Bata bets on youth appeal, new product mix to spur growth

In a strategy shift, Bata India Ltd is aiming to focus more on volumes and recalibrate its balance between premium and mass segment products to fuel its next phase of growth, Chairman Uday Khanna said today.

"To put it very bluntly, our volumes have not grown because our focus was premiumisation. Therefore, now we have a portfolio where we feel that emphasis will be on both premiumisation and volumes. That will be our next line of growth," he told reporters here, after the company's 85th annual general meeting here.

The footwear major is also betting big on its push for strengthening the brand among the youth, and has drawn up a three-pronged approach towards this endeavour, he said.

"The first thing is design, which we want to make more contemporary. The next is our store decor and the layout and the third is communication through advertisements," said CEO Sandeep Kataria.

As a part of this strategy, Bata has rolled out the 'Red Angela' store concept with a red and white "colour touch format" that is aimed at standardising the Bata brand identity, he said.

The first such store opened in Kolkata earlier this year, followed by Delhi.

The company plans to add around 100 new retail stores and 50 franchisee outlets in the fiscal 2017-18, Kataria said, adding, the aim is to take the franchisee count to 500 over the next few years.

"Revenue will come from the new and renovated stores. The franchisee stores will mostly cater to the tier-II and tier-III cities," Khanna said.

To connect with the youth, the company has recently roped in young actors and sports personalities. It spends about 2 per cent of revenue on advertisements.

Bata India will invest around Rs 100 crore capex in the current fiscal, mostly on rebranding, modernising plants and setting up new stores.

In terms of its digital thrust, the footwear maker is planning to associate itself with more e-commerce players and use in-store technology to hold on to customers.

"As a pilot, we have introduced the 'Bata @ Home' concept, where customers can choose and pay for a product at the store, and get it delivered at home within 48 hours," Kataria said.

It has 130 such stores at present in Delhi-NCR, and plans to expand this to more outlets by the end of this fiscal.

E-commerce currently accounts for 4-4.5 per cent of the company's revenue. The figure will move into double digits "pretty soon", Kataria said.