Bata India bets on online channels

Statista estimates that the footwear market in India is valued at $7,923 million, and was expected to grow at a CAGR of 9.6% between 2020-2025.

Owing to low footfall and sales in its stores during the pandemic, Bata India is realigning its retail strategy. With digital as the focus, the footwear company is beefing up offerings on its own website, Bata.in, and looking at alternate channels such as WhatsApp to connect with customers. The easing of the lockdown, the company claims, has brought back 60-70% of the footfall in tier II cities and beyond; but in the metros, the footfall is only 20-30% of the pre-Covid level.

Statista estimates that the footwear market in India is valued at $7,923 million, and was expected to grow at a CAGR of 9.6% between 2020-2025. But with the pandemic throwing a spanner in the works, the revenue earned by the footwear sector in India is expected to drop by 10-15% in FY21, according to ICRA.

Road to recovery

Bata India, which currently gets about 6-7% of its sales from online channels, including e-commerce marketplaces and its own website, is targeting digital novices as well as digital natives under its new strategy.

“Some of our core customers are not comfortable on the internet and hence, we have taken initiatives such as setting up mobile shops in apartment complexes for them,” says Anand Narang, VP, marketing, Bata India. The company has rolled out a Bata Chat Shop on WhatsApp that covers 600 of its stores across India, where customers can chat with their neighbourhood store to order products. The company has 1,500 stores in the country, out of which 70% are currently operational.

For the digital-savvy customers, the company has scaled up its inventory and is delivering to more than 1,300 cities. “We had introduced apparel under the Power brand a few months ago in select stores. Now, we have launched it online, too,” says Narang. The Power range contributes about 12% to Bata India’s revenue, while the share of apparel in it is less than 1%.

The focus on apparel aside, the company is also rearranging its product portfolio with an emphasis on casual footwear instead of formal fashion. “We have brought out an easy-to-wash collection that enables professionals venturing out to wash their footwear after returning home, to ensure safety,” Narang adds.

The company is looking at digitisation of its processes to cut costs. This includes connecting more than 1,000 stores to warehouses for inventory optimisation, and becoming a paperless organisation. Narang says the company is also digitally connecting with its franchisees, who can now track their orders digitally.

The marketing monies have also moved to the digital medium. While the company has cut down its overall marketing budget, the share of spends on digital has almost tripled.

The way ahead

Even though the suspension of demand is a disruption in the short term, retail experts say, as the market recovers, consumers will prefer branded products over unbranded ones. It is estimated that organised players command 35% share in the footwear market in the country.

Is Bata’s digital focus a sound strategy? Ankur Bisen, senior VP, retail and consumer products, Technopak, says, “Ramping up alternate channels will eat into the reserves of the company, and hence they should strategise to save cash while trying to tide over this crisis.”

He adds that given the low footfall offline, observing customer behaviour and offering products accordingly will be a big challenge for footwear players.

Pinakiranjan Mishra, partner and national leader, consumer products and retail, EY India, says footwear companies will have to tailor their communication “to convince customers about the relevance of footwear in the current scenario”.

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