India Premium

Footwear Market

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Premium Footwear Market in India- Overview

With growing fashion consciousness

among Indias urban
middle class coupled
with large number of
foreign brands introducing new designs
and cults, shoes are
fast becoming a very
important accessory
among the elite class.

Premium footwear market is fast gaining popularity in the Indian market. Earlier, bags were
the entry points for aspirational consumers in
India buying luxury brands. However, this trend
is fast changing and consumers are shifting
towards buying premium footwear.
With growing fashion consciousness among
Indias urban middle class coupled with large
number of foreign brands introducing new designs and cults, shoes are fast becoming a very
important accessory among the elite class.

Over the past few years, a host of luxury shoe

brands have entered the Indian Market. Other
than Bally, recent entrants in this space include
Steve Madden, Paul & Shark and Tods. Also,
brands such as Ermenegildo Zegna, Louis Vuitton, Burberry, Herms, Chanel, Gucci, Salvatore
Ferragamo, Bottega Veneta, Armani, Versace
and Hugo Boss have brought in their footwear
collections into India. Further, even Reliance
Brands has introduced Kenneth Cole in the
Indian market.

India Premium Footwear Market

Market Size and Growth

Figure1: Indian Premium Footwear Market

(Crore INR), 2012-13 to 2016-17

774

594.6
472.4
376
300
240

2011-12e

2012-13e*

2013-14e

2014-15f

2015-16f

2016-17f

Source: Assocham

The premium footwear market in India was estimated at INR 300 Crore in 2012-13 and is expected
to reach INR 774 Crore by 2016-17, growing at a
CAGR of around 26.7% during 2012-13 to 2016-17.
With the factors like increasing disposable income
among urban middle-class, inclination towards procuring branded products and efforts on the part of
luxury shoes manufacturers to introduce Indianisation in designs of the global luxury brands & expand
in the market, the premium footwear market is
expected to witness a growth of around 30% annually in the coming years.

The premium footwear market

is expected to witness a growth
of around 30% annually in the
coming years.

The luxury footwear market in India is dominated

by mens footwear. However, the share of the mens
premium footwear market is coming down. The
share has declined from 70% to 60% over the last
few years as the womens footwear segment which
is currently underleveraged, is becoming a target
market for the luxury brands.

India Premium Footwear Market

Figure 2: Indian Premium Footwear Market

by Category (%), 2012-13

40.0%
60.0%

Mens Luxury Footwear

Womens & Kids Luxury Footwear
Source: RNCOS

Figure 3: Indian Premium Footwear Market

(Billion Pairs), 2012-13 to 2016-17
1.38

1.02

0.75

In volume terms, India produced 2.065 Billion

pairs of footwear in 2012-13 of which the
share of premium footwear was estimated at
20%. Premium footwear market was estimated at 0.41 Billion Pairs in 2012-13 and
is forecasted to grow to 1.38 Billion Pairs by
2016-17, growing at a CAGR of 35.2% during
2012-13 to 2016-17.
The share of premium footwear is expected to
grow to 30% in volume terms, in the coming
years.

0.56
0.41
0.31

2011-12e 2012-13e* 2013-14e

2014-15f

2015-16f

2016-17f

Source: RNCOS

India Premium Footwear Market

Opportunities & Challenges

Opportunities
Foreign Brands seeking collaborations with Indian Players
With the growth in premium footwear market in India, various foreign brands are eyeing India
as a lucrative market. Domestic players can cash upon this opportunity by forming collaborations and providing their expertise of labour intensive manufacturing to the foreign players

Tata International has teamed up with Wolverine Brands of the US to enable the US
manufacturer build base in the Indian market. The JV company plans to kick off with a
chain of stores of CAT shoes, to be followed by a dozen other Wolverine brands.

Opportunity to provide finished leather to foreign players setting base in India

India can use the massive availability of raw materials like hides, skins etc to its advantage by
supplying finished leather to foreign footwear players opening up stores in India, who otherwise have to import the same from other countries at high costs.

Mens footwear dominate premium footwear category

The womens and kids premium footwear segments are underleveraged in India. Thus, players
in these segments have the opportunity to tap this market with new products.

Woodland, owned by the Aero Group, is looking to re-position its sub-brand Woods in
the luxury footwear segment, focusing primarily on womens footwear. Nearly 60% of its
offerings will be for women.

Challenges
International Brands Facing Problem of Getting Adequate Distribution
Many international brands are facing distribution issues, which may have direct effect on the
Indian footwear industry revenues. For instance, recent entrant Skechers of the US is in 200
multi-brand outlets, but is waiting for FIPB clearance to open stores of its own.

High Tax Rates Leading to Higher Prices

Footwear continues to be a highly taxed category. High customs and excise along with local
duties like octroi and VAT lead to almost 35% of the sale price of the footwear.

International players facing restraints in entering the market on their own

stream
Despite the opening of single-brand retail and 100% foreign direct investment allowed in the
segment, none of the luxury footwear brands have opted for this route, though the interest is
high. Although many luxury brands are keen to enter on their own stream, the 30% sourcingfrom-India norm is acting as a deterrent for them, so they end up coming through the joint
venture route.
India Premium Footwear Market

Latest Developments
Over the past few years, many premium brands have entered or have plans to enter into the Indian
market through various routes.

Premium Italian Luxury Brands eyeing India

July 2013: Furla, has sought governments approval to operate single-brand retail outlets through a
51:49 joint venture with Gurgaon- based Genesis, which currently runs two Furla stores as a franchisee
and plans to open a third one in either Kolkata or Bangalore. The joint venture plans to invest about INR
13 Crore in the first 4 years to open stores, with Furla bringing in INR 6.6 Crores.
Source: Footwear Times

May 2013: High-end and super-expensive Italian shoemakers are looking at India as a replacement
for their production base in Europe, increasingly a high-cost location for them. These brand manufacturers are also scouting for local partners. Some of these are leading brands such as Baldinini, LORIBLU,
Giovanni Fabiani, NeroGiardini, Janet & Janet, FABI and Fratesi. They are looking at more and more joint
ventures and collaborations with Indian producers because Indian industry gives them the volume that
these companies are looking for.
Source: Business Standard

April 2013: Premium Italian footwear brand Geox has entered into a retail and distribution arrangement with Delhi-based G&B Footcorp to set up its mono brand stores. G&B Footcorp has set up three
stores and plans to add two more stores in the current fiscal year. It also plans to have at least 20 stores
in next three years.
Source: The Hindu Business Line

Foreign Brands on an expansion spree through increased investment in

the Indian Market
August 2013: Pavers England plans to expand its base in India. It is planning a further US$10 Million
investment within the next 12-18 months on top of its US$10 Million already invested in buying out its
franchisee.
Source: InsideRetail.Asia

May 2013: Woodland, owned by the Aero Group, is looking to re-position its sub-brand Woods in
the luxury footwear segment and is planning to invest about INR 60 Crore to unveil a string of 30 small
boutique stores in high-end shopping malls across the country in this financial year.
Source: Yahoo Finance

May 2013: Ruosh which is in the mens premium footwear space is planning to take its store count to
20 in 2013. The brand currently has eight stores across Bangalore, Mumbai, Chennai and New Delhi.
Source: FashionUnited

January 2013: C&J Clarks International has plans to expand the number of standalone stores in India
to 100 in the next 5 years.
Source: Franchise Mart

India Premium Footwear Market

Future Outlook

Global premium footwear brands are queuing up for an entry into the Indian market. These brands are
more than enthusiastic with the approval of 100% FDI in single brand retail. This category will be seeing
lot of action in the coming days with several brands entering the market. Some of them have been relying on licensing or franchising, while other have formed partnership with leading business houses.
Brands like Steve Madden, Timberland and Kenneth Cole have partnered with Reliance, Wolverine with
Tata, and Clarks with Future Group. The brands that are doing the groundwork to enter the market
include French brand Mephisto and the US sports shoe brand Airwalk.
The share of premium footwear is expected to increase in India in the coming years, with premium
footwear players looking for setting up base in markets having potential for growth, to beat the losses
in stagnant markets like Europe. Having a distribution partner or a franchisee in the initial years will help
the brand to set up a base in the market. But once they understand the market, they may also opt for
retailing on their own. The brands can also meet the sourcing clause by sourcing footwear fully or in
parts from the Indian markets.
Moreover, the number of ultra high net worth households in India is expected to increase from 1,00,900
units in 2012-13 to 3,29,000 units in 2017-18, with their net worth increasing from 86,00,000 Crore in
2012-13 to 380,00,000 Crore in 2017-18 . This, will give a boost to the total spending on luxury items
like footwear in the Indian market.

India Premium Footwear Market

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India Premium Footwear Market

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