Tata International launches Aerosoles
The Tata Group company had launched retail footwear brand Tashi in 2010 but exited the market due to limited success
Mumbai: As Indian consumers become more brand conscious, Tata International Ltd, an exporter of leather products has re-entered the domestic footwear market with Aerogroup International’s footwear brand Aerosoles. The Aerosoles brand has been test marketed in western India for the last six months, the firm said.
The Tata Group company had launched retail footwear brand Tashi in 2010 but exited from the market last year due to limited success.
“Tashi was early for its time. The timing now is right. The Indian consumer is brand conscious and Aerosoles is an iconic brand. It is being received well by the Indian consumer," said N. Mohan, global business head, footwear and leather garments, at Tata International, while explaining that the company needs to adjust to the domestic market.
For instance, unlike global markets where there are seasons, India is a summer market and sales of open shoes happen nine months of the year. Also the Indian consumer prefers bright colours and comfortable footwear, noted Mohan.
Domestic operations contribute a negligible 1% of Tata International’s revenue of ₹ 850 crore. With the launch of Aerosoles and expansion of the footwear portfolio, the company hopes to get a revenue of ₹ 100-120 crore from domestic operations in the next three years, said Mohan.
Close to 60% of the ₹ 30,000 crore Indian footwear market is dominated by open footwear like open shoes, sandals and chappals, while casual wear makes up 22%, formals 10% and sportswear 8%, according to Prashant Agarwal, managing director, Wazir Advisors, a retail consultancy firm.
Moreover, nearly 85% of the footwear market is unorganized and dominated by small firms. However, the organized market is expected to grow at a higher clip of 25%, compared with the overall market which is growing at 15% per annum, said Agarwal.
The Noel Tata-managed company signed a 35-year licence agreement with New Jersey-based Aerogroup in 2012 to produce and market Aerosoles products in Europe, South Africa and India.
“The strategy is to first build Aerosoles and then we are looking at a couple of other European brands to bring them to India. The Indian consumer is ready for branded footwear now," said Mohan, who also admitted the firm may launch its own domestic footwear brand in two-three years, once the branded footwear business is established.
Meanwhile, Reliance Industries Ltd’s retail arm Reliance Retail is set to announce a partnership with Kansas-based Payless Shoesource Inc. on Wednesday, with the launch of its showroom in Mumbai. To be sure, the Indian retail market is not easy and is currently hit by low growth and high costs. The footwear category, in particular, is subject to higher taxes and excise duty.
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