This footwear market analysis is done for one of the leading footwear brands in India in order to compare itself with the largest players in the global footwear industry using porter's five forces and SWOT analysis.

1. FOOTWEAR SECTOR ANALYSIS
B Y R A T A N R A J P A L

2. CONTENTS
Sector background &
analysis (India & Global)
1
Growth drivers for Indian
footwear industry
2
3
Keeping up with
the trend
4
Brand comparative
analysis

3. SECTOR
BACKGROUND

4. Athletic and non-athletic
MARKET BY TYPE OF SHOES
North America, Europe, Asia- Pacific &
LAMEA
MARKET BY GEOGRAPHY
Leather and non-leather (plastic,
synthetic, plant based)
MARKET BY MATERIAL
Retail- offline and online (via e-commerce
platforms and brand’s own website)
MARKET BY MODE OF SALE
A B
CD
MARKET SEGMENTATION FOR FOOTWEAR

5. Global Footwear Market
1.1
The Global footwear market stood at US$ 246.07 billion in 2017. The
footwear market is expected to reach US$ 320.44 billion by the end of 2023.
• Type of shoes- Non-athletic shoes dominated the market in 2017. Rising
demand for sports shoes among the health conscious consumers is one of the
major factor driving the market growth of footwear.
• Type of material- Leather captured a significant market share in 2017. Many
companies are innovating their products using vegan and plant based material
due to the rising concerns over animal cruelty
• Mode of sale- In terms of growth, online channels is expected to witness the
fastest growth owing to convenience in shopping, discounts and easy return
policies offered by various manufacturers. However, hypermarkets dominate in
the offline channel.
• Market by geography-
• In 2017, the United States had the largest footwear market in terms of
revenue, with a revenue of 79.86 billion U.S. dollars. China was the
second largest market for footwear with 58.31 billion U.S. dollars in
revenue.
• In terms of production, China was the leading footwear producer,
(producing approximately 13.1 billion pairs of shoes) followed by India.

6. Indian Footwear Market
1.2
• Second largest producer along with China. Holds together approximately 60%
of the global market share;
• India took over USA as the second largest consumer market;
• Revenue in the Footwear market amounts to US$7,525m in 2019. The market
is expected to grow annually by 12.6% (CAGR 2019-2023);
• The market's largest segment is the segment Leather Footwear with a market
volume of US$4,745m in 2019;
• In relation to total population figures, per person revenues of US$5.50 are
generated in 2019;
• ‘Internet penetration level is ~26% in India as of 2018. This number is
expected to reach 36% by 2022. Evidently, this could prove to be a growing
opportunity for Indian brands to target young and tech savvy customers with
disposable income by deal-discount methods and festive sales.

7. Casual
61%
7%
7%
DISTRIBUTION
OF INDIAN
FOOTWEAR
MARKET
AS OF
2017
As one of the largest
footwear-producing markets
in the world, this consumer
segment in India thrived on a
large share volume of what is
called casual footwear at over
61 percent as of 2017. While
the sectors were primarily
categorized into men’s,
women’s and kids’ footwear,
the retailers were dominated
by the unorganized players.
Sports
Premium leather
3%
Premium non-leather
Mass (unorganized)
22%

8. PORTER’S FIVE FORCES
MODEL FOR FOOTWEAR
INDUSTRY
Porter's Five Forces is a model that identifies and analyses
five competitive forces that shape every industry, and helps
determine an industry's weaknesses and strengths.

9. • Rivalry is more intense as there are lots of
equally-sized competitors in India e.g., Liberty,
Khadims, Mirza International etc.
• Aggressive growth strategy of other brands
(both domestic and international) with low
switching costs.
COMPETITOR RIVALRY: HIGH
1
3
2
The potential customers for footwear industries can
be broadly classified into two categories-
1. Price sensitive customers who have a huge
bargaining power owing to the presence of low
cost brands and local products.
2. High end customers who prefer to buy
discounted and high sale products from retail
outlets or through online portals.
BARGAINING POWER OF CUSTOMERS: HIGH
The raw materials could be classified as
commodities where the manufacturing process
adds the value. For this reason supplier have
limited bargaining power over buyers.
BARGAINING POWER OF SUPPLIERS:
LOW

10. 4
5
• Government has permitted Foreign Direct
Investment through the automatic route for the
footwear sector.
• Barriers to entry are almost absent.
THREAT OF NEW ENTRANTS: HIGH
• Consumer can switch from one product to
another if alternatives are available in same
quality and performance.
• Competitive pricing has led the user to choose
from various brands which suits his pocket.
THREAT OF SUBSTITUTE PRODUCTS:
HIGH

11. GROWTH DRIVERS
FOR INDIAN
FOOTWEAR
INDUSTRY

12. INCREASED PREFERENCE
FOR BRANDED FOOTWEAR
FACTORS INFLUENCING THE INDUSTRY’S GROWTH
EVOLUTION OF E-COM CHANNELS
GROWING OPPORTUNITIES IN
WOMEN AND KIDS’ SEGMENT
PREMIUMIZATION

13. INCREASED PREFERENCE FOR BRANDED FOOTWEAR
• Second largest producer after China, holds approximately 60% of the global market share;
• Revenue in the Footwear market amounts to US$7,525m in 2019. The market is expected to grow
annually by 12.6% (CAGR 2019-2023);
• The market's largest segment is the segment Leather Footwear with a market volume of
US$4,745m in 2019;
• In relation to total population figures, per person revenues of US$5.50 are generated in 2019.

14. EVOLUTION OF E-COMMERCE CHANNELS
• Brick and Mortar retailers have started venturing into Omni channel or E-retailing and are finding
out ways to bridge the gap between offline and digital channels;
• The e-retail sector’s market size has tripled in the last 3 years (FY14-17) on rising internet
penetration, increasing awareness of online shopping, and lucrative deals and discounts;
• However, after the initial phase where e-retailers focused only on gaining market share through
discounts, the next phase will be majorly driven by consolidation of e-com players, geographical
diversification, business realignment and working on customer stickiness.

15. GROWING OPPORTUNITIES IN WOMEN AND KIDS’ SEGMENT
• Indian footwear segment is majorly dominated by mass or economy segment with ~85% share but
there has been a trend towards increasing share of premium and luxury segment and in terms of
sales (it amounts to ~Rs.4.5 bn as per ASSOCHAM data);
• Women’s footwear constitutes only ~35% of Indian market share currently. As per Khadim India
RHP, the growth rate of the women footwear segment has been significantly higher than that of the
men’s segment in the past few years and it expects women segment to grow by ~18% CAGR over
FY16-FY20 as compared to ~11.4% CAGR for men’s footwear;
• Additionally, kid’s footwear segment which currently contributes only 10% of total market is seeing
a rapid growth;
• Indian players like Khadim, Relaxo and Bata have seen launches/or adding new variants in the
kids segments to cater to the increasing demand of the same;
• For example- Bata has launched various variants in its Bubblegummers brand while Relaxo saw
new launches in School Mate and KIDsFun brand during the last few years.

16. PREMIUMIZATION
• Indian footwear segment is majorly dominated by mass or economy segment with ~85% share but
there has been a trend towards increasing share of premium and luxury segment and in terms of
sales (it amounts to ~Rs.4.5 bn as per ASSOCHAM data);
• Product innovation and differentiation leading to premiumization will be one of the key drivers for
the growth of footwear industry;
• Rising concerns over the type of materials used can be helpful for companies to put out the new
innovative products in the market at a premium. The demand of ‘innovation by being responsible’ is
a great opportunity to make products out of plant based vegan materials. Adidas, for example, has
used ocean waste to produce a new line of shoes.

17. BRAND COMPARATIVE
ANALYSIS

18. NOTE
`
• The following comparison of Metro shoes vs the top 5 brands in the footwear industry globally is based on their
revenues, their status and SWOT analysis
• Most of the points remain same across all parameters of comparison and therefore, are not stated uniformly
• Majority of the data points are taken from the company’s own website and market analysts. Furthermore, the
source references are mentioned in the end of this presentation.
• Revenue figures represent sales from footwear line of the respective brands.
• Few observations originate from personal opinion and perspective of the footwear industry.

19. Brand Metro Shoes
Bata
(worldwide)
Nike C&J. Clarks Puma Adidas
Revenue in
FY17-18
(in USD)
76M 384.8M 22.7B 2.2B 2.5B 12.78B
Status Private Public Public Private Public Public
Strength
• Exclusive in-house brands
• Strong country-wide brand
value with 150+ stores across
the country
• Leader in affordable pricing
segment
• Worldwide presence in 70+
countries with high brand value
• 1200+ stores in India and 5000+
abroad
• Benefit received from the parent
organization for back-office
systems, product innovations and
sourcing.
• Strong global brand
recognition with presence in
180+ countries
• “Make to stock” customer
order to provide fast customer
service
• In-depth knowledge pool of the
footwear industry since 1825
• Great brand awareness in North
American and European market
• Strong control over the
distribution channel due to
company owned stores
• Strong partnerships with brands
such as BMW and Ferrari
• Main producer of enthusiast
driving shoes and racing suits in
both Formula One and NASCAR
• Strong brand heritage since
1949
• Efficient distribution channels
i.e. large company owned stores
• Highly targeted customer base
due to big-banner games
fandom such as FIFA and NBA
Weakness
• Slow expansion as stores are
company-owned
• Relatively less brand
partnerships
• Increasing penetration of
international brands with modern
design increases scope of
adoption of new brands
• Strong dependency on the US
market alone – 42%
• High price-sensitive pressure
from retailers
• Relatively narrower product
range than the competition
• Weak ad campaigns for its niche
products such as trek boots
• Major sourcing dependency on
the Asian market
• Considered as a cheaper
alternative to big brand
competitors
• Concentrated customer base
due to high-pricing point
• High-level of outsourced
manufacturing in Asian markets
(i.e. 93%)
Opportunity
• Expansion in international
market by brand collaborations
• Adoption of franchise model to
grow
• Sales through online channels
• Scope of increasing brand
presence in developing nations
• Global expansion in the premium
segment
• Increasing health
consciousness and changing
lifestyle
• More focus on product
development and, innovation
and digitalization
• Expansion of product lines into
health and fitness category with
focus on women segment
• Addition of footwear accessories
in the product line
• Brand’s focus on women
segment
• High growth potential with
building strong brand value by
sponsorships and
merchandizing
• Puma entering into lifestyle
segment
• With acquisition of Reebok,
scope of expansion of product
line
• Entering into markets where
competition is relatively less
• Increasing health consciousness
and changing lifestyle
Threat
• Tough competition in the mid-
pricing segment from brands
such as Khadim, Bata, etc.
• Increasing imitations of brand’s
design can hurt loyal customers
• Intense competition limits the
overall market share
• Increasing imitations of brand’s
design can hurt loyal customers
• Increased costs due to non-
compliance and legal issues
• Controversial ad-campaigns
• Tough competition from Puma,
Adidas and Skechers
• Increase in taxes (for ex. UK)
could lead to lesser margins
• High employee costs in prime
markets
• Increased costs due to non-
compliance and legal issues
• Tough competition market
• Imitations of Puma brand is
extensively increasing causing
losses
• Tough competition from Puma,
Nike and Skechers
• Increased costs due to non-
compliance and legal issues
• With its 35% products
manufactured in China, duty &
tariffs plays a critical role in the
pricing

20. KEEPING UP WITH
THE TREND

21. FUTURE TRENDS IN SHOE MARKET
• Athleisure Will Remain Dominant, but Fashion Will Regain Some Share
Slowing growth doesn’t mean a shrinking market. Sport leisure footwear sales will continue to climb, but as the pace of
the increase slows, fashion footwear brands have the opportunity to take back some share by incorporating the comfort
and style elements that drove consumers to love their athleisure;
• Function and Comfort Will Become the Standard
Brands that carefully consider their product’s end use and tailor to comfort, versatility, and accessibility will succeed. This
may seem extreme, especially for fashion categories, but consumers are placing value on these features and benefits;
• Stores Show Some Promise, but Online Growth Will Continue
While online sales continue to generate most of the dollar growth in fashion footwear, the proportion of growth coming
from stores increased throughout 2018. Millennials drove much of this momentum, but it was mostly isolated to branded
retailers such as vertical shoe stores and factory outlets, rather than department stores.
• Social and Environmental Consciousness Will Take Centre Stage
Forty-one percent of consumers surveyed indicated that eco-friendly/sustainable materials are important when
considering their footwear purchases*. These issues will only grow in importance, so footwear brands need to figure out
how to participate here, in order to remain relevant to a new generation of consumers.
*Source: CivicScience/ June 2018

22. THANK YOU

23. RESOURCES
1. https://www.hdfcbank.com/assets/pdf/privatebanking/Sector-Update-Footwear-Sector-June-
2018.pdf
2. https://www.npd.com/wps/portal/npd/us/blog/2019/fashion-footwear-and-accessories-keeping-up-
the-momentum-in-2019/
3. https://www.globenewswire.com/news-release/2019/01/22/1703300/0/en/Global-Footwear-Market-
to-Gain-USD-320-44-Billion-by-2023-Zion-Market-Research.html
4. https://www.marketwatch.com/press-release/footwear-market-global-industry-size-share-trends-
growth-demand-and-forecast-2018-2026-2018-11-20
5. https://www.statista.com/topics/4571/global-footwear-market/
6. https://www.owler.com/company/bata
7. https://www.statista.com/statistics/735289/share-of-footwear-market-by-segment-india/