About The Issuer

Organization Of The Industry

Indian Footwear industry is the second largest footwear industry in the world. Owing to a paradigm shift in the attitude of the society towards those involved in footwear designing and production, and a gradual shift from the labour-intensive techniques used since ancient times to more modern and machine-based production, the Indian footwear industry is poised to rise to the top in exporting footwear in the international arena. India in itself has a huge domestic market, which is largely untapped The Indian footwear industry has witnessed a metamorphosis growth with the advent of new retail brands & formats in the Indian markets. The Industry has grown by leaps & bounds in the last decade with the introduction of new technologies and inflow of investments. The Industry both at manufacturing and marketing sides continues to be fragmented into multiple regions. This is largely because of the large size of the country resulting in local preferences due to the economic, social and seasonal factors and absence of a proper distribution network.

The Footwear industry is serviced by both organized & unorganized sector with 70% of the industry belonging to the rural unorganized sector. In the case of chappals and sandals, use of non-leather material is prevalent in the domestic market. India is a religious country so people prefer to use non-leather footwear. The major footwear production centers in India are Chennai, Ranipet, Ambur in Tamil Nadu, Mumbai in Maharastra, Kanpur, Jalandhar, Agra and Delhi.

The industry is Labour intensive and is mostly concentrated in the small and cottage industry sectors. The organized urban sector, on the other hand has witnessed a sea change with the introduction of new market players and brands. The organized sector operates at a national or regional level in a marketing mix of both Retail & Wholesale. Bata India continues to be the largest manufacturer and marketer followed by the likes of Action, Liberty, Lakhani, M & B Footwear, Paragon, Ajanta, Khadim, Metro, Regal, etc. The utility footwear followed by the daily office or school uniform shoes dominates this market. In the urban markets, national and international brands are fast emerging offering the latest in fashion and comfort at competitive prices and the boom is fueled by the burgeoning retail markets.

India V/s The Rest Of The World

India is fast becoming an attractive destination for technologies and investments from foreign countries. India ranks second among the footwear producing countries next to China due to easy availability of abundant raw material, labor base, large domestic market and the opportunity to cater to world markets demands.

In 1980, world footwear output was $42 billion. By 1995, output was 44 percent higher than in 1980, at around $60.5 billion. The Asian output increased by 424 percent, during the period 1980–1995, compared to the growth of output in the Americas of only 16 percent and in Europe of only 10 percent during the same period. Indonesia was the largest footwear employer after China in 1995. Brazil, the Russian Federation, Romania, and Italy followed. By 1998 India became the fourth largest employer of labor in footwear manufacturing.

Footwear, both leather and non-leather, is the engine of growth. Its global import is about $53 billion. India has only a 1.5% share in this. The Indian footwear export trend has been encouraging and growing annually at 17% in the last three years. From $625 million in 2002-03, it has risen to $856 million in 2004-05. By 2010, footwear export alone would reach $2500 million.

India is at second position after China in the Division of footwear manufacturers, which is in a super league of its own. Our country has a huge export potential but when compared to Brazilian footwear, with its style, colours and contemporary changing fashions, India has still a long way to go, if its poor export performance is to improve, at the earliest over the medium term. In fact, the Indian trade deficit could be partly offset, if footwear imports were to take a quantum leap in the next five years.

Statistical Overview
Key Indicators Of Indian Footwear Industry Are Summarized Below
Units 2001-02 2002-03 2003-04
Production Million Pairs 170.10 178.55 185.81
Export Quantity Million Pairs 49.22 52.05 62.19
Export Value Rs. In million 19,308 20,962 26,073
Import Quantity Million pairs 2.37 2.75 4.54
Import Value Rs. In million 386 414 654
Sales Value Rs. In million 51,000 52,000 53,000

Source: “Industry Market Size & Shares” dated February 2005, Economic Intelligence Service, Centre for Monitoring Indian Economy Pvt. Ltd.