Bata to tap more multi-brand shoe stores to widen footprint

Bata reaches only 15,000 multi-brand outlets of the 75,000 such organized shoe stores in India.
Bata India has increased the number of product launches to 600-700 per season.

India’s largest shoe retailer, Bata India Ltd, will strengthen its distribution business and expand its reach to multi-brand footwear outlets across India, to reach more shoppers, said a top executive at the local arm of the European shoe company. Bata, which has 1,500 stores, sells brands such as Power, Hush Puppies, and the eponymous Bata here.

Since its entry into India in the 1930s, Bata has built a massive retail network by opening stores in some of the country’s busiest markets, small towns and malls. It reaches Indians living in more than 500 towns.

The company has been stepping up efforts to reach more shoppers via its owned and franchised stores, and its distribution network.

Bata reaches out to only 15,000 multi-brand outlets (MBO’s)—those that sell different footwear brands under one roof—of the 75,000 such organized shoe stores at present in the country. “For us, it is a very small part as of now.... but as we go forward it could be a pretty big opportunity," Sandeep Kataria, the company’s chief executive officer (CEO), said in an interview.

For some footwear brands, such MBOs constitute about half their sales, Kataria said.

“We could be taking baby steps this year. Right now we are putting the solutions, talent, and right assortment in place," said Kataria, who was appointed as the company’s CEO in 2017.

The company has hired executives from fast-moving consumer goods companies over the last six months to bring distribution expertise for this business.

India produces more than 22 billion pairs of shoes every year. These are largely sold through unorganized or local shops and street-side vendors.

However, chains such as Bata, which sold 47 million pairs of shoes in FY18, have benefitted with a consumer shift to branded shoes.

Analysts tracking the company said that while Bata’s large footprint of exclusive and franchise stores will continue to generate the bulk of growth for it, distribution and MBO outlets will add to the sales push. “Competition such as Relaxo has really leveraged that platform. There is no reason Bata cannot do it," said an analyst who did not wish to be named.

Bata’s efforts to push its products to more shoppers come amid an on-going recalibration at the shoe-maker’s business in India.

The shoe brand that for years enjoyed a strong resonance among middle-class households, who typically flocked to its no-frills shops to buy school shoes and basic sandals, lost some of its salience with the advent of foreign footwear chains, home-grown fashion departmental stores, and a consumer shift to more fashionable footwear.

The company has thus, over the last two years, been ramping up its business to appeal to younger Indian shoppers. It has increased the number of product launches to 600-700 per season—Bata follows two fashion cycles in a year. “The range is changing much faster," Kataria said.

Bata has also rolled out marketing campaigns featuring cricketers and Bollywood celebrities and has introduced new collections. It has also been upgrading its existing stores with improved layouts.

“This has resulted in strong footfall and better conversion, visible in the last six months revenue performance," brokerage firm Edelweiss Securities said in a January report. For the third quarter of FY19, Bata’s profit after tax jumped 51% to ₹103 crore.

For the same period net sales were up 15.5% at ₹778 crore. Last year, Bata also said that it plans to add 500 stores in small markets in India over the next five years via a franchise route.

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