Bata to grow footprint in smaller cities via franchise route in 5 years

Monday, April 30, 2018

Footwear brand Bata India Ltd has identified 435 small cities in India for retail expansion through franchising over next 3-5 years, Bata Group chief marketing officer Thomas Archer Bata said, in a change for the company that owns and operates most of its outlets in India. "Bata is a mass brand, and we need to strengthen our presence beyond the top towns. These 435 cities are essentially tier-II and tier-III cities where we would want to be accessible to consumers across the secondary towns," Bata said.

The company will add 80-100 stores every year. The retail push through franchisees, said Bata, would help the Indian unit of the Czech shoemaker reach its goal of $1 billion (around Rs6,675 crore) in five years. Bata India's revenue stood at Rs2,497 crore in the year ended 31 March 2017. The company is yet to release earnings for the year ended 31 March 2018. Once it reaches the $1 billion target, India will be the largest market for Bata. "At present, it is the second largest and about 20% behind Italy where it sells around 57 million pairs of shoes a year," Bata said.

While most of around 1,500 Bata stores in India are owned and managed by the company, it has franchising options across 40 countries. "We have about 150 franchised outlets in India. It is an asset-light model that fits well with small cities and can be expanded faster," added Bata. Besides new stores, the company is redesigning most of its stores with specific focus on a particular category like sports, or women, or youth and even school shoes. "Still Bata outlets are family stores. We have loyal consumers but we have limited acceptance among the younger generation. We need to catch their attention," added the Bata scion, also adding that women's shoes would be a focus category for Bata in India. At present, women's shoes account for around 40% of Bata sales in India which the company wants to go up to 50% in 3 years. "The potential of the segment is huge. This is one segment that's going to grow much quicker," said Bata.

According to Bata, the company has done very limited marketing during the past few years. "That's going to change. We are having Indian celebrities to be associated with our brands on a long-term basis. Focus on digital media for marketing and rebuild our image that the younger generation would connect to," said Bata.

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