Bata India eyes profitability boost on the back of higher sales volume

After registering a 2-3 per cent growth in sales volume, Bata India is expecting a surge in sales of footwear in the coming years as it eyes scaling up its store count and tapping more upcountry markets. The surge, in turn will boost profitability.

In the last fiscal year, the company sold 47.25 million pairs which helped it retain market leadership. It is estimated that around 220 million pairs are sold in India annually, both in the organised as well as unorganised space. Bata has a market share of 21.48 per cent.

“There was a conscious decision to grow sales volume by 2-3 per cent in the past. Now, it is expected to go up”, Sandeep Kataria, the company’s chief executive officer told mediapersons after the company’s annual general meeting here.

According to the company, in the Rs 55,000-60,000 crore footwear market in India, around 50 per cent is unorganised which leaves immense scope for the footwear maker to tap into. Currently, the Indian unit of the Czech shoemaker has a 15 per cent market share in value terms in the organised footwear market.

To further its market share and gain new territories, Bata has been targeting upcountry locations on a franchisee model and is planning to have 500 franchised stores across India in the next five years.

Currently, it has around 1,415 retail stores of which around 150 are franchised. Sales from such stores account for around 85 per cent of its business and the rest comprises of sales from e-commerce channels as well as multi-brand outlets.

Apart from rebranding its existing stores in the metros, Bata has been trying to open around 70-80 stores every year and hopes to retain the momentum for its growth strategy. In the last fiscal year, the company spent Rs 40 crore on store renovation alone. 

Moreover, the company is of the view that the increasing socio-economic power of the youth segment is boosting demand for casual and budget products. The latter is being increasingly sought out on digital platforms. 

Footwear for daily use, especially for women, is another crucial growth driver for the company as it expects the working women vertical to grow exponentially in next four years. 

Reflecting the above changes in market landscape, Bata’s strategy is to emerge as a brand of choice for the 25-35 year segment and transcend the perception of just being a maker of school shoes.