‘India will have strong foothold in global footwear market’
China is the global leader in footwear with a 67 per cent market share, and India is a distant runner-up. V Naushad, Vice-President of the Confederation of Indian Footwear Industry and Managing Director of the ₹1,100-crore VKC Group, says that India can catch up with China and capture the international market in a few years by taking advantage of the price escalation of Chinese footwear. In an interview with Business Line, Naushad talks about the upbeat mood in the sector, how Kozhikode became a hub without any natural advantages and the huge potential for exports.
Why this boom in non-leather footwear sector?
India’s economic progress stepped up the demand. People who not afford footwear started using sandals and chappals. Raw materials such as PVC and PU (polyurethane) brought the footwear prices down. There has been a revolution in footwear designing which made wearing branded sandals a fashion statement. Adoption of new technologies and use of mass-production imported machinery helped jack up production.
How did Kozhikode became a major manufacturing centre?
It just happened. In fact, we had no raw materials, no skilled labour and no tradition of footwear making. But there was a lot of entrepreneurial talent and Kozhikode had a culture of small industries such as tiles, match and plywood. Back in the 1980s, many of these traditional industries started sinking. To an extent, it was from the ruins of these traditional industries that the footwear sector emerged.
When my father’s plywood factory closed, he turned the premises into a small footwear manufacturing unit in 1984. The VKC was the first footwear unit in the area. It grew steadily and its success inspired others to open new units. A lot of young, educated people took the plunge, too. I, for instance, left my PhD programme in polymer science at IIT Madras to help my father build up the VKC.
Was there a defining moment in the rapid growth of Kozhikode as a hub?
In 2006, the Kozhikode manufacturers organised a footwear exhibition-cum-technical seminar. Many foreign machinery makers, designers and importers attended the event. It was an eye-opener. We were exposed to new machines, international designs and the huge potential of exports, especially in the Gulf and African countries. The fair made us look beyond the Kerala market, import modern machinery from Taiwan and adopt many European designs. It inspired us to think global. We also realised the importance of branding. We now organise footwear fairs regularly.
Any other factors that contributed to the growth?
The team work among the manufacturers had a lot to do with the success of the sector. The Kozhikode people have a tradition of team work and cooperation. There is an eco system here that fosters growth — the Kerala State Small Industries Association, the Government agencies, politicians, the footwear design centre, the skill-development programmes are all part of it. There are 150 manufacturing units and 500 ancillary units around Kozhikode. Most of their workers are migrant labourers, mainly those from West Bengal and UP. Many Kozhikode-based companies have units in Tamil Nadu, Karnataka and Andhra Pradesh which facilitate smooth production.
What is your marketing strategy?
We have an effective strategy of brand consolidation and strengthening which helps our marketing. Many small companies join together to promote a mother brand. We have 24 independent units producing for the mother brand VKC. VKC had nine brands which has now reduced to three. This is an example of the team work in Kozhikode. Odyssia, Paragon, Lunar, Nexo and Tenzo are some of the other major mother brands.
How do you see India’s export potential?
Now is the time for India to go aggressive on the global footwear market and seize the opportunity to become the best. China’s USP is low price, but the recent spurt in production costs, especially wage cost, has pushed up the prices of their products. Compared to China, Indian footwear sector has several advantages now: one, while Indian rupee continues to depreciate, the Chinese currency has fast appreciated against the dollar, making Chinese footwear more expensive; two, production costs are lower in India; three, Indian designs are more attractive and four, we have the capacity to meet global demand. So, I would say “Now is India’s time.”