Post by Admin
August 31, 2016
An Industry Overview by Team EBS
India is the second largest global producer of footwear after China, with a domestic footwear industry estimated to be about INR 20,000 crore.
With changing lifestyles and increasing affluence, domestic demand for footwear is projected to grow at a faster rate than has been seen. There are already many new domestic brands of footwear and many foreign brands have also been able to enter the market.
The footwear sector has matured from the level of manual footwear manufacturing methods to automated footwear manufacturing systems. Many units are equipped with In-house Design Studios incorporating state of the art CAD systems having 3DShoe Design packages that are intuitive and easy to use.
Few Interesting Facts about Indian footwear industry
- The Indian footwear retail market is expected to grow at a CAGR of over 20 percent for the period spanning from 2012 to 2016.
- Presently, the Indian footwear market is dominated by Men’s footwear market that accounts for nearly 58% of the total Indian footwear retail market.
- By products, the Indian footwear market is dominated by casual footwear market that makes up for nearly two-third of the total footwear retail market.
- As footwear retailing in India remain focused on men’s shoes, there exists a plethora of opportunities in the exclusive ladies’ and kids’ footwear segment with no organized retailing chain having a national presence in either of these categories.
- The footwear component industry also has enormous opportunity for growth to cater to increasing production of footwear of various types, both for export and domestic market
Strengthening factors for footwear industry’s growth
The Indian Footwear Industry is gearing up to leverage its strengths towards maximizing benefits.
Strength of India in the footwear sector originates from its command on reliable supply of resources in the form of raw hides and skins, quality finished leather, large installed capacities for production of finished leather & footwear, large human capital with expertise and technology base, skilled manpower and relatively low cost labour, proven strength to produce footwear for global brand leaders and acquired technology competence, particularly for mid and high priced footwear segments. Resource strength of India in the form of materials and skilled manpower is a comparative advantage for the country.
The footwear industry exist both in the traditional and modern sector. While the traditional sector is spread throughout the country with pockets of concentration catering largely to the domestic market, the modern sector is largely confined to select centres like Chennai, Ambur, Ranipet, Agra, Kanpur and Delhi with most of their production for export.
Challenges in Indian Footwear Industry
- Largely unorganized and scattered in different parts of the country. Biggest market being Uttar Pradesh and Tamil Nadu.
- Most of the production is still handmade. We have not been good or open about accepting new technologies in manufacturing shoes.
- Highly dependent on skilled artisans. This is a worry as the new breeds of artisans are not willing to join and work in the manufacturing segment.
- Working conditions are bad to horrible in most places. Workers are exploited, paid less and no protection or security under any law. This is also one of the reasons that is stopping new artisans to join the industry.
Solutions to overcome challenges
For the Indian footwear to explode and deliver following should be initiated expeditiously no later than now:
- favourable government policies
- removal of high doses of taxation
- infrastructural support in capacity building
- skill education and technology up gradation
- brand building exercise