Bags / Shoes & Accessories

India is the world's second largest footwear producer after China, with an annual output of about 2.2 billion pairs of various types of footwear. Exports of leather and footwear products from the country are expected to exceed US$6 billion (approximately RMB 40 billion) in the 2022-2023 fiscal year due to growing demand in markets such as the United States and the Middle East, Africa and Latin America.

At present, there are about 15,000 shoe-making enterprises in India, 85% of which are small and medium-sized enterprises. Five years ago, the top 10 players in the local sneaker market were all foreign companies, including China's Li Ning. However, in recent years, local brands have begun to rise, such as Campus Activewear, Relaxo Footwear, Metro Brands, etc.

Among them, Campus Activewear is the largest sports and leisure shoe brand in India. According to a report released by consulting firm Technopak, in the 2021 fiscal year (April 2021-March 2022), its sales accounted for 17% of the Indian sports and leisure shoes market, and its sales accounted for 25%. The data are at the top of the list.

The company has more than 425 distributors and more than 19,200 retailers, covering over 85% of the potential market for athleisure footwear in India. It was successfully listed on May 9, 2022, with a market value of 101.17 billion rupees (about 8.57 billion yuan) as of June 30.

66-year-old founder Hari Krishan Agarwal has become India's newest billionaire with a 74% stake worth 74.87 billion rupees (about 6.34 billion yuan). As early as 1983, he began to set foot in the footwear market and founded a sports shoe brand called Action. In 2005, he officially launched the Campus sports shoe series.

In the Indian market at that time, brands such as Nike, Adidas and Puma were popular, but the prices were not cheap, usually priced at more than $35. He was keenly aware of the huge vacuum in the market, and decisively adopted a low-price strategy, setting the price of the product below $10, and successfully gained a place.

In the future, Campus will carry out the low price strategy to the end. Its men's shoes are priced at 275-3499 rupees (about 23.3-296 yuan), women's shoes are priced at 325-2199 rupees, and children's shoes are 350-1699 rupees. There are from dozens to hundreds of yuan, but the highest is not more than 300 yuan.

Affected by the market environment, Campus achieved revenue of US$94 million (approximately RMB 630 million) last year, a slight decrease from US$95 million the previous year, but sales are gradually recovering. A total of 13 million pairs of shoes have been sold. Based on this calculation, the average income per pair of shoes is only about 48 yuan.

Having said that, the low price also limits the brand image and consumer group of Campus, whose main markets are small cities in northern and eastern India. According to the Technopak report, in fiscal 2021, the company's revenue in second- and third-tier cities accounted for 73.1% of total revenue, while revenue in first-tier cities and cities with subways accounted for only 26.9%.

However, they do not want to give up the first-tier city market, after all, the people in these places have stronger spending power. Campus expanded its product category from athletic shoes to casual shoes, the fastest-growing segment of the footwear industry in recent years. However, in addition to the low price, there are also R&D and design issues that affect its entry into the high-end market. Brands such as Nike and Peak can be seen in many products.

The data shows that per capita spending on athleisure and sports products in India is only $1.9. That compares with $33.8 in China and $227.3 in the United States. However, this also shows that the market has huge development potential. In addition to the huge population, the local people's demand for sports shoes is also constantly being awakened.

As competitors, Relaxo Footwear and Metro Brands had revenues of $350 million and $107 million, respectively. The two products also cover sports and leisure shoes, the overall price is higher, and more business-style leather shoes and high-heeled shoes will be launched. If Campus wants to develop further, low prices alone are not enough. How to expand sales and improve R&D capabilities is a problem that it must solve.