Indian Footwear Industry to Reach Rs 38,700 Crore by 2015: ASSOCHAM.

Growing at a compound annual growth rate (CAGR) of about 15 percent, the Indian footwear industry is likely to reach approximately Rs 38,700 crore by 2015 from the current level of around Rs 22,000 crore, according to a study titled ‘Indian Footwear Industry: An Analysis’ released by The Associated Chambers of Commerce and Industry of India (ASSOCHAM), an industry body. On the contrary, the global footwear market which is growing at a CAGR of about 5 percent is currently estimated at approximately Rs 10.15 lakh crore and is likely to reach Rs 12.34 lakh crore by 2015.

Commenting on the findings of the study, DS Rawat, Secretary General, ASSOCHAM, said: "The domestic footwear market is driven by growing fashion consciousness together with increased disposable income among India’s urban middle class which contributes about 45 percent of overall footwear market making India the second largest global producer of footwear across varied segments after China. Low production cost, abundant availability of raw material, ever-evolving retail ecosystem, buying patterns and a huge consumption market are certain basic features that set apart the Indian footwear market."

The survey also revealed that Indian consumers have become more fashion and brand conscious and due to fast changing fashion trends young professionals tend to update their footwear collection every two to three months and maintain a separate budget of their salary only for shoe shopping. The per capita consumption of shoes in India (number of footwear worn by an individual) is currently about 2.5 shoes per year.

ASSOCHAM interacted with around 1,000 young professionals in the age group of 21 to 30 years to evaluate their footwear purchasing tendencies in 10 cities (100 respondents in each city) namely Ahmedabad, Bangalore, Chandigarh, Chennai, Delhi-NCR, Hyderabad, Kolkata, Lucknow, Mumbai and Pune.

The sample included equal number of male and female respondents with a monthly salary between Rs 15,000 and 50,000. Nearly 40 percent of respondents said they upgrade their shoe collection every 2 months and usually spend about Rs 6,000 to 8,000 every 4 months on branded footwear. Most of the respondents said they manage a separate budget of 10 percent of their monthly salary for shoe shopping. Around 25 respondents said they spend about Rs 3,000 to Rs 5,000 every quarter on shoes while remaining said they spend over Rs 1,500 every 2-3 months to buy new shoes.

Majority of women respondents (60 percent) of the total women interviewed said they buy minimum of two pairs at a time and are more concerned about style and looks than comfort and endurance and are not that brand conscious and shop from local markets more often for the best deal. Nearly 45 percent of men said they prefer buying branded shoes as they are more concerned about quality, price and strength of the product.

Respondents said they shop for shoes from traditional shopping markets, specialty stores, high-end designer stores, retail chains and the branded stores. Changing fashion trends, desire to look good and staying ahead in the peer group were some reasons cited by the respondents to buy new shoes.

India produces nearly 300 crore pairs of footwear annually, exports over 10 percent and accounts for about 15 percent of annual global footwear production which is over 2,000 crore. Driven by larger penetration into tier II and III cities and growing rural market, various premium footwear brands are entering India’s non-metro market which holds enormous growth potential and accounts for about 55 percent of the overall footwear industry. According to the study, Indian footwear market is dominated by men’s segment which accounts for about 55 percent followed by ladies’ and kids’ segement which account for around 30 and 15 percent, respectively.

Nearly 70 percent of the labour-intensive footwear industry in India is in the unorganised sector and employs about 15 lakh people, majority of whom are rural artisans, cottage and household units, while the organised sector accounts for remaining 30 percent and employs over 5 lakh people.

Most of the footwear brands have exclusive outlets and account for about 55 percent of the footwear market while multi-brand retail outlets account for about 30 percent.

In the non-leather footwear segment, there is huge demand for slippers as they are cheap, convenient and suit the needs of the rural consumer as it can be used as a multi-purpose footwear. Rural India accounts for about 60 percent of slippers manufactured in Indian footwear market.

Online shoe shopping is a fast emerging segment in terms of footwear sale and currently accounts for about 8 percent of the overall industry and is expected to reach nearly 20 percent by 2015.

Source : indiaretailing.com