'We need to take advantage of our global scale but continue to stay locally relevant because we are seeing changes in consumer preferences. We need to make sure we are able to pivot in line with customer expectations'
NEW DELHI :
Sandeep Kataria, who took over as the global CEO of Bata Shoe Organisation in December, continues to work from India since Switzerland extended its lockdown till February. “Under lockdown, it’s better to Work from Home here rather than a service apartment in Lausanne where Bata is headquartered," said Kataria, who successfully steered the India business for three and a half years, with the company reporting a revenue of ₹3,053.45 crore for FY19-20. In an interview, he speaks about consumer shift to casual wear and the longevity of initiatives like WhatsApp ordering and store-on-wheels. Edited excerpts:
What does managing global operations from India entail?
Bata is present in 71 countries ranging from Chile, Colombia, Ecuador in Latin America to Singapore and Malaysia in the Far East, and China, Vietnam, etc. I'm spending a lot of time with the other regional presidents, understanding the market, functions and really putting down our strategy for the mid-term.
I am still overseeing the India operations though we have a very capable leadership team looking after it. Typically, right now, I'm devoting my first half of the day to India and the second half, which is beginning to go later and later into the evening, to the global operations. This is kind of a stopgap till we announce the new CEO in India.
How would you describe your personal journey in India and how did you prepare for the global role?
It’s been a hugely exciting and enriching journey. Bata is one of the few companies in the fashion footwear business which has the full value chain under its control from own factories to own retail stores. A great learning ground, India with its diversity offers the complexities that probably no other country does. While we are selling snow boots, we're also selling a whole lot of sandals in deep south. Exposure to complexities and the value chain, I'm hoping has prepared me for things in other markets.
How much does India contribute to the global business?
India is the single largest country as a company if you look at 2019 sales turnover. But all five regions contribute almost equally to the business. Latin America, Africa, European business, India, Asia Pacific -- they're all equally strong, roughly equal size as well.
It’s a privately held company so we don't really end up sharing data in great detail. But India is about one fifth of the turnover for them.
As the global CEO, what are your top priorities for the company in a post-pandemic world?
I think we will have to separate out the immediate short term and the medium term. In the short term, if you look at Europe, Latin America or even some market in Southeast Asia, I think they’re still very much battling the pandemic, and therefore employee safety and safety of our customers continues to come first.
Post that I think the big focus for us will be to get the momentum back, get the top line growth going again, even as we continue to keep a strong hold on the cash management.
The evolution to the omni channel company which had started even pre pandemic has gained a huge amount of traction and momentum through the crisis. We need to make sure that we become a truly omnichannel company by the end of 2021.
We need to take advantage of our global scale but continue to stay locally relevant because we are seeing changes in consumer preferences. We need to make sure we are able to pivot in line with customer expectations.
Finally, big focus globally is to make sure that we invest and build talent.
There's a lot of innovation and agility that the teams have shown across the world, whether it was to launch new initiatives like the WhatsApp calling based ordering or the store-on-wheels or helping out the communities. We need to make sure that that stays nurtured and as we come out of pandemic we're able to build on that culture.
Are we talking of consumer pivot to casual wear?
Yes. As we come out of the pandemic some amount of work from home will stay and there will be lasting impact of comfort. We’re seeing people are preferring more casualisation of their footwear. As social occasions start, we can see the dress coming back. But comfort and casualisation will be the driving trends. The good news is that at Bata comfort has always been one of the pillars of our equity and brand.
With WFH continuing, will you get into other categories such as athleisure?
We have actually started testing some of our training and fitness apparel under the Power brand. We see that as a trend which was, to some extent, happening pre-pandemic, but has clearly accelerated. People are more fitness conscious. So we are testing that and we are able to leverage some of the learnings that we have from our outdoor brand in Latin America. We do have some accessories in Bubble Gummer brand as well. We will start testing that out in the markets.
Post pandemic what happens to the idea of a physical store in retail?
It’s too early to go one way or the other. As markets have opened up we've seen our demand in the stores pick up quite smartly. Europe, before the second wave, had actually bounced back. We saw consumers coming back because it’s a product you want to try on and feel before you buy.
Having said that, clearly, we've seen that there's a huge opportunity for omni channel, where people are familiar with their shoe sizes and very comfortable with shopping online. We will use online to make inventory really productive across the stores.
Will some of the initiatives of the pandemic stay?
A: Absolutely. One of the joys of a multinational company is when you are able to quickly learn and transfer best practices. The WhatsApp based ordering system is now prevalent in many countries. The store-on-wheels which started with India has also taken wings. You will see it in Pakistan, Bangladesh and even some markets in Southeast Asia. Do we see these holding up as we come out of the pandemic? Absolutely.
After the pandemic will slow fashion replace fast fashion?
The awareness and the consumers interest in being more responsible to the environment has gone up probably further.
On our part, we've been on this journey for a while now through many different initiatives, starting with making sure our factories are zero effluent. Secondly, our Power shoes, for example, use recycled tyres as their sole. Awareness for sustainability is growing significantly around the world, and responsibility from companies is bound to reflect that demand from consumers.