Indian Footwear Industry

2nd largest footwear producer in world

The size of Indian footwear market is around 26300 crores and
expected to reach Rs. 38700 crores with a CAGR of 15% by 2015

Indian footwear retail is mainly an unorganized market with around
60% market share

At present, Men's contribute around 60% of footwear market against
Women's share of 30%

Men's market is growing at a CAGR of 10% & Women's market is
growing at a much faster CAGR of 20 %

More than 4000 manufacturing units in footwear(most of them are
small scale-55%)

The non-metro market accounts for nearly 55% of the overall footwear
industry
SWOT Analysis
Strengths
• High growth
• Availability of labor
• Large raw material base
• Continuous focus on Product
development and design upgradation
Opportunities
• Abundant scope/ Rising potential in
the domestic market
• Growing fashion consciousness
• Use of IT and decision support
software to reduce length of
production cycles
• Product diversification
• Use of e-commerce in direct
marketing
Weaknesses
• Less number of organized
product manufacturers
• Uneconomical size of
manufacturing units
• Poor supply chain
Threats
• Entry of multinationals
• Ephemeral fashion trends
• Increasing inflation is
considered a threat which
would increase overall input
cost, as well as, conversion
costs
• Relaxing FDI limits in retail
may bring in more
international competition
Major Brands

Low cost comfortable slippers

Relaxo’s most exclusive brand for women

For men, women and kids

Also available for kids

Available in different shades and designs

Price range ₹130- ₹360

Relaxo is the largest producer of Hawaii
slippers in India

“Fashionable and Lite”

Price range ₹70- ₹115

“Mazbooti Bhi, Style Bhi”
Major Brands

Targeted towards youth

School Shoes

Shoes, sandals and slippers

Price range ₹200- ₹500

Sporty looks and durable

Price range ₹600- ₹2950
Recently Launched

Targeted towards kids

Leather footwear for men

Shoes and sandals

Sophisticated look and comfort

Price range ₹400- ₹600

Price range ₹800- ₹3000
Promotions
Advt & Publicity Cost (Rs. Lakhs.)
Advt & Publicity Cost
• Signed Salman Khan for
“HAWAII”, Katrina Kaif for
“FLITE” and then Akshay
Kumar for “SPARX”
• Relaxo has experienced a
record-breaking growth rate of
4800% within the last 10 years
5507.62
2961.77
2084.83
2482.38
• The cost on promotion went
up to 5507.62 lakhs in 2012-13
from 2961.77 lakhs in 20112012
2010
2011
2012
2013
Online Presence
Online Store
Facebook
Has a Facebook page
https://www.facebook.com/r
elaxofootwears
Has own online shopping portal
as
http://www.shopatrelaxo.com/
•
Approx 125,000 likes
•
Showcases new products
with price and offers, if
launched
•
Online sales in footwear
industry accounts for
approx. 8 % of sales
•
Advertisement done to
attract targeted
customers
•
Properly segmented (For
him, For her, For Junior)
•
Reviews help customers
in their discretion

Good distribution network. Present even in smaller villages
Sales
10%
Multi-brand
retail
Self-owned shops
90%

Most of their business (~90%) comes through distributors with
excellent terms

Aggressive ground presence with 150 exclusive company owned
retail stores and 50 more opened in FY13
Retail Chain

Company-owned stores, 'Relaxo Retail Shoppe', are more from
image building exercises and helps the dealer/retailer network

Company relies more on distributor-retailer network for sales

Besides it sells footwear by means of e-commerce operationswww.shopatrelaxo.com
FY 12
149
Stores
under
operation
Revenue 0.40 Cr
Per Store
FY 11
127
FY 10
100
FY 09
79
FY 08
60
-
-
-
0.26 Cr
Differentiation
Segmentation
Relaxo footwear has the following
differentiating advantage over the
competition:


Relaxo consistently lives by and
upheld its quality and customer
satisfaction

Produced state of the art
footwear at very low cost price

The entire market can be
segmented on the basis of Age,
Gender and Price
Caters to the demand of the
Age
Gender
Price
Kids
Male
Low(<300)
Youth
Female
Medium(300-2000)
middle income groups without
compromising on quality
Adults
High(>2000)
Targeting

Based on the Segmentation following Brands of Relaxo Footwear target the
segments
Age
Kids
Brand
Hi-Fashion Kids,
Flite Kids,
Schoolmate
Youth Sparx, Elena, Flite
Hawaii, Flite,
Casualz, Sparx,
Adults Boston
Gender
Male
Brand
Hawaii,
Sparx
Flite, Mary
Female Jane
Price
Brand
Low (<300)
Schoolmate,
Hawaii
Medium
(300-2000)
Sparx, Flite,
Casualz,
Boston
High (>2000) Sparx
Positioning

Relaxo Footwear tries to cater to the demand of all the
consumer bases and hence it has tried to position in all
the segments through various brands

It positions its brand Hawaii and Schoolmate as a value for
money product

Also its Sparx range go footwear is perceived as a high
quality, durable and value for money product

Flite and Elena are considered to be fashionable, light and
comfortable by the Women customers
Financials
•
•
•
India is the world's second largest footwear producing country
Per capita footwear consumption is 2.5 pairs per year in 2012
Size of Indian footwear market is around 26300 crores and
expected to reach 38700 crores with a CAGR of 15% by 2015
Financials
•
At present, Men's contribute around 60% of footwear market
against Women's share of 30%.
•
Indian footwear retail is mainly an unorganized market with
around 60% market share.
•
The size of the organised sector which was around 7500
crores in 2010 increased to 10000 crores in 2011, growing at
a CAGR of 30% every year since 2008.
•
The market is expected to reach 17500 crores by 2015
growing at a CAGR of 19% p.a.
Financial Analysis

Company has sold 10.02 cr. pairs of footwear in 2012-13.

Sales turnover has reached Rs. 1004 cr.

Company has posted net profit of Rs. 44.8 cr.
Competitor Analysis



Relaxo competes with various local brands
like BATA, Action, Liberty, Lakhani etc.
Bata being a major competitor in term of
market share due to high reliance on
outsourcing work to outsider and high asset
turnover ratio.
Relaxo is meeting the competition by
capacity increase (which is leading to high
asset turnover ratio) and focusing more on
non hawaii chappal business and is getting
focused to urban market.

It is largest producer of hawaii chappal in
north India.

The company has recently appointed
Accenture to advice on the business
strategies and systems in order to enhance
its marketability and reach to the consumers
BHARTIYA CREW B.O.S
6%
6%
LIBERTY
8%
BATA
42%
MIRZA INTL
14%
SREELEATHERS
1%
RELAXO
23%
BATA
RELAXO
SREELEATHERS
MIRZA INTL
LIBERTY
BHARTIYA
CREW B.O.S
Comparison with Competitors
Company
Market Cap. Sales
Net Profit Total Assets
Bata India
6,138.80 1,842.45
171.6
700.33
Relaxo Footwear
1,407.74 1,009.83
44.81
419.32
Sreeleathers
749.62
53.46
6.89
181.07
Mirza Intl
247.99 634.13
43.44
405.69
Liberty Shoes
203.54 339.11
7.17
257.63
Bhartiya Inter
180.78
247.3
8.3
233.82
Amounts in Rs. crore
Marketing Objectives

Try to match or beat Bata to become No.1 player in Indian Market.

Try to influence people to have different set of footwear for each purpose
rather than a single pair for all occasions

Focus on selling Good Quality shoes at Affordable Prices

Shift focus from just North India to expansion across all parts of India –
strengthen distribution network

Increase sales through

Stronger distribution network

Expansion in Foreign Markets like Africa

Communication of Product Benefits compared to unbranded footwear

Better variety and design of products
Hawaii King

Relaxo is the largest manufacturer of hawaii chappals in
India

It has a huge market in rural areas

Price in the range of Rs 70- 100

Cheap and very robust
Introduction of Safari Range of Sandals

Relaxo should enter into low
cost sandal market

Sandals are also a hit in the
rural areas

Market dominated by local
players

Relaxo being a trusted brand
has huge growth potential
Complete
Support
Better
grip over
any
surface
Easy to
wear
Less
strain on
feet
Segmentation
Targeting
Positioning
Urban
SemiUrban
and
Rural
Niche
• Design
• High quality
• Durable
• Strong
• Low price
• High quality
• Latest trend
• Design
• High quality
Segmentation
Targeting
Positioning

Relaxo has already targeted the urban segment with its
SPARX brand of sandals

70% of the Indians live in rural areas

The target customers are poor and middle class people
living in rural areas

There is very high brand loyalty in rural areas
Segmentation
Targeting
Positioning

Points of difference: performance(durability) high
strength, use in any weather and cheap

Points of parity: easy to wear and use

Brand mantra: “Majbuti bhi, Style bhi”

The main means of differentiation is by
a.
Channel differentiation: Effective and Efficient
distribution channel
b.
Image differentiation
Marketing Mix
Product
Price

Colours black & brown

Rural market is very price sensitive market

Design will cover most of the feet

The price should be maintained under Rs.250

Available in standard sizes


Warranty period of 3-6 months
Due to large scale of production and good
distribution system these prices can be
easily targeted
Promotion

Posters of Brand ambassador Salman
Khan with the sandals to be put at easily
visible areas



Place

Using its strong supply chain network of
hawaii chappals for supplying sandals
TV and Radio commercials

Training and motivating channel members
Special promotional events during
festivals

Avoiding channel conflict

Make them available at all major footwear
stores in this areas
Active promotion during school events
harvesting season
Schoolmate

Schoolmate is the children’s shoes brand ranging from Rs 200 – Rs 500

It includes school uniform shoes for boys and girls

White tennis shoes for children are also a part of this brand

The focus of Schoolmate is to provide comfortable shoes for the
tender feet of children
Suggestions
Target the semi-urban markets
Product

Sturdier shoes with more durable soles to suit the semi-urban environment
Promotion

Hoardings, TV and radio commercials

“Har Student Ka Dost”
Place

Retail outlets in the vicinity of all schools will sell Schoolmate shoes
Price

Keeping the price at Rs 100 – Rs 200 to penetrate the semi-urban market

Bulk Discount to Schools
Boston

Relaxo brand that includes formal leather shoes, loafers,
sandals and party wears

Lesser promoted brand of Relaxo

High value product targeted to the middle and higher
income groups

Has wide variety of products, a type for each occasion
Boston – Marketing Plan

Increase awareness among the target audience by using promotional activities

Price – Rs. 700-2500

Positioning - “A shoe for every occasion”

Promotion - Advertisement showing Salman Khan starting day in office in
formals, evening meeting with friends in Loafers and end day in Party Shoes
at a party.

Place – Tier 1 and Tier 2 cities
Mary-Jane
DSTP
Segmentation and Targeting

Age group (21 to 45 years)

Location (Tier 1 and Tier 2 cities)

Income levels (middle and upper
class)

Occupation (working women and
housewives)



Professional women – shoes for
workplace and leisure
Housewives - fashionable but
more casual shoes
Target women who buy unbranded
footwear from street shops
Differentiation

Look and Feel of a designer brand
at lower price

Branded Footwear with emphasis
on quality and durability
Positioning

Every woman’s choice

A shoe for every occasion
Marketing Mix
Product

Unmatched, extensive selection of
different shoes

Accessibility

Professional customer service

Competitive pricing
Place

Retail stores

Factory outlet stores

Online/E-Commerce
Price

Price range Rs. 700 – 2500
Promotion

Radio, TV, Print Advertisements

Social Networking Websites

Women Fashion Magazines

Create Radio Jingles for spreading
awareness of the product

Association with a celebrity – Katrina
Kaif
Suggestions


Retail commissions are very low, so many shops do not want sell Relaxo
footwear.

Should focus more on Sparx and Flite brands which are more preferred
products by the distributors.

Focus more on fastest selling SKUs

Spend higher on commissions and offer better credit terms to retailers
Over-concentration in North India markets - RFL sells almost 65% of its
products in the north Indian market thereby creating a very high dependence
on the states of north India wile leaving a large market untapped.

Company should expand distributor–retailer network to South, East and
West India

Over 50% of the retail shops have managed to break even while the
remaining continues to make losses.

Should pursue a good mix strategy of few self-owned and franchisee
models, to minimize risk and share risk with partners

Focus on increasing presence in multi-brand retail outlets that has
presence in malls and high street stores

Should expand its self owned stores throughout India.

Stores should focus more on spreading brand awareness in addition to
improving sales

In order to shift focus to parts other than North India, increase the sales
force to cover all regions of India. 3rd party field force can be used for
faster implementation of sales expansion strategy

Improve exports in countries in Europe, Africa and other Asian countries
Drive Online Sales

Online shoe shopping currently accounts for about 8% of the footwear
sales in India and is expected to reach about 20% by 2015.

Relaxo’s online sales are limited to shopatrelaxo.com.

Majority of the online shoe shoppers buy from Myntra.com,
Jabong.com, Yebhi.com, etc. that sell shoes from various brands.

Relaxo Footwear should thus also be available on these websites which
would improve visibility and drive sales.

Relax Shoppe are only present in 9 states and thus online presence will
boost sales from areas currently out of reach.