India’s largest footwear retailer Bata is betting big on the country’s non-metro markets as it undertakes an ambitious expansion plan, cautiously transitioning from its traditional stronghold of physical stores into the terrain of ‘phygital’ to power up the growth. Bata India CEO Gunjan Shah, who took charge in May last year, exclusively spoke to Inside Retail about the company’s strategy to expand its retail footprint, tweak its product mix and categories and meet consumers’ changin
ging needs. Alongside its distribution arm and multi-brand outlets, Bata is set to tap the franchise model to quickly ramp up its sales as it aims to penetrate India’s smaller cities, where the population is between 50,000 and 300,000. Bata opened between 20 and 30 stores every quarter last year, which it plans to continue into the next year. “The rise in disposable income has led to aspirational changes and increased brand awareness among non-metro markets. Our focus is to expand and reach the first-time Bata buyers and the early-stage branded product adopters,” said Shah. Industry estimates say India’s per capita footwear consumption is roughly about 1.7 pairs annually, compared to six pairs in developed markets. This means a vast market remains untapped. Physical + digital = phygital Bata, as a legacy brand, holds a unique position in Indian households operating for over 90 years and has singlehandedly redefined the modern footwear industry in the country. The brand sells about 47 million pairs of footwear annually to people of all ages. “There has been a return to normalcy with schools, colleges and offices reopening that is bolstering the industry growth. The market has been buzzing with words like ‘lockdown fatigue’ and ‘revenge shopping’,” said Shah as Bata recalibrated its strategy to boost its digital presence during the pandemic. He added: “In order to maintain pace with the latest consumer trends, we have to constantly evolve our phygital activations to better connect the consumers with the brand, its launches, and other experiences.” Adopting a four-pronged digital strategy – website-driven sales, home delivery options, B2C online platforms and B2B channels – the footwear giant is essentially entering an unknown terrain where it has not tried its hands. Bata hopes digital sales outpace its overall growth soon in the foreseeable future. Scripting a comeback is not something new for Bata. When hit by serious labour issues and intense competition from rival brands, the shoemaker has emerged only stronger in previous years. Across India, no less than 120,000 customers purchase a product in one of Bata’s 1,600 stores every day. About 15 per cent of the stores are operated through a franchise model while the rest are exclusive Bata-owned retail outlets. Without specifying the exact numbers of the digital growth, Shah said: “Contributions via digitally-enabled channels as a percentage of overall revenue have increased and therefore, we have expanded our presence in Google shopping feed and social commerce presence across platforms such as Instagram.” Another innovation by the shoe major is the introduction of endless aisle, where customers can scan QR codes in-store and then check multiple styles to get them home-delivered later. In the Indian financial year ending March 2022, Bata clocked about 24 billion INR ($387 million) in revenue registering an impressive growth when the world was crawling out of the pandemic. The rise of sneakerisation What drives the increasing sales numbers is casual wear and sneakers which account for nearly a quarter of Bata’s figures. Though the sales of formal and fashion categories have recovered last year, it is the sneakers which have led the sales. “As the world begins to bounce back after the Covid-19 crisis, we observed rapid shifts with long-term implications in consumer behaviour. Post pandemic, casualisation has become a dominant trend. This is because consumers are gravitating more towards footwear that provides them comfort and round-the-clock solutions beyond fashion,” observed Shah. Shah expects the sneakers category to continue driving growth in the coming year as well. Besides footwear, Bata has been offering various accessories such as bags and belts but footwear remains the mainstay. Over the years, Bata has transitioned into a fashion-forward trend from being a functionality-focused affordable brand. For long, its best two segments remained school shoes and formal footwear. And these two were badly hit segments during the pandemic – right in the middle when Shah took charge. “Keeping up with the sneakerisation trend, we are focusing on enhancing our casual portfolio and sneaker range. We have strengthened the sneaker portfolio by launching over 100+ Sneaker Studios,” the top executive said. Bata’s Sneaker Studios is a one-stop solution to all occasion-specific consumer needs in the form of a sneaker wall, displaying about 300 styles of various brands. Young brands like North Star, Hush Puppies, Red Label and Power have been brought into the front of the stores to pull consumers into the sneakerisation trend. “Our intent as a brand is simple; to continue offering versatility beyond functionality to modern consumers,” said Shah.