Bata is easily one of the biggest comeback stories in the retail segment. After a spell of flat topline and depressed bottomline a decade ago, the company, which owns the iconic brand, bounced back improving its footwear collection, upgrading its manufacturing facilities and opening new large format retail outlets while shutting down unviable ones. Its key priorities now include expanding its presence in existing markets while panning out to Tier-II and Tier-III markets.
Rajeev Gopalakrishnan, Group Managing Director, Bata Emerging Markets, Bata India Ltd., shared his views in an email interview to The Hindu.
How did the company achieve this comeback and what sort of competition did it face and in which segments?
Bata has been holding a unique place in the hearts of Indians for more than 83 years. It has redefined the modern footwear industry in India and has established a leadership position in the market and is the most trusted name in branded footwear market.
With a strong historic presence attached to it, it has made sure to touch the lives of Indian consumers, giving them beautiful memories to relate too when reminded of the brand.
Its history is so deep rooted within India that majority of the Indian population considers it to be a local brand rather than a global brand.
Bata has always lived up to the expectation of its customers and the same has been observed in the product portfolio that is offered with constant customization. The consumer of today is very well travelled and is conscious of the choices made.
To cater the same, the brand has always indulged in understanding the need of the customer and customized the product catalogue accordingly.
It’s an era of growing competition but Bata always has its own differential factors of comfort, quality, style, technology and innovation.
Which product segments give the biggest business to the company?
Every business unit at Bata has its own equal contribution towards the growth of the business. It will be difficult to credit one particular category from menswear, womenswear, kidswear and accessories, which provides biggest business to the brand.
What is the game plan behind including accessories in the shops – to what extent is it helping Bata. Is it a global trend for the company?
Accessories have been a part of the offering since a very long time now. However, we have been expanding the catalogue constantly with an objective to create the brand as a one stop shop for the customer.
The catalogue for accessories includes bags, belts, wallets, scarves and sunglasses.
Where does Bata India stand vis-a-vis Bata in other countries in respect of business turnover? Is there anything typical of India?
The company had recorded a turnover of over Rs.2,000 crore in the year 2013 reflecting a growth of approx. 12 per cent, as compared to the previous year. The Company’s net profit of Rs.190 crore during the year 2013 also reflected a growth of 11.2 per cent. Bata in India contributes positively to the overall global turnover and is definitely an important part of the business.
How is your plan to close unviable stores and open 100 new ones progressing? Which will be the preferred market?
The retail expansion plans are going smoothly, and we have opened a number of new stores. By and large, we plan to target the high-street shopping areas and malls within the target regions.
A major focus for the times to come is on the Tier-II and III cities. A lot of research and development goes behind identifying the right location for opening a new store.
The stores, which are not performing, are usually substituted by improved stores in the vicinity, to avoid any loss of sales.
Bata has a strong footprint of over 1,400 stores in the country, and the plan is to make the brand even more accessible to its customers by opening more number of outlets.
Local brands like Sree Leathers (a city based listed company) give you competition using the value for money plank. Do you face similar competition in other regions too? What is Bata’s strategy for tackling this?
Bata has always been known for its value for money products. The product offering at the brand has always been aspirational, comfortable, contemporary and yet affordable. Having competition is always healthy as you get to gear up and learn from the industry trends. The footwear market is only growing and we are confident on our performance in times ahead. We are always working towards the customization of our products to cater the emerging needs of our customers while focusing on maintaining high quality and comfort.
How is your franchise model which you had mentioned at your AGM, unfolding…you had planned 100 rural stores in two years, starting with 20 pilots?
The franchise model is still in the pilot test phase. We will keep you informed as the project progresses.
How are you planning to scale up your e-commerce business?
The e-commerce retail for Bata is only growing as we talk. We are constantly upgrading our website with wider range of offering as well as retailing curated edits of products on the leading fashion and lifestyle portals in the country. Bata promotes its e- commerce business with constant promotional/festive offers that encourage shoppers to buy from the Bata online. A timely delivery and a robust customer care unit is trained to back the e-commerce business.
What is the way forward? What are your projections and what are your views on imports from China? Is that an option for you?
The objective of the brand has always been to deliver the contemporary and aspirational range of products to the consumers at a high quality and affordable value. It gives us immense pleasure to welcome new consumers and loyal customers at our stores and offer an enriching experience with great customer service. We aim to deliver better than the best in future as well. A greater percentage of our products are locally manufactured in five factories across the country. An additional objective of focussing on local development and sourcing is to provide employment and training to our own country men and women.
indrani.dutta@thehindu.co.in
