Bata: the affordable shoe company targeting low-income markets
Bata's Aparajitas programme marks an ingenious attempt to get around these constraints. In a reversal of traditional retail models, the family-owned Czech footwear company brings its products to the consumer rather than vice-versa. Bata works with around 3,000 village-based vendors, who market its products door-to-door. Each vendor receives around 10-15% commission for every pair of shoes sold.
To avoid the logistical headaches of rural distribution, Bata runs 54 regional distribution centres around the country. It delivers its shoes to these hubs, from where development charity CARE International – which has partnered the company since the programme's launch in 2005 – collects them. CARE's local representatives then delivers the shoes by motorbike or small car directly to the village vendors.
Bata, which operates in more than 60 countries, has developed a similar retail model in Colombia and Bolivia. Through its Aquarella programme, it works with around 10,000 self-employed salespeople. Instead of selling directly on the doorstep, they provide office-workers and homeowners with a weighty product catalogue. They then take a commission on any orders placed.
Nicole Voillat, Bata's sustainability director, insists that the approach is helping empower the sales representatives on the ground – the majority of whom are marginalised or low-income women. In Bangladesh, for instance, the vendors participating in the Aparajitas (Bengali for a "woman who never gives up") programme take home $80 per month – more than double the minimum wage in Bangladesh.
Commercially, meanwhile, Bata's venture into the base of the pyramid market has led to a "steady increase" in sales, Voillat says. The company's primary focus is on the longer term, however. "It's not a programme that will make us rich … but they [consumers] will remember that Bata reached out to them," says Voillat, who claims its low-income customers are its most loyal.
That strategy has certainly proved true in India, where many of Bata's low-income customers have gravitated into the middle classes over the past two decades. During that transition, they've stuck with the Bata brand. The company now has around 3,500 stores countrywide, giving it the largest market share of any shoe retailer in India.
Of course, physically accessing low-income markets is only half the battle: the price has to be right when the product gets there. Bata knows that. Hence, its base-of-the-pyramid ranges often cost $1 or less.
Much of Bata's affordability strategy rests on keeping its designs simple and its materials economical. The company's low-cost footwear is typically made from plastic, for instance. Another cost-cutting factor is Bata's local production/distribution system. The company has 25 factories around the world, all of which exclusively supply their respective domestic markets, keeping transport costs down.
Additional cost savings come from eco-design measures. All its production facilities are equipped with transparent roofs, for example, thereby omitting the need for artificial lighting during daylight hours. Bata implements tight waste management and recycling procedures too. In Malawi alone, it collected nearly one million used shoes last year.
Providing affordable shoes has huge social ramifications, argues Voillat. The use of plastic shoes can help prevent illnesses linked to parasitic worms such as bilharzia, she says. Shoe ownership is a requirement for many school children too. More fundamentally, Voillat says, wearing a pair of shoes confers basic dignity on a person.