People delaying footwear purchases due to pandemic, unemployment: Walkaroo MD 

Customers are delaying their footwear purchase from once in six months earlier to once in nine months now due to price hikes brought on by the increase in raw material costs at a time when the pandemic and unemployment have kept customers’ spending power from increasing, according to budget brand Walkaroo International’s MD VKC Noushad. 

The nearly decade-old brand, which made Rs 1,560 crore turnover in FY21, manufactures and sells 1,000 models of footwear across 10-plus categories ranging from Hawai/EVA/polyurethane slippers to sport shoes to formal shoes. But a large chunk of their revenue comes from the affordable mass-market slippers and sandals priced at Rs 250-350 a pair.  

“Raw material prices have gone up almost 50 per cent and we were in a very bad condition… We and other manufacturers were able to increase prices to a certain extent. But we could not pass on the entire amount to the customers because customer income has not increased…At this time, GST has also gone up and it is a financial liability to all manufacturers and distributors. It is also a pain point to the customers,” Noushad told Business Today.  

In January, the Centre hiked GST on footwear priced less than Rs 1,000 a pair from 5 to 12 per cent. But the government did not hike the rate on apparel of the same price bracket. Earlier, apparel and footwear were clubbed together in the same GST slab. 

But the company has been expanding its focus beyond utility footwear to affordable fashion, targeting the youth. Noushad said youngsters even in the deep interiors of India are updated about the fashion and design trends because of the democratisation of information. One of the categories seeing a lot of demand is sports shoes, he added.  “This year, we couldn’t meet the demand because our capacity was low and we are increasing it.” 

Walkaroo makes four lakh pairs of footwear a day from its 20 factories across six states. It employs 6,000 people directly and has 4,500 exclusive vendors. The brand, primarily present in south India with outlets in smaller towns and villages as well as cities, expects to clock in a revenue of Rs 1,800 crore during FY22.  

The lockdowns have been hard on the footwear industry’s sales with the health crisis restraining people to their homes. “We lost out on Rs 200 crore during the lockdowns of April-May due to the second wave of the coronavirus infections.” But the pandemic also curbed footwear import into the country, giving domestic production a boost.  

“Indian footwear quality has improved a lot. We can easily enter the export market in 2-3 years. Besides, many Taiwanese companies want to come to India to set up 100% export-oriented units. It will increase India’s export share and improve the ecosystem and the quality of footwear made in India,” said Noushad.