Why Pramila Devi uses her slippers sparingly

Pramila Devi from Methi village in Muzaffarpur district. She wants better wages and more workdays under the rural jobs scheme to pay for the rising cost of living (Photo: Sayantan Bera/Mint)
Pramila Devi from Methi village in Muzaffarpur district. She wants better wages and more workdays under the rural jobs scheme to pay for the rising cost of living (Photo: Sayantan Bera/Mint)


  • Sales of mass footwear items have slid—an indicator of stressed incomes and faltering consumer demand
  • Sales of footwear picked up in 2021-22 after lockdown restrictions were lifted. But in 2022-23, sales of low-priced open footwear products have stuttered

A conversation with the women of Methi blurs the distinction between necessity and luxury. For urban Indians, owning a pair of footwear is a necessity, but not for the women of this village, about an hour’s ride from Muzaffarpur, the second most populated city of Bihar.

For instance, Pramila Devi uses her sole pair of Hawaii chappal (flip flops) sparingly. She wears her pink worn-out pair to move around after sun down but seldom during the day, to prolong its life. The pair will not last more than six months if used daily.

Besides, moving around barefoot does not raise eyebrows in a village. It’s left to one’s choice and means. When most of what a family earns is spent on purchasing food, a pair of slippers, a bar of soap, or a set of clothes are indulgences.

Pramila Devi’s seven-member family is dependent on day wages earned by her son, a former migrant worker who used to work in a textile factory in the National Capital Region and send around 4,000 home every month. But after a minor accident scraped the flesh off one of his fingers while working on a machine, Pramila Devi coaxed him to return home in January. He now works as a farm hand, earning 250 a day. The wages have remained stagnant over the past few years and finding work—on or off the farm — even for 15 days a month, is tough.

Meanwhile, food expenses shot up. As wheat prices climbed over the past year, the family now spends 600 more every month compared to a year ago just to meet their flour requirement. Same goes for edible oils, pulses and other staples on which Pramila Devi spends around 7,000 now, compared to less than 5,000 in 2020, before the pandemic hit. That is for a diet which has very little fruits, fresh vegetables, dairy or meat products. And calorie-heavy meals whose sole purpose is to fill stomachs, such as a watery potato curry to go with wheat flatbreads.

Asif Ali, a trader. At the wholesale footwear market in Muzaffarpur, more than 11 traders shut shop in the past two years
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Asif Ali, a trader. At the wholesale footwear market in Muzaffarpur, more than 11 traders shut shop in the past two years (Photo: Sayantan Bera/Mint)

Of late, managing household expenses has become a daunting task, the women of Methi complain. They worked for just 12 days (since the beginning of the financial year in April 2022) under the rural jobs scheme which promises to provide 100 days of work to rural families in a year. The work was allocated after repeated protest demonstrations before local government offices. In December, the federal government withdrew the pandemic assistance of 5kg of free food grains (in addition to another 5kg per person per month provided under the food security scheme).

The families often borrow from local money lenders at exorbitant interest rates of 5% per month to meet their grocery and sudden medical expenses.

“I spend a lot of time collecting firewood because I cannot afford cooking gas. In the past one year, we were able to buy just a few sets of clothes. I use my slippers carefully because if it gives way, I will not have a pair to wear when I step out of the village," Pramila Devi said.

For Rinku Devi, who lives a short distance away from Methi, not able to buy a pair of slippers is the least of her concerns. In February, she travelled barefoot as part of a rights group to Delhi’s protest corner, Jantar Mantar, to air her grievances on the rural jobs scheme. She wants more days of work under the scheme and wants the government to withdraw an order which mandates that attendance be registered on a mobile app, twice daily. After working through the day, at times, their attendance is not recorded due to poor mobile connectivity.

“After a piece of metal pierced my foot, I visited a market in Delhi but 150 was too much to spare for a pair of slippers," Devi said, laughing. “I would rather spend that money on food for my children."

Pramila Devi and Rinku Devi belong to the bottom of India’s consumption pyramid. But they are also part of an 800-million-strong consumer base who are acutely dependent on subsidized food rations—accounting for 60% of India’s population. A little more income in their hands can drive consumption of numerous items, from fast moving consumer products to clothes and footwear. But falling sales of low-priced footwear in India, the second largest producer globally, is an indicator of severe income stress in these low-income families.

Slide in sales

Indians purchased an estimated 2.6 billion pairs of footwear in 2019-20 but sales tanked 35% in 2020-21 after the pandemic hit, observes a note published (January 2022) by ICICIDirect, a brokerage. Between 2022-2025, consumption was estimated to grow at a compounded annual growth rate of 8-10%. Sales picked up in 2021-22 after lockdown restrictions were lifted and the threat of infections waned.

But in the ongoing financial year (2022-23), sales of low-priced open footwear products have stuttered. Relaxo Footwears, a leading mass market brand, reported an 8% drop in sales volumes and revenues in the third quarter (October-December) of 2022-23, which includes major festivals like Diwali and Dussehra when shoppers throng markets in large numbers.

“The management indicated that demand continued to remain subdued and was negatively impacted by high inflation, which impacted the purchasing power of its core customer. The mass category of open footwear had declined due to customers shifting to cheaper unbranded products," ICICIDirect said in a note last month.

According to Gaurav Dua, executive director at Relaxo, lower sales in 2022 were primarily due to a sharp increase in raw material prices and a hike in the goods and services tax (GST) from 5% to 12%—which pushed Relaxo to increase retail prices. But it was later forced to lower prices twice, in May and September, to arrest the slide in sales, taking a hit on its bottom line.

“Demand for open footwear shot up after the lockdown was announced. In 2022, we lost market share to unorganized smaller players following the price hikes. As of now, there is no problem in urban areas but demand recovery in rural areas is slower than usual," Dua told Mint.

“But we expect the market to stabilize and share of organized players to grow in future," he added.

A look at Relaxo’s third-quarter numbers (FY2023) show that even if it maintains similar sales volumes (as reported in FY2022) in the fourth quarter, the company will sell 160 million pairs in 2022-23, about 11% fewer pairs than what it sold in the pre-pandemic year 2019-20.

Similarly, Bata India reported a 5% drop in sales volumes in the third-quarter of 2022-23, even though its average sale price (ASP) per pair grew 13% due to a focus on selling more premium products (resulting in 7% growth in revenues), according to a note from HDFC Securities.

Mohammad Irshad, a small footwear retailer. He purchased merchandise worth  <span class='webrupee'>₹</span>70,000 during the festive season last year, but could sell less than a fourth of it.
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Mohammad Irshad, a small footwear retailer. He purchased merchandise worth 70,000 during the festive season last year, but could sell less than a fourth of it. (Photo: Sayantan Bera/Mint)

In contrast, Metro Brands, which mostly sells premium footwear (an average pair costs around 1,500 compared to 165 for Relaxo), posted a revenue growth of 24% in the third quarter of 2022-23.

So, while mass market sales are stressed, premium categories performed better, an indication of the often-discussed K-shaped economic recovery.

“Urban centres and premium products performed well in the past few quarters but value segments are suffering, including for footwear, fashion and lifestyle items. This is largely due to subdued demand in rural areas and small towns. Relaxo is a prime example of this phenomenon as 70% of its products cater to the mass market," said Priyesh Ruparelia, vice president- corporate ratings at Icra Ltd.

Ruparelia added that most of the pandemic relief measures have been rolled back while the inflation build up has eaten into household earnings. This likely pushed low-income families to defer purchase of items like footwear and clothes. According to Icra, the market dynamics also led to a new trend of ‘premiumization’: companies selling expensive footwear to the well-off, to counter falling sales of cheaper items.

The slide in sales of mass footwear items produced by popular brands, however, has not translated into any increase in sales of lesser-known smaller brands or unbranded products which constitute around 70% of the industry.

“Current sales volumes of smaller units are 30% lower compared to pre-covid years. Most units are working at 60% or lower capacity and several have shut shop in recent years," said Subhash Jagga, general secretary of Footwear Park Association in Bahadurgarh, Haryana, home to over 1,000 manufacturing units.

“The hike in GST (in January 2022) coupled with reduced purchasing power of consumers are to be blamed for this slowdown in sales," Jagga added.

Shutting shop

During a visit to local markets in Bihar’s Muzaffarpur district, Mint spoke to footwear retailers and wholesalers to get a sense of the changing market.

October and November of 2021 were the best-ever months when monthly sales touched 2 lakh, said Sanjay Kumar, 42, a small retailer from Muzaffarpur town who sells both branded and unbranded products. The record sales came on the back of soaring demand after lockdown restrictions imposed during the covid pandeic were eased. But sales dropped by around 25% in the festive months of 2022. In January this year, the numbers were even lower at 1.25 lakh.

“In the order of household priorities, footwear ranks behind grocery and non-food items like clothes. Also, more people buying shoes online has affected sales," Kumar said. The result: Kumar is now considering to return to the family business of selling sweetmeats.

Kumar also pointed to a proliferation in the number of retailers post-pandemic, of shoes and other products and services, which impacted volumes. “Many who returned to their home towns and villages during the first-wave of the covid pandemic did not want to go back to big cities. Some of the sold their assets like land to set up retail stores. In this town, there are more than 200 footwear shops now, leading to fierce competition and lower margins."

At the Islampur wholesale market, in Muzaffarpur town, 36-year-old Asif Ali, said that monthly revenues dropped from over 10 lakh in 2016 to less than 5 lakh now. “Small retailers are unable to pay me on time. In this market alone, 11 wholesalers have shut shop in the past two years. This is due to a variety of reasons: falling consumer demand, an increase in the number of wholesalers supplying to smaller rural markets and growing online sales."

“A decade back, I purchased an expensive bike and pre-paid the loan in a few months. But recently, I bought a 15,000 mobile phone on a six-month EMI. And I am still using that 10-year-old bike," Ali said.

Seventy one-year-old Nagina Shah, a third-generation clothes retailer in a local market in Turki, Muzaffarpur, said stagnant wages and fewer jobs has hurt the post-covid recovery in consumption. “There was a time when during festive months we would not have the time to eat. Now, we mostly sit around. Only pharmacies and grocery stores are doing brisk business. My situation is such that I had to sell a plot of land to clear bank dues," Shah said.

A silver lining in this bleak consumption scenario is rising volume of remittances—money sent by migrant workers to their families in rural India—which can boost consumption demand.

“After a sharp drop in 2020-21, we are now witnessing 20% higher remittances (in value terms) compared to pre-covid levels. But the average ticket size has remained unchanged at 3,000-4,000 in the past several years," said Shailesh Pandey, chief sales officer at Fino Payments Bank, which provides banking and remittance services through 1.3 million merchant outlets across India.

A healthy growth in corporate and public sector salaries will lift urban incomes in 2023-24 but growth in rural incomes will be subdued (due to lower crop prices and a 33% cut in spending under the rural jobs scheme), Crisil Research said in a report in March. The report added that “the pressure on rural consumption is expected to continue as flat wages and high inflation (seen at 6% in fiscal 2024) crimp spending power."

Which means consumers like Pramila Devi may continue to postpone their purchases—a warning for footwear makers.

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