail stores
"uns ; production facilities across India
/ur first factory was set up in 7onnagar in 20.2 which was then shifted to Aatanagar.
+t the five factories % Aatanagar, )est Aengal B20.ECNAatagan*, Aihar B203?CN Faridabad,
Daryana B20;2CN 'eenya, 7arnataka B2044CN Dosur, Tamil $adu B2003C % the &ompany
manufactures uality leather, rubber, canvas and '(& shoes in wide%ranging designs and styles
at affordable prices. Aata India has a in%house tannery at ,okamehghat in Aihar, which is the
second largest in +sia.
2;
.i=erty:%
#iberty Shoes #td. is the only Indian company that is among the top ; manufacturers of leather
footwear in the world with a turnover exceeding 6.S. G211 million.
&ompany produces more than ;1,111 pairs of footwear a day covering virtually every age group
and income category. 'roducts are marketed across the globe through 2;1 distributors, .;1
exclusive showrooms and over E111 multi%brand outlets, and sold in thousands every day in
more than ?; countries including fashion%driven, uality%obsessed nations like France, Italy, and
8ermany.
#iberty has developed a spectrum of 21 exclusive brands, each of which has been given that
extra edge to cater to a specific target group. Today, the new range from #iberty is all about
style, design, and comfort. The range imbibes the spirit of fun and is trendy to the core.
#iberty has something for every occasion, for every income bracket ! every age group. It
pampers its customer by keeping pace with global footwear fashion trends and by going that
extra mile which is why, special care has been taken to make sure that the outlets9 design meets
the specific needs and taste of the target groups.
+part from the existing brands, #iberty is busy fashioning the look of the future in footwear.
Introducing new designs that redefine styles and comfort associated with the finest in
workmanship. These are the brands of #iberty


Steeped in a philosophy that has at its core innovation, technology and advancement, we at
#iberty, pride ourselves over and above everything else on our healthy and heart%felt respect for
the human ethos, which pro*ects itself in the expectancy and excitement with which one greets
2E
the arrival of the new combined with a sincere and deep regard for the old, which is appreciative
of and adopts at every stage the uniue balance between modernization and tradition.
#iberty as a brand is constantly evolving to keep pace with the changing trends, styles, beliefs,
and aspirations of people while maintaining the sanctity of certain traditions like workmanship
and good value.
#iberty Shoes, a manufacturer of footwear, is broadening its market by establishing specialized
retail stores called ="evolutions>. The introduction of an entirely new product range to cater to a
wider income group along with diversifying their focus from men@s shoes and children school
shoes to catering to the entire family which will help increase #iberty@s addressable market. The
company has introduced shoes for fashion conscious consumers.
#iberty Shoes, a manufacturer of footwear, is broadening its market by establishing specialized
retail stores called ="evolutions>. )e expect the company to increase its presence in a more
diversified income group. Digher sales combined with expansion in profit margins are expected
to drive earnings. &urrent valuations do not discount these positive developments.



2F
Pantaloon%.i=erty >-: 'antaloon and #iberty Shoes entered in to a I( in September, 1; to set
up a chain of large format footwear retail stores ranging between 21,111%2;,111 suare feet.
#iberty Shoes will invest "s.2??.;mn for 30< stake and 'antaloon will invest "s.2?F.;mn for
;2< stake. The I( will set up 3; stores by ?114. The details of this venture are still under
discussionN therefore we have not factored any upside from this I( into our pro*ections.
Aenefits from expansion in 6ttaranchal 'lant: To avail of the promotional incentives available at
6ttaranchal, #iberty has set up a plant with capacity of 341,111 pairs. The plant commenced
operations in Iune 13. The excise duty savings from this plant were "s.2;mn in FK1; and are
expected to be "s..1mn in FK1E. The company is also expand%
ing capacity to 2.24mn pairs. This expansion will be completed by Iune%Iuly, 1E. Therefore
excise duty savings in FK1F will be "s;1mn.
(+T and reduction in raw materials cost: The implementation of (+T O 2?< has enabled the
company to revise their prices taking a long term view of their strategy. Aackward integration
will contribute to reduction in raw material cost. Aoth these factors will increase operating
margins from 2?.?< in FK1; to 23.0< in FK1E and 2;.0< in FK1F.
-aluations: )e expect turnover of the company to grow from "s2F41mn in FK1; to
"s.?20Fmn in FK1E and "s?E24mn in FK1F along with 5'S growth of F4< &+8" over the
next ? financial years. "o&5 is also expected to increase from 2E< in FK1; to ?2< in FK1F. +t
&,' of "s?E?, the stock trades at a '58 of 1.?4xFK1E and 1.?1x FK1F. Aased on '58 of
1.?;x FK1F, we expect ?E< growth in price to "s..1.)e recommend A6K on the stock.
24
;hadi:3
The "s 2?1%crore 7hadim group of companies, one such player now emerging as a market leader
in the region, has already gone into manufacture, along with 211 per cent outsourcing, and is
now poised to expand in a big way, particularly in eastern region and South, mainly Tamil $adu,
+ndhra 'radesh and 7arnataka.

5stablished in 7olkata in 20;. by a Aengali businessman, ,r Satya 'rosad "oy Aurman, as a
small trading outfit involved in footwear wholesale business, 7hadims has grown steadily and
today commands brand premium in several States.
7hadim have grown mainly through our outsourcing strengths and today have as many as ?F
retail outlets in both urban and semi%urban centers and some 2;1 franchisee shops. The 7hadim
group of companies, with a significant presence in the footwear segment, especially in the east
and south regions, has redefined its business plans to leverage the 7hadim9s brand and register a
ma*or presence in lifestyle retailing in the semi%urban markets.
The company plans to launch 21 superstores initially in district towns, under P7hadim9s 7hazana9
brand entailing an investment of "s ;1 crore in the next three years.
The first such store, housed in .1,111 s ft and spread over four floors, has been launched at
7anchrapara town in $orth ?3 'araganas district.
The particular store concept being adopted by 7hadim9s % to make it suitable to a semi%urban
target audience with an ethnic uotient.
!ission: 5nsuring customer delight and stakeholders return by delivering uality product at
affordable price through extensive retail network
20

-ision: To be in every Indian step.
?1
?2
.a"hani:3
,r. 7.&. #akhani started this commendable *ourney in 20EE with the inception of #akhani
"ubber )orks, a small venture to manufacture rubber components. Dis hardship and
commitment made #akhani "ubber )orks an acclaimed name in the industry. 5ight years later,
he expanded his vision further when the group diversified into the manufacturing of Aeach
Slippers and that signaled a new dawn in the history of Indian Shoe Industry. +nd three years
later, the &anvas Shoes followed.
Dis endeavor and systematic approach helped the group expanding its horizons to sports shoes
manufacturing in the year 204?.
This never ending saga of success continued with their tie%up with +didas India for the
manufacturing of sports shoes.
Today, the group is the largest manufacturer of beach slippers in India with a production capacity
of 31 million pairs per year. +lso, it is the largest manufacturer ! largest exporter of canvas and
vulcanized shoes in India, with a production capacity of ..; million pairs per year.
#akhani +rmaan group is the largest producer of Sports Shoes, '6 In*ected Sports Shoes, '(&
In*ected Sports Shoes and #eather Shoes with a total capacity of ;.3 million pairs per year. It
also manufactures high fashion ladies and gents leather shoes for the 5uropean 6nion ,arket.
The eminence of the company, in the International Footwear Industry, is apparent from the fact
that it has been manufacturing sports shoes for the global sports apparel manufacturing giant,
adidas.
For over 41 years the adidas 8roup has been part of the world of sports on every level, delivering
state%of%the%art sports footwear, apparel and accessories. Today, the adidas 8roup is a global
leader in the sporting goods industry and offers a broad portfolio of products.
#akhani +rmann group has been manufacturing sports shoes for adidas for the last 21 years and
it is the only suppliers in India. The group is manufacturing more than 2 million pairs per year
for the brand adidas including all the latest high tech shoes.
??
Aeside this, the group also has the distinction of being the largest suppliers of rubberized auto
components to ma*or automobile players in the Indian market. Kear of tracking key industries
extensive experience and knowledge coupled with primary research has enabled the group to
deliver specified products to their customer. The company has been awarded by the 'resident
8iani Iail Singh for its commitment to uality.
Today, after this success in domestic market #akhani +rmaan has expanded its horizon by,
exporting its range of uality products to the international market in 67, 8ermany, France,
Spain, Switzerland, Dolland, Italy, ,exico, Iapan and South +frica.
The company has also been awarded by the 'rime ,inister ,r +tal Aihari (a*pai for its 5xport
5xcellence.
Products

S%orts
The sports Shoes manufacturing facility is euipped with high end machinery for producing top
of the line sports shoes. Skilled manpower and superior technology has enabled the company to
produce shoes known for comfort and better performance. /ver the years, the company has
immensely upgraded itself in terms of uality and production capacity.
.eather
?.
#akhani +rmaan has world%class facilities at its leather shoe manufacturing unit. It@s a perfect
blend of man ! machines to achieve world%class uality standards. +t #akhani +rmaan, special
care has been taken to ensure that the leather footwear developed at its manufacturing facility
combines the right balance of fashion and comfort.
0anvas
+t #akhani +rmaan canvas Shoes are manufactured in the state of the art facility. The facility is
well euipped to manufacture premium%uality 'remoulded &anvas Shoes, "olled Sole &anvas
Shoes and 6nlined (ulcanized Shoes. The division is producing more than 22111 pairs per day
for the domestic and export market.
#-(
#akhani +rmann has ultra modern facility for the manufacturing
of 5(+ and Aeach Slippers. The group has made the best use of
the 5(+ in*ection technology by substantially increasing the
product line and the production capacity. The company is again
geared up to install two color 5(+ in*ection machines in its
facility.
#akhani +rmaan group is the largest manufacturer of beach slippers in India with a production
capacity of 31 million pairs per year. +lso, it is the largest manufacturer ! largest exporter of
canvas and vulcanized shoes in India, with a production capacity of ..; million pairs per year.
It is the largest producer of Sports Shoes, '6 In*ected Sports Shoes, '(& In*ected Sports Shoes
and #eather Shoes with a total capacity of ;.3 million pairs per year. It also manufactures high
fashion ladies and gents leather shoes for the 5uropean 6nion ,arket.
The eminence of the company, in the International Footwear Industry, is apparent from the fact
that it has been manufacturing sports shoes for the global sports apparel manufacturing giant,
adidas.
?3
For over 41 years the adidas 8roup has been part of the world of sports on every level, delivering
state%of%the%art sports footwear, apparel and accessories. Today, the adidas 8roup is a global
leader in the sporting goods industry and offers a broad portfolio of products.
#akhani +rmann group has been manufacturing sports shoes for adidas for the last 21 years and
it is the only suppliers in India. The group is manufacturing more than 2 million pairs per year
for the brand adidas including all the latest high tech shoes.
Aeside this, the group also has the distinction of being the largest suppliers of rubberized auto
components to ma*or automobile players in the Indian market. Kear of tracking key industries
extensive experience and knowledge coupled with primary research has enabled the group to
deliver specified products to their customer.
Rela$o:3
The &ompany such is the story behind the creation and flourishing of "elaxo Footwear, the
company that has established itself as one of the most stalwart, uality conscious and avant%
garde footwear companies in the Indian economy today.
?;
Deaduartered in $ew -elhi, India, it maintains a fine combination of comfort, style, and workmanship
and is embarking upon appreciable growth plans for the future. The company began as a small
enterprise in the year 20FE and was officially incorporated in 2043 and further went into public listing
in 200;. +ccording to the ?114 Ausiness Survey, it has now emerged as the second largest footwear
producer in India.
"elaxo Footwear commenced its *ourney with the manufacture of Dawaii slippers. It has now grown
into a large%scale entrepreneurship catering to the basic needs of the uintessential Indian citizen. From
a modest sale figure of "s. 2 million in 20FF to more than "s. ;111 million last yearN the company has
experienced a record%breaking growth since inception. Today, the company manufactures over . lakh
pairs of footwear per day, which approximately adds up to over 21 million pairs per year. 5ach pair is
given thorough attention by the dedicated and skilled employees working at the 21 state%of%the%art
manufacturing units in $orthern India. Thus, it is no small wonder that the annual turnover has
multiplied ?.3 times in the last . years from "s. .1; crore in ?11F%14 to a whopping "s. ;;1 crore in
?110%21.
)hat@s more, with over .1 years of experience and 211 million satisfied customers, "elaxo keenly
looks forward to achieving an estimated annual turnover of "s. 2111 crore by the year ?12?.
-ision 9 !ission :
"elaxo Footwear was conceptualized with a lot of hope and hard work by an outstanding pilot team of
brilliant Indians, headed by the enterprising -ua family. #ikewise, the company@s vision and mission
were as powerful as its personality.
-ision: +chieving an annual turnover of "s 2111 crore by the end of ?12?.
!ission: 5nsuring customer satisfaction in keeping with the company@s motto of QRuality 'ar
5xcellenceQ.
0ore -alues
The &ore (alues that "elaxo lives by are exclusive in their overpowering simplicity and
absolute effectiveness. They are:
2. &orporate &itizenship
?. Donesty
?E
.. Transparency
3. 5mployee Satisfaction
;. &ustomer /rientation
E. Team /rientation
Dawaii: Dawaii is the most popular brand in the "elaxo portfolio. It comes in diverse shades and
styles and its comfort value makes it a favorite among all age groups. )ith an output of .,11,111
pairs a day, "elaxo is the largest manufacturer of Dawaii in India.
Flite: Flite is "elaxo@s most exclusive brand. Its uniue =fashionable and light> uality is ensured
by its manufacturing process, involving cutting%edge 5(+ technology. +vailable in an array of
colours and designs, it is among the popular products in the casual footwear industry
Sparx: Sparx is a range of sports shoes, sandals and Dawaii slippers that embodies the spirit of
today9s generation. +vailable in awe%inspiring colours and designs, it reflects verve and
dynamism as an iconic youth brand and is symbolic of a wholehearted zest for life.
Schoolmate: Schoolmate is a range of school shoes for boys and girls and is an expression of
"elaxo@s faith and commitment towards the young leaders of tomorrow. ,ade with special care
to pamper thousands of tiny feet, each pair bears the mark of superb workmanship and adaptable
design.
:.2 ,lo=al !ar"et:
(didas:3
?F
+didas #td. is a ma*or 8erman sports apparel manufacturer and part of the +didas 8roup, which
consists of "eebok sportswear company, Taylor ,ade% +didas golf company, and "ockport.
Aesides sports footwear, the company also produces other products such as bags, shirts, and
other sports and clothing related goods. The company is the largest sportswear manufacturer in
5urope and the second largest sportswear manufacturer in the world. The following table shows
the revenue of the company from the year ?11; to ?110. +nd it is seen that the revenue of the
company is increasing.
Financial data in illions of euros
S?0T
?ear 255@ 255A 2556 2557 255B
Sales 21.143 21.?EE 2?.3F4 23.E.E 2E.143
5AIT-+ ;.? E?F F?; 424 2 104
$et results 34. 300 ;?1 ;E1 E11
$et debt 2304 03E ;03 ;;2 ??.2
+didas today, is manufacturing different style of shoes used for
different purposes by many people. )hether it is running,
playing or walking +didas provides shoes for every different
activity.
+didas currently manufactures several running shoes, including the adiStar &ontrol ;, the adiStar
"ide, the Supernova Seuence, and the Supernova &ushi, among others. In addition, their
performance apparel is widely used by runners. +didas also uses kangaroo leather to make their
more expensive shoes.
The Tapie affair
+fter a period of trouble following the death of +dolf -assler9s son Dorst -assler in 204F, the
company was bought in 2040 by French industrialist Aernard Tapie, for 2.E billion French francs
Bnow U?3..024 millionC, which Tapie borrowed. Tapie was at the time a famous specialist of
rescuing bankrupt companies, an expertise on which he built his fortune.
Tapie decided to move production offshore to +sia. De also hired ,adonna for promotion. De
sent )alter Dead, from &hristchurch, $ew Vealand, a shoe sales representative, to 8ermany and
?4
met +dolf -assler9s descendants B+melia "andall -assler and Aella Aeck -asslerC and was sent
back with a few items to promote the company there.
In 200?, Tapie was unable to pay the interest from his loan. De mandated the &rWdit #yonnais
bank to sell +didas, and the bank subseuently converted the outstanding debt owed into euity
of the enterprise, which was unusual as per the prevalent French banking practice. +pparently,
the state%owned bank had tried to get Tapie out of dire financial straits as a personal favour to
Tapie, reportedly because Tapie was ,inister of 6rban +ffairs Bministre de la (illeC in the
French government at the time.
In February 200., &rWdit #yonnais sold +didas to "obert #ouis%-reyfus, a friend of Aernard
Tapie for a much higher amount of money than what Tapie owed, 3.34; billion BUE4..;23
millionC francs rather than ?.4; billion BU3.3.3F0 millionC. Tapie later sued the bank, because he
felt QspoiledQ by the indirect sale.
"obert #ouis%-reyfus became the new &5/ of the company. De is also the president of the
/lympiue de ,arseille football team, a team Tapie owned until 200..
Tapie filed for personal bankruptcy in 2003. De was the ob*ect of several lawsuits, notably
related to match fixing at the soccer club. -uring 200F, he served E months of an 24 month
prison sentence in #a SantW prison in 'aris.
In ?11;, French courts awarded TapieU2.; million compensation Babout 44E million francsC.
'ost%Tapie era
In 2003, combined with FIF+ Kouth 8roup, S/S &hildren9s (illages became the main
beneficiary.
?0
In 200F, +didas +8 acuired the Salomon 8roup who specialized in ski wear, and its official
corporate name was changed to +didas%Salomon +8 because with this acuisition +didas also
acuired the Taylormade 8olf &ompany and ,axfli which allowed them to compete with $ike
8olf.
In 2004, +didas sued the $&++ over their rules limiting the size and number of commercial
logos on team uniforms and apparel. +didas withdrew the suit, and the two groups established
guidelines as to what three%stripe designs would be considered uses of the +didas trademark.
+didas launched legal proceedings against the world9s biggest retailer, )al%,art, claiming that it
copied some of its products as revealed by San*ay Sinha of +-I-+S I$-I+.
In ?11., +didas filed a lawsuit in Aritish court challenging Fitness )orld Trading9s use of a two%
stripe motif similar to +didas9s three stripes. The court ruled that despite the simplicity of the
mark, Fitness )orld@s use was infringing because the public could establish a link between that
use and +didas9s mark.
In September ?113, top 5nglish fashion designer Stella ,c&artney launched a *oint%venture line
with +didas, establishing a long%term partnership with the corporation. This line is a sports
performance collection for women called Q+didas by Stella ,c&artneyQ and it has been critically
acclaimed.
+lso in ?11;, on . ,ay, +didas told the public that they sold their partner company Salomon
8roup for U34;m to +mer Sports of Finland.
In +ugust ?11;, +didas declared its intention to buy Aritish rival "eebok for G..4 billion B6SC.
This takeover was completed with partnership in Ianuary ?11E
S2T
and meant that the company
will have business sales closer to those of $ike in $orth +merica. The acuisition of "eebok
will also allow +didas to compete with $ike worldwide as the number two athletic shoemaker in
the world.
In ?11;, +didas introduced the +didas 2, the first ever production shoe to utilize a
microprocessor. -ubbed by the company QThe )orld9s First Intelligent ShoeQ it features a
microprocessor capable of performing ; million calculations per second that automatically
.1
ad*usts the shoe9s level of cushioning to suit its environment. The shoe reuires a small, user%
replaceable battery that lasts for approximately 211 hours of running. It currently retails for G?;1
B6S-C. /n ?; $ovember, ?11;, +didas released a new version of the +didas 2 with an increased
range of cushioning, allowing the shoe to become softer or firmer, and a new motor with 2;.
percent more torue.
/n 22 +pril ?11E, +didas announced an 22%year deal to become the official $A+ apparel
provider. They will make $A+, $A-#, and )$A+ *erseys and products as well as team%
coloured versions of the QSuperstarQ basketball shoe. This deal Bworth over G311 millionC takes
the place of the previous 21%year "eebok deal that was put in place in ?112. That means the
partnership would be continuing to "eebok.
/ne of the main focuses of +didas is football kit and associated euipment. +didas also provides
apparel and euipment for all teams in ,a*or #eague Soccer. +didas remain a ma*or company in
the supply of team kits for international football teams. +didas also designs and makes clothes,
sandals, watches, eyewear, bags, baseball caps, and socks. +s well, +didas has a branded range
of male and female deodorants, perfumes, aftershave and lotions.
&i"e:3
$ike, Inc. is a ma*or publicly traded sportswear and euipment supplier based in the 6nited
States. The company is headuartered in the 'ortland metropolitan area of /regon, near
Aeaverton. It is the world9s leading supplier of athletic shoes and apparel and a ma*or
manufacturer of sports euipment with revenue in excess of G2E billion 6S- in ?11F. +s of
.2
?114, it employed over .1,111 people worldwide. $ike and 'recision &astparts are the only
Fortune ;11 companies headuartered in the state of /regon.
$ike, originally known as Alue "ibbon Sports, was founded by 6niversity of /regon track
athlete 'hilip 7night and his coach Aill Aowerman in Ianuary 20E?. The company initially
operated as a distributor for Iapanese shoe maker /nitsuka Tiger, making most sales at track
meets out of 7night9s car.
The company9s profits grew uickly, and in 20EE, A"S opened its first retail store, located on
'ico Aoulevard in Santa ,onica, &alifornia. Ay 20F2, the relationship between A"S and
/nitsuka Tiger was nearing an end. A"S prepared to launch its own line of footwear, which
would bear the newly designed Swoosh.
$ike produces a wide range of sports euipment.
Their first products were track running shoes. They
currently also make shoes, *erseys, shorts, base layers etc.
for a wide range of sports including track ! field,
baseball, ice hockey, tennis, +ssociation football,
lacrosse, basketball and cricket. $ike +ir ,ax is a line of shoes first released by $ike, Inc. in
204F. The most recent additions to their line are the $ike E.1, $ike $KL, and $ike SA shoes,
designed for skateboarding. $ike has recently introduced cricket shoes, called +ir Voom Korker,
designed to be .1< lighter than their competitors9. In ?114, $ike introduced the +ir Iordan LL.,
a high performance basketball shoe designed with the environment in mind.
(cCuisitions
.?
A Nike brand athletic shoe
In Iuly ?11., $ike paid G.1; million to acuire &onverse Inc., makers of the iconic &huck
Taylor +ll Stars. In an effort to target the low%end athletic goods market, $ike purchased the
parent company of Starter athletic clothing brand in +ugust ?113 for G3. million.
/n ?. /ctober ?11F, it was announced that the sports apparel supplier 6mbro, known as the
manufacturers of the 5ngland national football team9s kits, had agreed to be bought by $ike in a
deal said to be worth X?4; million BYGE11mC.
/n . ,arch ?114 6mbro was completely acuired by $I75 Inc.
Products
$ike produces a wide range of sports euipment. Their first products were track running shoes.
They currently also make shoes, *erseys, shorts, baselayers etc. for a wide range of sports
including track ! field, baseball, ice hockey, tennis, +ssociation football, lacrosse, basketball
and cricket. The most recent additions to their line are the $ike E.1 and $ike SA shoes, designed
for skateboarding. $ike has recently introduced cricket shoes, called +ir Voom Korker, designed
to be .1< lighter than their competitors9. In ?114, $ike introduced the +ir Iordan LL., a high
performance basketball shoe designed with the environment in mind.
$ike positions its products in such a way as to try to appeal to a Qyouthful....materialistic crowdQ.
It is positioned as a premium performance brand. Dowever, it also engineers shoes and apparel
for discount stores like )al%,art under the Starter brand.
$ike sells an assortment of products, including shoes and apparel for sports activities like
association football, basketball, running, combat sports, tennis, +merican football, athletics, golf
and cross training for men, women, and children. $ike also sells shoes for outdoor activities such
as tennis, golf, skateboarding, association football, baseball, +merican football, cycling,
volleyball, wrestling, cheerleading, auatic activities, auto racing and other athletic and
recreational uses. $ike is well known and popular in Kouth culture, &hav &ulture and Dip hop
culture as they supply urban fashion clothing. $ike recently teamed up with +pple Inc. to
produce the $ikeZ product which monitors a runner9s performance via a radio device in the shoe
which links to the i'od nano. )hile the product generates useful statistics, it has been criticized
..
by researchers who were able to identify users9 "FI- devices from E1 feet B24 mC away using
small, concealable intelligence motes in a wireless sensor network.
In ?113, they launched the S'+"R Training 'rogramJ-ivision. It is currently the premier
training program in the 6.S.
In the video game 8ran Turismo 3 there is a car by $ike called the $ike/ne ?1??, designed by
'hil Frank.
Deaduarters
$ike9s world headuarters are surrounded by the city of Aeaverton, /regon but are technically
within unincorporated )ashington &ounty.
From $ike9s perspective, the company, one of only two Fortune ;11 employers still
headuartered in the state of /regon B'recision &astparts is the otherC, has such a large payroll,
that it should not be annexed to Aeaverton without its consent. $ike prefers to work with the
)ashington &ounty 8overnment as it develops and expands its headuarters. +nnexation would
cost the company GF11,111 per year in increased taxes for services it already receives from the
county and various special%purpose districts.
From Aeaverton9s perspective, the company9s expectation for special treatment is counter to the
city9s desire to have zoning and other laws apply eually to all businesses, big and small. +
nearby &ostco store, one of that company9s earliest, was annexed into Aeaverton years ago
without incident, and Aeaverton9s focus on additional annexation during the ?2st century reflects
a desire to streamline both city and county government by having metropolitan%area services
handled by cities instead of counties.
The Oregonian dates the bad blood between the two back to the $ike purchase of F3 acres B1..
km[C of nearby Aeaverton land which soon fronted the Iared &o%operation. )hen $ike proposed
expanding their headuarters in that direction, Aeaverton at first wanted them to build housing
near the ,+L station and criss%cross the property with two public roads, expectations defined by
.3
the zoning already in place when $ike bought the land. Aeaverton9s reuest was mostly
consistent with ,etro9s transit%oriented development plans for the region. +fter a year, which
included a threat by $ike to move ;,111 *obs out of the state, Aeaverton backed down from the
reuirement for housing, but the lack of accommodation was something that $ike did not forget.
The annexation standoff soon led Aeaverton to attempt a forcible annexation. That led to a
lawsuit by $ike, and lobbying by the company that ultimately ended in /regon Senate Aill 44F
of ?11;. 6nder that bill9s terms, Aeaverton is specifically barred from forcibly annexing the land
that $ike and &olumbia Sportswear occupy in unincorporated )ashington &ounty for .; years,
while 5lectro Scientific Industries and Tektronix get that same protection for .1 years.
!anufacturing
$ike has contracted with more than F11 shops around the world and has offices located in 3;
countries outside the 6nited States. ,ost of the factories are located in +sia, including
Indonesia, &hina, Taiwan, India, Thailand, (ietnam, 'akistan, 'hilippines,and ,alaysia. $ike is
hesitant to disclose information about the contract companies it works with. Dowever, due to
harsh criticism from some organizations like &orp)atch, $ike has disclosed information about
its contract factories in its &orporate 8overnance "eport.
Huan rights concerns
$ike has been criticized for contracting with factories in countries such as &hina, (ietnam,
Indonesia and ,exico. (ietnam #abour )atch, an activist group, has documented that factories
contracted by $ike have violated minimum wage and overtime laws in (ietnam as late as 200E,
although $ike claims that this practice has been halted. The company has been sub*ect to much
critical coverage of the often poor working conditions and exploitation of cheap overseas labor
employed in the free trade zones where their goods are typically manufactured. Sources of this
criticism include $aomi 7lein9s book No Logo and ,ichael ,oore9s documentaries.
$ike has been criticized about ads which referred to empowering women in the 6.S. while
engaging in practices in 5ast +sian factories which some felt disempowered women.
.;
-uring the 2001s, $ike faced criticism for use of child labor in &ambodia and 'akistan as well
as 8reen, /hio in factories it contracted to manufacture soccer balls. +lthough $ike took action
to curb or at least reduce the practice of child labor, they continue to contract their production to
companies that operate in areas where inadeuate regulation and monitoring make it hard to
ensure that child labor is not being used.
These campaigns have been taken up by many

college and universities, especially anti%
globalization groups as well as several anti%sweatshop groups such as the 6nited Students
against Sweatshops. -espite these campaigns, however, $ike9s annual revenues have increased
from GE.3 billion in 200E to nearly G2F billion in ?11F, according to the company9s annual
reports.
$ike sells an assortment of products, including shoes and apparel for sports activities like
association football, basketball, running, combat sports, tennis, +merican football, athletics, golf
and cross training for men, women, and children. $ike also sells shoes for outdoor activities such
as tennis, golf, skateboarding, association football, baseball, +merican football, cycling,
volleyball, wrestling, cheerleading, auatic activities, auto racing and other athletic and
recreational uses. $ike is well known and popular in youth culture, chav culture and hip hop
culture as they supply urban fashion clothing. $ike recently teamed up with +pple Inc. to
produce the $ikeZ product which monitors a runner9s performance via a radio device in the shoe
which links to the i'od nano. )hile the product generates useful statistics, it has been criticized
by researchers who were able to identify users9 "FI- devices from E1 feet B24 mC away using
small, concealable intelligence motes in a wireless sensor network.
$ike has contracted with more than F11 shops around the world and has offices located in 3;
countries outside the 6nited States. ,ost of the factories are located in +sia, including
Indonesia, &hina, Taiwan, India, Thailand, (ietnam, 'akistan, 'hilippines, and ,alaysia.
Ree=o":3
.E
"eebok International #imited is a producer of athletic footwear, apparel, and accessories and is
currently a subsidiary of +didas. The name comes from the +frikaans spelling of rhebok, a type
of +frican antelope or gazelle. The company, founded in Aolton, 6nited 7ingdom, in 240;, was
originally called I.). F/ST5" ! S/$S but was renamed "eebok in 20;4. The company9s
founders, Ioe and Ieff Foster, found the name in a dictionary won in a race by Ioe Foster as a
boyN the dictionary was a South +frican edition, hence the spelling.
"eebok surged in popularity in 204? after the introduction of the Freestyle athletic shoe, which
was designed for women and came out when the aerobics craze started. $ot only was the "eebok
Freestyle popular as athletic wear, but also as casual wear. +s a result the Freestyle became an
icon of the 2041s fashion scene with hi%top versions Bincluding two velcro straps at the topC and
colors, including white, black, red, yellow, and blue. "eebok continues to produce the Freestyle
as it is popular with cheerleading, aerobic dancing, the gym and consumers.
Footwear "eebok uses footwear factories in 23 countries. ,ost factories making "eebok
footwear are based in +sia\primarily &hina Baccounting for ;2< of total footwear productionC,
Indonesia B?2<C, (ietnam B2F<C and Thailand BF<C. 'roduction is consolidated, with 44< of
"eebok footwear manufactured in 22 factories, employing over F;,111 workers.
+pparel "eebok has factories in 3; countries. The process of purchasing products from suppliers
is organized by region. ,ost B;?<C of "eebok9s apparel sold in the 6S is produced in +sia, with
the rest coming from countries in the &aribbean, $orth +merica, +frica and the ,iddle 5ast.
+pparel sold in 5urope is typically sourced from +sia and 5urope. +pparel sold in the +sia
'acific region is typically produced by +sian%based manufacturers.
.F
Pua:3
'uma +8 "udolf -assler Sport Bofficially styled '6,+C is a ma*or 8erman multinational
company that produces high%end athletic shoes, lifestyle footwear and other sportswear. Formed
in 20?3 by "udolf -assler, the company is based in Derzogenaurach, 8ermany.
'uma +8 has approximately 0,?13 employees and distributes its products in more than 41
countries. For the fiscal year ?11., the company had revenue of U2.?F3 billion. 'uma were the
commercial sponsors for the many series, with the *erseys and clothing sporting the 'uma brand.
Iapanese fashion guru ,ihara Kasuhiro teamed up with 'uma to create a high%end and high%
concept line of sneakers.
'uma is the main producer of enthusiast driving shoes and race suits. They are the prime
producer in both Formula /ne and $+S&+" especially.
They had successfully won the rights of sponsoring the ?11E FIF+ )orld &up champions, the
Italian national football team, with them making and sponsoring the clothing worn by the team.
Their partnership with Ferrari and A,) to make 'uma%Ferrari and 'uma%A,) shoes has also
contributed to this effect. /n ,arch 2;, ?11F 'uma launched its first new ?11FJ?114 line of
uniforms for a club, and 8r]mio will be the first to use the laser sewn technologyNsimilar to the
one worn by Italy at the )orld &up in ?11E. 8r]mio and other Arazilian clubs will be the first to
use the technology because their season starts six months earlier than 5uropean clubs. 'uma also
makes baseball cleats, and Iohnny -amon, the all%star center fielder for the $ew Kork Kankees,
is their spokesperson. De wore pumas during the "ed Sox ?113 )orld Series win. De has his
own cleat called the -F" metals.
.4
D. Strategic (nalysis
D.1 Porters Five Forces (nalysis
1uyersE0ustoers Power:3
1. &onsumers@ Aenefit on +ccount of &ompetitive ,arket:%
+s the competition in the market is increasing, it gives the buyers the power to bargain on
the product price. If the buyer will not get the attractive buyer , he may turn to the
competitor who is providing the competitive prices.
2. Increasing 'roduct /ptions:%
+s the more and more options are available in the market , the buyer may turn to the
other company for better options.
Su%%liers Power:3
2. #ack of "aw materials:%
+s the suppliers for the raw material for the footwear is lacking. It may be possible that
the numbers of suppliers are less in the market which helps the suppliers to have greater
power.
Rivalry aong 0o%etitors:3
1. Intense &ompetition in a Fragmented ,arket:%
+s the Footwear industry is fragmented, there isn@t any market leader in the industry. So
every firm can en*oy the benefits of competition in the market.
2. Increase in +dvertising 5xpenditure:%
.0
+s the competition is high, every firm needs to spend more on the advertisement to
survive in the highly competitive market.
.. "ise in Specialization:%
+s the numbers of players are increasing in the market, every firm needs to specialize in
any one sector to target any one segment.
Threat of &ew #ntrants:3
1. +vailability of $iche Segments:%
+s the there are so many markets which are niche and not touched by any marketer.It
encourages the new entrants to enter the footwear industry.
Threat of Su=stitutes:3
There is not any kind of substitute available in the market for footwear. So there is not
any threat of substitutes.
31
D.2 P#ST (&(.?SIS OF I&'I(& FOOT*#(R I&'/STR?:3
Political:3
^ Dome market lobbyingJpressure groups
^ (ery few sporting events apart from cricket fixtures to attract customers
#conoic
^ ,arginal share of ?.33 percent in global trade worth 6SG 0F.E1E billion
^ 5stimated target of 2? bn G BFbn G export Z ; bn G domesticC trade by the year ?12?
overseas economies and trends
^ The Indian footwear retail market is expected to grow at a &+8" of over ?1< for the
period spanning from ?114 to ?122. Footwear is expected to comprise about E1< of
the total leather exports by ?122 from over .4< in ?11E%1F
^ 8rowing middle class and growing buyer power leading customers to look for
branded shoes.
32
^ Seasonality issues M sports is more of a rage in summers
^ #ack of targeting of market segments for kids and women
Social
^ #ifestyle trends M upward shift demographics
^ &onsumer attitudes and opinions changing favorably towards branded shoes
^ ,edia views
^ &onsumer buying patterns
^ Fashion and role models
^ Auying access and trends
^ +dvertising and publicity
Technological
^ &ompeting technology development
^ India offers benefits like low cost of production, abundant raw material, and a huge
consumption market
^ "esearch funding in design and reuirements
^ ,anufacturing maturity and capacity
^ Information and communications
^ &onsumer buying mechanismsJtechnology
3?
^ Innovation potential
^ Technology access, licensing, patents
3.
D.: O%%ortunities and Threats
/''/"T6$ITI5S: %
+bundant scope to supply finished leather to multinationals setting up shop in India.
8rowing fashion consciousness globally.
6se of information technology and decision support software to help eliminate the length
of the production cycle for different products
'roduct diversification % There is lot of scope for diversification into other products,
namely, leather garments, goods etc.
8rowing international and domestic markets.
5xposure to newer markets through FairsJ AS,s
"etain customers through uality supplies and timely deliveries
+im to present the customer with new designs, infrastructure, and country ! company
profiles.
6se of modern technology
5xhibit strengths in manufacturing, for example, strengths in classic shoe manufacturing,
hand crafting etc.
-e%reservation of the footwear sector.
TD"5+TS: %
5ntry of multinationals in domestic market.
Stiff competition from other countries. BThe performance of global competitors in leather
and leather products indicates that there are at least ; countries viz, &hina, Indonesia,
Thailand, (ietnam and Arazil, which are more competitive than India.C
$on% tariff barriers % -eveloping countries are resorting to more and more non M tariff
barriers indirectly.
Improving uality to adapt the stricter international standards.
33
Fast changing fashion trends are difficult to adapt for the Indian leather industries.
#imited scope for mobilizing funds through private placements and public issues, as
many businesses are family%owned.
@. Financial (nalysis
;.2 7ey "atios
a. Return Related:
1ata India .iited .i=erty Shoes .iited
!irFa International
.iited
Rela$o Footwear .iited
(s on
.2%
,a
r%
10
.2%
,a
r%
14
.2%
,a
r%
1F
(s on
.2%
,a
r%
10
.2%
,a
r%
14
.2%
,a
r%
1F
(s on
.2%
,a
r%
10
.2%
,a
r%
14
.2%
,a
r%
1F
(s on
.2%
,a
r%
10
.2%
,a
r%
14
.2%
,a
r%
1F
"eturn
on
Total
+ssets
B<C
?4.
.
?2.
3
2F.
3
"eturn
on
Total
+ssets
B<C
4
21.
2
22.
3
"eturn
on
Total
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B<C
%
?.2
%
?.3
4.3
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on
Total
+ssets
B<C
?2.
.
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on
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b. .iCuidity:
1ata India .iited .i=erty Shoes .iited
!irFa International
.iited
Rela$o Footwear .iited
(s on
.2%
,a
r%
10
.2%
,a
r%
14
.2%
,a
r%
1F
(s on
.2%
,a
r%
10
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r%
14
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r%
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.2%
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r%
10
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r%
14
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,a
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1F
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.2%
,a
r%
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14
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,a
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0urre
nt
Ratio
4$8
2.3 2.3 2.E
0urre
nt
Ratio
4$8
..? ..3 ..2
0urre
nt
Ratio
4$8
?.; ?.0 ..3
0urre
nt
Ratio
4$8
2.3 2.F 2.0
Guic"
Ratio
4$8
1.3 1.. 1..
Guic"
Ratio
4$8
2.F 2.4 2.4
Guic"
Ratio
4$8
2 2.2 2.3
Guic"
Ratio
4$8
1.E 1.F 2
3;
0ash
Ratio
4$8
1.. 1.2 1.?
0ash
Ratio
4$8
1.2 1.2 1.2
0ash
Ratio
4$8
%% 1.2 %%
0ash
Ratio
4$8
1.2 1.2 1.?
c. Profita=ility:
1ata India .iited .i=erty Shoes .iited
!irFa International
.iited
Rela$o Footwear .iited
(s on
.2%
,a
r%
10
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r%
14
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r%
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B<C
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3
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F
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4
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;
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ng
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ng
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/perati
ng
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B<C
%
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%
?.?
F.E
/perati
ng
,argin
B<C
21 0.3 4.?
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2 2 2.2
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rBxC
?.; ?.. ?.?
d. 0ash Flow:
1ata India .iited .i=erty Shoes .iited
!irFa International
.iited
Rela$o Footwear .iited
(s on
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r%
10
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,a
r%
14
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ing
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ales
21.
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4
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22.
3
2F 21.
2
O%erat
ing
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ales
21.
2
21 4.F
3E
4H8 4H8 4H8 4H8
e. .everage:
1ata India .iited .i=erty Shoes .iited
!irFa International
.iited
Rela$o Footwear .iited
(s on
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%
,
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10
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%
,
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,
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,
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,
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,
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-ebtJ5
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BxC
1.2 1.? 1.?
-ebtJ5
uity ratio
BxC
1.4 2 2..
-ebtJ5
uity ratio
BxC
2 1.0 1.0
-ebtJ5
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BxC
2.; 2.? 2.2
Total
-ebtJTot
al +ssets
BxC
1.2 1.2 1.?
Total
-ebtJTot
al +ssets
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1.3 1.; 1.;
Total
-ebtJTot
al +ssets
BxC
1.; 1.3 1.3
Total
-ebtJTot
al +ssets
BxC
1.E 1.; 1.;
#ong
term
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%% %% %%
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Interest
&overag
e BxC
1.. 1.? ?.?
Interest
&overag
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?.F ?.4 ?.0
3F
f. *or"ing 0a%ital:
1ata India .iited .i=erty Shoes .iited
!irFa International
.iited
Rela$o Footwear
.iited
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10
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to Sales
BxC
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to Sales
BxC
1.3 1.3 1.;
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g
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to Sales
BxC
1.? 1.. 1.3
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BxC
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g
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Bdays
gross
salesC
;3.
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F
EE.
3
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g
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gross
salesC
23
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Bdays
gross
salesC
40.
;
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salesC
20.
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4.. 0.. 0.3
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salesC
21
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salesC
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;
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4
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cost of
salesC
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;
34
g. Per Share:
1ata India .iited .i=erty Shoes .oited
!irFa International
.iited
Rela$o Footwear .iited
(s on
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r%
10
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r%
14
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Aook
(alue
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Share
B"sC
3E.
2
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?
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F
Aook
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Share
B"sC
F2.
4
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;4
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B"sC
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gs 'er
Share
B"sC
21.
;
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Share
B"sC
3.3 0.3
21.
2
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Share
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5arnin
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Share
B"sC
22.
0
4.4 ;..
-ivide
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Share
B"sC
. ?.; ?
-ivide
nd 'er
Share
B"sC
%% %% %%
-ivide
nd 'er
Share
B"sC
1.2 1.? ?.;
-ivide
nd 'er
Share
B"sC
1.F 1.F 1.F
h. ,rowth:
1ata India .iited .i=erty Shoes .iited
!irFa International
.iited
Rela$o Footwear
.iited
(s on
.2%
,a
r%
10
.2%
,a
r%
14
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10
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14
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1F
Total
/perat
ing
Incom
e
21.
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2..
FF
2?.
E.
Total
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ing
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e
%
?.0
0
22.
;F
4.3
.
Total
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23.?
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Total
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%
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%
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,.
214.
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.;
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%
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%
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%
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%
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%
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;3.?
4
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Total
+ssets
F.1
2
21.
F;
22
Total
+ssets
%
;.1
2
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4
3;.
?4
Total
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%
?.1.
1.3
4
0.F.
Total
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.E.
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2E.
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?..
43
30
;ey Ratios of aIor %layers affecting Industry:3
0o%any &ae
!"t. 0a%.
4Rs. 0r.8
PE0
Ratio
PE#
Ratio
Aata India ?20;.33 ?..0 .3.?
#iberty Shoes 242.34 22.. 20.F
,irza International 234.F4 ; 4
"elaxo Footwear 304.EE 0.3 2..?
Ind.0o%osite .1?3..E 2?.3 20.;4
;1
Ratio)s i%act on the Footwear Industry
?R0
(ggregate
Aata
India
#iberty
Shoes
,irza
International
"elaxo
Footwear
255B5: 255B5: 255B5: 255B5:
'e=t3#Cuity Ratio 1.E3 1.2. 1.03 1.0. 2...
.ong Ter 'e=t3#Cuity Ratio 1.. 1.1. 1.2? 1.3 2.12
0urrent Ratio 2.3E 2.E. 2.24 2.1F 2.12
Fi$ed (ssets ?.;. ..3? 2.0? 2.E. ?.30
Inventory ..?? ..02 ..3; ..42 21.E3
'e=tors 4.43 3..;F ..3F 2?.1. ?..1;
Interest 0over Ratio ?.F; 22..3 2.;4 2.E. ?.?;
P1I'T! 4H8 0.;E 2?..0 21.E4 21.22 2..23
P1IT! 4H8 F.30 0.44 4.1? F.1F 21.;4
P1'T! 4H8 E.4. 22.;? ;.E ;.FF 4.3;
0P! 4H8 ;.02 4.;; ;.F 3.E; E.1E
(P(T! 4H8 ..43 E.13 ..13 2.E2 ..30
RO0# 4H8 2?.1. .;.0. 4.E. 0.02 ?F..0
RO&* 4H8 0.4F ?3..4 E..3 3..F ?2.2?
;.? Trend +nalysis of Indian Footwear Industry
;2
Interpretation of the above chart is that the profit earnings ratio of the Indian Footwear Industry
is only 20.;4< in the economy. +s the ma*or players of the industries is on the bullish trend, the
development is seen among them is to be seen due to the technology improvement, taste and
preferences of the customers. Thus the demographic improvement will make a huge impact on
the overall Industry. So on the bases of this we can say that the phase of the Indian Footwear
Industry is 8rowing Industry.
;?
A. ;ey Issues 9 Facts
A.1 (dvantages of Footwear Industry:
Indian footwear market is expected to grow at 20< &+8" by ?12? on growing demand for
women and children footwear, rising brand%consciousness and rising role of women in retail
purchases.
)ith growing demand for children and women footwear
, the Indian footwear retail market is pro*ected to grow at a &+8" of about 20< between ?110
and ?12?. #ow cost of footwear production is another ma*or advantage with India which will
help in sustaining footwear demand in near future. India has tremendous untapped potential in
the ladies and kids footwear segment.
Aesides, women in India are becoming a key decision maker for most of the retail buying like
footwear as their role in family planning and contribution to income is increasing. They have
also been found doing impulsive buying for their kids during their visit to shopping malls. Thus,
this changing trend will definitely help in raising the demand for footwear in India.
Indian footwear market gives intensive ualitative and uantitative evaluation of the market.
A.2 ;ey Success factors:
Focus on exports, develop international uality products.
Should be in constant touch with international fashion trends and designs.
$eed to have a wide product range to cater to all markets segments.
"aw material sourcing critical as prices fluctuate often.
-omestic market % need to focus on distribution.
'roduct branding essential.
;.
A.: ;ey 'rivers:
Increasing consumerism and fashion consciousness driving the market
,anufacturers emphasizing on branding leather products
5xport market expected to grow. ,any international brands have started outsourcing
from India.
A.D #thnic Footwear Industry Status:
Its production topography is decentralized, unorganized and cluster centric. Family units carry
out the production. ,ost of the family members are associated with production processes. ,ale
members are doing cutting, stitching and pasting work. )omen do the embroidery work.
The industry is on decline and migration of artisans to other professions and cities is visible in all
clusters. /n account of certain product deficiencies and lack of process of renewal and touch
with consumer preferences, the sector is getting marginalized and most of the artisans are at
subsistence level.
'roduct deficiencies, lack of standardization, absence of innovation and improved designs,
onslaught of cheaper footwear produced by organized factories, low productivity and prevailing
exploitative marketing channels made this sector uncompetitive. It impacted the economic
conditions of artisans and its result is the migration of artisans to other professions and cities.
Their children also started opting for other professions. The danger of extinction of this art and
cultural heritage is more.
A.@ ;ey 0hallenges:
2C #ocation:
Q"ight 'lace, "ight choiceQ
#ocation is the most important ingredient for any business that relies on customers, and is
typically the prime consideration in a customer@s store choice. #ocations decisions are harder to
change because retailers have to either make sustainable investments to buy and develop real
;3
estate or commit to long term lease with developers. )hen formulating decision about where to
locate, the retailer must refer to the strategic plan:
Investigate alternative trading areas.
-etermine the type of desirable store location
5valuate alternative specific store site
?C ,erchandise:
The primary goal of the most retailers is to sell the right kind of merchandise and nothing is more
central to the strategic thrust of the retailing firm. ,erchandising consists of activities involved
in acuiring particular goods and services and making them available at a place, time and
uantity that enable the retailer to reach its goals. ,erchandising is perhaps, the most important
function for any retail organization, as it decides what finally goes on shelf of the store.
.C 'ricing:
'ricing is a crucial strategic variable due to its direct relationship with a firm9s goal and its
interaction with other retailing elements. The importance of pricing decisions is growing because
today9s customers are looking for good value when they buy merchandise and services. 'rice is
the easiest and uickest variable to change.
3C Target +udience:
Q&onsumer the prime moverQ
Q&onsumer 'ullQ, however, seems to be the most important driving factor behind the sustenance
of the industry. The purchasing power of the customers has increased to a great extent, with the
influencing the retail industry to a great extent, a variety of other factors also seem to fuel the
retailing boom.
;C Scale of /perations:
;;
Scale of operations includes all the supply chain activities, which are carried out in the business.
It is one of the challenges that the Indian retailers are facing. The cost of business operations is
very high in India.
;E
6. FindingJ Recoendations and 0onclusions:3
The Indian footwear retail market is expected to grow at a &+8" of over ?1< for the
period spanning from ?114 to ?122.
Footwear is expected to comprise about E1< of the total leather exports by ?122 from
over .4< in ?11E%1F.
'resently, the Indian footwear market is dominated by ,en@s footwear market that
accounts for nearly ;4< of the total Indian footwear retail market.
Ay products, the Indian footwear market is dominated by casual footwear market that
makes up for nearly two%third of the total footwear retail market.
+s footwear retailing in India remain focused on men@s shoes, there exists a plethora of
opportunities in the exclusive ladies@ and kids@ footwear segment with no organized
retailing chain having a national presence in either of these categories.
The Indian footwear market scores over other footwear markets as it gives benefits like
low cost of production, abundant raw material, and has huge consumption market.
The footwear component industry also has enormous opportunity for growth to cater to
increasing production of footwear of various types, both for export and domestic market.
;F
7. 1i=liogra%hy:%
www.bseindia.com
www.nseindia.com
www.myiris.com
www.footwearsinfoline.tripod.com
www.bataindia.com
www.libertyshoes.com
www.relaxo.com
www.ibef.org
www.business.gov.in
;4