Footwear market set to enter Rs 1-lakh crore club in 2 years
Footwear market will grow closer to Rs one lakh crore in next two years, with the highest growth rate among lifestyle products. By 2021, the branded segment will grab half of the market and this will be aided by the faster growth in both organised and online retail.
In 2018, the footwear market was valued Rs 63,520 crore and it is expected to grow to Rs 95,350 crore by 2021. At a compounded annual growth rate of 14.5 per cent, it is the fastest growing category among lifestyle products, finds RedSeer Consulting.
According to RedSeer, branded footwear currently accounts for 44.5 per cent share and unbranded dominates with 55.5 per cent share. However in two years both will have an equal share of 50 per cent as branded will be growing at a CAGR of 19 per cent while unbranded segment at 11 per cent.
The branded segment growth is being aided by the faster growth of both organised retail and online retail. Organised retail with 25 per cent share of the market is expected to grow at a CAGR of 18 per cent and grab 27 per cent of the total pie. Similarly, online retail is growing by 27 per cent and is expected to increase its share from 11 per cent to 15 per cent in next two years. At a slower pace of 11 per cent, the traditional market will lose its share from 64 per cent to 58 per cent.
"Going forward the share of organised retail will further increase with expansion of the brands in smaller towns of the country and entry of new players owing to 100 per cent FDI in single brand retail. In case of online retail, standardization of product, convenience and high share of branded products is driving the growth. Online platforms are exploring private label play and are entering into exclusive partnerships with international brands,' said Pakhi Saxena, head, retail and consumer packaged goods, RedSeer Consulting.
Brands are also launching dedicated product range for online channel to differentiate from offline channel and are using data analytics to grow the business.
Increasing consumption of footwear by women also is an encouraging trend. Women who account for 39 per cent share of the market will take it up to 41 per cent in two years at a CAGR of 16.5 per cent. By then, men will lose their share from 51 per cent to 48 per cent as the growth rate is lower at 12 per cent. Though kids' footwear is growing by 20 per cent, the base is still small at 10 per cent.
Casual footwear, which accounts for 70 per cent market share will continue to outpace other segments at a CAGR of 14.5 per cent.