Bata India eyes 35% revenue contribution from women's footwear
"In the organised footwear segment globally, women's category dominates the portfolio of any company, but it's not the same for us in India. Revenue contribution from sales of women's footwear is just 26 per cent and we are trying to increase it to 35 per cent", the company's chairman, Uday Khanna said in Kolkata on the sidelines of the company's annual general meeting (AGM).
The men's footwear category contributed 50 per cent of the company's Rs 2,544 crore topline, while children's footwear contributed 15 per cent and accessories accounted for an estimated Rs 127 crore revenue at five per cent.
The company, besides introducing more designs and in-shop experience to attract sales of women's footwear, is also betting on an aggressive advertising campaign to push up sales in this category and will be allocating more funds on advertising and promotions of women's footwear. However, company officials declined to comment on the amount allotted to advertising.
The company's last promotional campaign targeted at the women audience had met with sharp criticism from a section of the society. Khanna, however, has taken the criticism with optimism. "It implies that we are getting noticed," he said.
Apart from the focus on increasing revenue contribution from women's footwear, Bata India is also betting on premiumisation of products and has come up with a design and research & development centre in Gurgaon to roll-out trendy as well as comfortable footwear.
Although Khanna, while responding to a shareholders' query stated that it is unable to match the competition from China in this process, the company will keep on focussing on local sourcing of premium products from India. However, for the premium range, which is mostly leather-centric, Bata India will be using imported leather from Brazil apart from other sources.
While shoes within the Rs 500 bracket accounts for 35 per cent of the company's revenue and 50 per cent of volume sales, the Rs 500-1,500 price bracket accounts for 25 per cent of sales and the rest of the annual topline comes from the bracket starting from Rs 1,500 a pair.
Besides, although the company will continue to invest Rs 200-250 crore each year to add 100 company-owned stores per annum, it is also keen on expanding its business in the upcountry by adding 50 stores with franchise partners. Typically, setting up a direct company-owned outlet costs between Rs 2-2.5 crore, while the same through a franchise partner in tier-2 and tier-3 towns costs Rs 50 lakhs. On the contrary, revenue from the franchise stores accounts between Rs 0.7-1 crore every year.
Managing Director Rajeev Gopalakrishnan said that Bata India will also be strengthening its institutional sales and is building a separate team to increase its exposure under this category. Currently, institutional sales account for 3-5 per cent of the consolidated sales.