Red Tape eases online access

Mirza International, the maker of Red Tape shoes, leather accessories and readymade garments, has started an online store – an industry first. People can place their orders online and the delivery will be made by courier. What the company saves in retailer margins, it can spend on the courier. If the online customer is not happy with the footwear, he can courier it back free of cost.

It is still early to tell if the initiative will succeed, admits Mirza International Director Tauseef Mirza. (The company was earlier known as Mirza Tanners. The name was changed after it felt people should know it as more than just a tannery.) Customers, after all, always try the shoes before they buy them. What is certain is that the company has launched an initiative to push its brand.

The business logic is simple. At the moment, Mirza International gets 80 per cent of its business from abroad. It supplies to several well-known brands abroad. Red Tape accounts for the remaining 20 per cent. The profit margin on Red Tape is at least 10 per cent better than third-party sale. Hence, the brand push. “In five years, we want to take it to 50 per cent of our sale,” says Mirza.

The premium end of the footwear market, in which Red Tape operates, is worth Rs 1,000 crore per annum. Only about half of it is branded. Of that, Red Tape is a leading player with annual sales of around Rs 80 crore. Clearly, the market is hugely fragmented. More than promotion, says Mirza, what helps sale are price, product and placement. (The company has at one time signed on Salman Khan as a brand ambassador but dropped him subsequently.)

Red Tape shoes start at Rs 2,000 and can go up to Rs 2,600. The sandals start at Rs 1,500. “The moment you cross this price, sale comes down drastically,” says Mirza. In this market segment, he adds, customers buy a new pair of shoes every four months. “So, we refresh our product line every two or three months.” What helps here, say sector experts, is the company’s exposure to the latest international fashion trends from its buyers. The company has designers working for it in the UK, Italy and India. “We have access to between 500 and 600 designs every day,” adds Mirza.

At the moment, Red Tape shoes are available in about 600 multi-brand outlets, 65 large format stores like Shopper’s Stop, Central and Lifestyle, and 37 exclusive company-owned outlets. While the multi-brand shops and large stores still account for a bulk of the sale, the company wants to improve the visibility of its brand through more exclusive stores. “By the end of 2010, we plan to have 100 stores,” says Mirza.

To optimize space utilization, the company has begun to stock readymade garments and accessories like wallets and belts in the stores. These are sold under the Red Tape brand, though they are sourced from third-party manufacturers. Sunglasses, watches and fragrances could follow in the days to come.

Rivals point out that over the years, Red Tape has become a masculine brand. As a result, it does not have a play in the women’s segment. The company had, to be sure, last year introduced a line of sporty footwear or women under Red Tape Girl in some large stores. But it met with limited success.

Indian women, informs Mirza, have still not caught on to branded footwear. Most of their purchase is from the unorganized sector. Though Mirza International supplies high-fashion stilettos and boots to the international markets, the Indian market still largely comprises flats.