Financial crisis makes footwear makers tap local mkt

Manufacturers in Tamil Nadu plan to launch their own brands.

The global financial crisis is making the footwear manufacturers in Tamil Nadu turn domestic. The manufacturers in the traditional leather belts of Chennai, Ranipet and Ambur are now planning to tap the domestic market with their own brands.

The recent financial turmoil in the export markets like the US, which accounts for 30-35 per cent of the total exports from the state, has created uncertainty in the export orders. Moreover, prices too are no longer attractive for the export items, the industry feels.

The state’s share in the domestic market is only 3 per cent, whereas in exports this stands at 45 per cent.

“Domestic market offers equal opportunity in terms of value. There is a vast untapped potential,” says M Rafeeque Ahmed, chairman and managing director, Farida Group, and All India Skin and Hide Tanners and Merchants Association president.

According to him, leather exports from the country increased 13.67 per cent to $3.47 billion in 2007-08 over the previous year.

Speaking about the potential in India, S Sivasankaran from Ranipet, says that the per capita consumption of footwear in India, which is 0.5 pairs, is likely to increase with the rise in middle-class population.

While acknowledging the need to tap the domestic market to expand the industry, a Chennai-based analyst says the problem facing the industry is the absence of an organised distribution channel.

The growth of the footwear industry is closely linked to the textile industry. In India, though there has been a lag, the gap is closing. With people spending more on clothes and more international brands coming to India, the spend on footwear too has increased significantly, opines Ahmed.