India has 2nd largest footwear market but lags in exports, says VKC Pride MD
VKC Razak talks to The Federal on premiumization trend, challenges posed by south-east Asian competitors and government's plan to frame a national policy to boost exports
Expressing confidence in India’s footwear industry, VKC Pride’s managing director VKC Razak spoke to The Federal at the South India Media Summit 2024 in Kochi, about the brand's strategy to capitalise on the rising premiumization trend. He also discussed the challenges posed by south-east Asian competitors leveraging cheap labour and the brand's collaboration with Bollywood star Amitabh Bachchan.
Edited excerpts:
From a revenue of ₹50 crore in 2005, the group today boasts revenues of over ₹2,000 crore annually. Any targets you’re looking to achieve this year?
We are experiencing steady growth and aim to become the number one brand in India. Our targets exceed the figures you mentioned, and we are confidently moving forward to achieve them.
VKC launched its exclusive brand store in Chennai last year. Are there any expansion plans in the pipeline?
Absolutely, we view this as a new business format that will enhance our performance and numbers. Currently, we have three stores in Chennai and six across Tamil Nadu. This month, we are opening three more in the state. Our goal is to reach 30 stores this year, and I’m confident we will achieve that before the end of the fiscal year.
There’s a premiumization trend we can visibly see across sectors and footwear is no exception. Is the company looking to capitalise on this?
We have recently introduced a new brand called GoodSpot, which offers premium products designed for sophisticated customers. In addition, we are launching a youth-oriented brand called Debongo, featuring the latest technology and lightweight soles. You can expect to see these products available soon at affordable if not honest prices.
The CAGR for footwear industry is estimated to be somewhere 15-17 per cent in the next three years but India’s per capita consumption of footwear has been too low. The gap between India and China is too wide. There is also competition coming in from Vietnam, Thailand and Bangladesh through cheap labour. How do we navigate these challenges?
India ranks as the second-largest footwear market in the world. However, we currently lag in the area of exports. The Indian government has recognised this and is developing a national policy for the footwear industry. Just last week, we held a meeting with stakeholders to contribute to this policy, which we expect to roll out soon.
In Tamil Nadu, major brands like Nike and Adidas have begun manufacturing locally, and I believe this trend will continue to grow in the coming years. As production shifts to India, consumers will have easier access to these products. Currently, per capita consumption stands at 1.8 pairs, and we anticipate it will rise to 3.0 by 2030. With production projected to increase from 2.2 billion pairs to 3.6 billion, India is poised to become a key player in footwear manufacturing.
You brought Big B on board last year as brand ambassador. What's your marketing strategy?
Amitabh Bachchan and our brand are a perfect match because we both embody a strong work ethic. Our footwear line represents hard working fashion, just as he is a dedicated actor. While he has partnered with many brands, this is his first engagement with a footwear brand, and we are thrilled to have him as our brand ambassador. His involvement has significantly boosted our presence in the Hindi belt, contributing to double-digit growth in certain markets compared to the previous year.
