Indian Footwear Industry Overview

Indian leather industry is the core strength of the Indian footwear industry. It is the engine of growth for the entire Indian leather industry and India is the second largest global producer of footwear after China. Reputed global brands like Florsheim, Nunn Bush, Stacy Adams, Gabor, Clarks, Nike, Reebok, Ecco, Deichmann, Elefanten, St Michaels, Hasley, Salamander and Colehaan are manufactured under license in India. Besides, many global retail chains seeking quality products at competitive prices are actively sourcing footwear from India. While leather shoes and uppers are produced in medium to large-scale units, the sandals and chappals are produced in the household and cottage sector. The industry is poised for adopting the modern and state-of-the-art technology to suit the exacting international requirements and standards. India produces more of gents footwear while the worlds major production is in ladies footwear. In the case of chapels and sandals, use of non-leather material is prevalent in the domestic market. Leather footwear exported from India are dress shoes, casuals, moccasins, sport shoes, horrachies, sandals, ballerinas, boots. Non-leather footwear exported from India are Shoes, Sandals and Chappals made of rubber, plastic, P.V.C. and other materials. With changing lifestyles and increasing affluence, domestic demand for footwear is projected to grow at a faster rate than has been seen. There are already many new domestic brands of footwear and many foreign brands such as Nike, Adidas, Puma, Reebok, Florsheim, Rockport, etc. have also been able to enter the market. The footwear sector has matured from the level of manual footwear manufacturing methods to automated footwear manufacturing systems. Many units are equipped with In-house Design Studios incorporating state-of-the-art CAD systems having 3D Shoe Design packages that are intuitive and easy to use. Many Indian footwear factories have also acquired the ISO 9000, ISO 14000 as well as the SA 8000 certifications. Excellent facilities for Physical and Chemical testing exist with the laboratories having tie-ups with leading international agencies like SATRA, UK and PFI, Germany.

One of the major factors for success in niche international fashion markets is the ability to cater them with the latest designs, and in accordance with the latest trends. India, has gained international prominence in the area of Colours & Leather Texture forecasting through its outstanding success in MODEUROP. Design and Retail information is regularly made available to footwear manufacturers to help them suitably address the season's requirement. The Indian Footwear Industry is gearing up to leverage its strengths towards maximizing benefits. Strength of India in the footwear sector originates from its command on reliable supply of resources in the form of raw hides and skins, quality finished leather, large installed capacities for production of finished leather & footwear, large human capital with expertise and technology base, skilled manpower and relatively low cost labor, proven strength to produce footwear for global brand leaders and acquired technology competence, particularly for mid and high priced footwear segments. Resource strength of India in the form of materials and skilled manpower is a comparative advantage for the country. The export targets from 2007-08 to 2010-11 as tabulated below reflects the fact that footwear sector is the most significant segment of the Leather Industry in India.

The export targets from 2007-08 to 2010-11 (In Million US$) Product 2006-07 Actual Export Leather Footwear Garments Leather Goods Saddlery & Harness Total 2981.79 3892.26 4682.01 5689.17 6980.21 688.05 1212.25 308.98 690.66 81.85 726.85 1967.88 358.53 733.34 105.66 785.00 2597.60 372.87 798.69 127.85 847.80 3428.83 387.78 870.06 154.70 915.63 4526.05 403.30 948.04 187.19 2007-08 2008-09 2009-10 2010-11

India has emerged in recent years as a relatively sophisticated low to medium cost supplier to world markets The leather industry in India has been targeted by the Central Government as an engine for economic growth. Progressively, the Government has prodded and legislated a reluctant industry to modernise. India was noted as a supplier of rawhides and skins semi processed leather and some shoes.

In the 1970s, the Government initially banned the export of raw hides and skins, followed this by limiting, then stopping the export of semi processed leather and encouraging local tanneries to manufacture finished leather themselves. Despite protestations from the industrialists, this has resulted in a marked improvement in the shoe manufacturing industry. India is now a major supplier of leather footwear to world markets and has the potential to rival China in the future (60% of Chinese exports are synthetic shoes). India is often referred to as the sleeping giant in footwear terms. It has an installed capacity of 1,800 million pairs, second only to China. The bulk of production is

in mens leather shoes and leather uppers for both men and ladies. It has over 100 fully mechanised, modern shoe making plants, as good as anywhere in the world (including Europe). It makes for some upmarket brands including Florsheim (US), Lloyd (Germany), Clarks (UK), Marks and Spencer (UK). India has had mixed fortunes in its recent export performance. In 2000, exports of shoes were US$ 651 million, in 2001 these increased to 663 million but declined in 2002 to 623 million dollars (See Statistics). The main markets for Indian leather shoes are UK and USA, which between them take about 55% of total exports. India has not yet reached its full potential in terms of a world supplier. This is due mainly to local cow leather that although plentiful, has a maximum thickness of 1.4 1.6mm, and the socio / political / infrastructure of the country. However, India is an excellent supplier of leather uppers. Importation of uppers from India does not infringe FTA with Europe or the USA. The potential is set to change albeit slowly, but with a population rivalling China for size, there is no doubt the tussle for world domination in footwear supply is between these two countries. Few Interesting Facts: - The Indian footwear retail market is expected to grow at a CAGR of over 20% for the period spanning from 2008 to 2011.

- Footwear is expected to comprise about 60% of the total leather exports by 2011 from over 38% in 2006-07.

- Presently, the Indian footwear market is dominated by Men's footwear market that accounts for nearly 58% of the total Indian footwear retail market.

- By products, the Indian footwear market is dominated by casual footwear market that makes up for nearly two-third of the total footwear retail market.

- As footwear retailing in India remain focused on men's shoes, there exists a plethora of opportunities in the exclusive ladies' and kids' footwear segment with no organized retailing chain having a national presence in either of these categories. - The Indian footwear market scores over other footwear markets as it gives benefits like low cost of production, abundant raw material, and has huge consumption market. - The footwear component industry also has enormous opportunity for growth to cater to increasing production of footwear of various types, both for export and domestic market. In a Nutshell:

There are nearly 4000 units engaged in manufacturing footwear in India. The industry is dominated by small scale units with the total production of 55%. The total turnover of the footwear industry including leather and non-leather footwear is estimated at Rs.8500-9500 crore (Euro 551.3-1723.1 Million) including Rs.1200-1400 crore (Euro 217.6-253.9 Million) in the household segment. India's share in global leather footwear imports is around 1.4% Major Competitors in the export market for leather footwear are China (14%), Spain (6%) and Italy (21%).

The footwear industry exist both in the traditional and modern sector. While the traditional sector is spread throughout the country with pockets of concentration catering largely to the domestic market, the modern sector is largely confined to select centres like Chennai, Ambur, Ranipet, Agra, Kanpur and Delhi with most of their production for export. Assembly line production is organized, and about 90% of the workforces in the mechanized sector in South India consist of women. In fact, this sector has opened up plenty of employment opportunities for women who have no previous experience. They are trained to perform a particular function in the factory itself

Indian Footwear Industry A Status

The footwear sector is a very significant segment of the leather industry in India; rather it is the engine of growth for the entire Indian leather industry.

India is the second largest global producer of footwear after China, accounting for 13% of global footwear production of 16 billion pairs. India produces 2065 million pairs of different categories of footwear (leather footwear - 909 million pairs, leather shoe uppers - 100 million pairs and non-leather footwear - 1056 million pairs). India exports about 115 million pairs. Thus, nearly 95% of its production goes to meet its own domestic demand.

The major production centers in India are Chennai, Ranipet, Ambur in Tamil Nadu, Mumbai in Maharastra, Kanpur in U.P., Jalandhar in Punjab, Agra, Delhi, Karnal, Ludhiana, Sonepat, Faridabad, Pune, Kolkata, Calicut and Ernakulam. About 1.10 million are engaged in the footwear manufacturing industry. . Footwear exported from India are Dress Shoes, Casuals, Moccasins, Sport Shoes, Horrachies, Sandals, Ballerinas, Boots, Sandals and Chappals made of rubber, plastic, P.V.C. and other materials.

Brands sourced from India:

Footwear Acme, Ann Taylor, Bally, Charter Club, Clarks, Coach, Colehann, Daniel Hector, Deichmann, DKNY, DoubleH, Ecco, Elefanten, Etienneaigner, Florsheim, Gabor, Geoffrey Beene, Guess, Harrods, Hasley, Hush Puppies, Kenneth Cole, Liz Claiborne, Marks &Spencer, Nautica, Next, Nike, Cole Haan, Nunn Bush, Pierre Cardin, Reebok, Rockport, Salamander, StacyAdams, Tommy Hilfiger, Tony Lama, Versace, Yves St. Laurent, Zara, Johnston & Murphy, Docksteps,Timberland, Armani, Geox, Diesel, Ted Baker, Lacoste, Kickers, Calvin Klein, Sioux, Brasher, Zegna, Massimu Dutti, Buggatti, Lloyd, Christian Dier, Salamander, Camper, Bata, Espirit, French Connection, Legero, Mercedez, H & M and many more famous brands

Besides, major brands are sourced from India, MNC brands are sold in India and Indian brands sold in India.

MNC Brands Sold in India

Indian Brands sold in India Tape, Bata, Liberty, Khadims,

Aldo, Bally, Clarks, Ecco, Florshiem,Red Ferragammo, Hush Puppies, cooper, Lloyd, Marks & Spencer, Nike, Nine West, New Balance, Reebok, Rockport, Stacy Adams

LeeLakhani, Metro, Action

US Retail giant Wal-Mart has also begun sourcing footwear from India since the last two years.

The Footwear sector is now de-licensed and de-reserved, paving the way for expansion of capacities on modern lines with state-of-the-art machinery. To further assist this process, the Government has permitted 100% Foreign Direct Investment through the automatic route for the footwear sector.

Conducive Investment climate towards attracting overseas investments and increasing cost competitiveness.

The Government of India is setting up dedicated Footwear Complex and Footwear Components Part where footwear clusters are located.

There has been active interest in collaborating with Indian Footwear companies from European countries like Italy, Spain and Portugal.

Footwear Imports Global Trend:

Major Importing Countries of Footwear (Leather and Non-Leather)

(Value in Million US$) Country 2004 17071. USA 97 4691.1 Germany 4 4199.8 France 5 4492.0 UK 2 4674.1 Hong Kong 7 3209.9 Italy 8 2998.8 Japan 5 1431.7 Spain 5 1804.0 Belgium 3 2005 18548. 37 5238.9 7 4500.2 2 4694.9 4 5098.2 4 3621.0 6 3300.2 8 1734.2 4 1993.7 7 2006 19835. 93 5591.7 7 4778.0 7 4950.4 9 4984.5 9 4047.3 7 3509.8 3 2036.2 1 2057.3 9 1121.6 Russia 284.37 543.12 8 2007 20039. 13 5966.9 9 5473.0 4 5281.5 5 4881.6 7 4529.7 7 3750.0 4 2388.7 4 2543.0 4 2067.8 2 2008 20104. 41 6529.3 3 5714.0 0 5213.0 0 4944.4 0 4810.2 5 4112.9 9 2917.9 7 2892.6 2 2843.8 1 2009 17904. 13 6037.7 3 5379.7 8 4772.5 9 3974.3 0 4457.8 8 4077.5 8 2464.3 4 2554.5 0 2149.4 2

Netherland s

1459.1 0 1183.9

1772.2 2 1321.9 9

1978.3 3 1507.2 1

2297.9 5 1674.0 4

2570.8 6 1747.9 4

2481.3 5 1645.2 0

Canada

Major Exporting Countries of Footwear (Leather and Non-Leather)

(Value in Million US$) Country 2004 14626. China 36 7791.3 Italy 1 5374.0 Hong Kong 4 2691.8 Vietnam 3 1929.2 Belgium 2 2022.6 Germany 1 2175.3 Spain Netherland s France 5 1328.9 5 1325.7 2005 18433. 69 7652.9 3 5828.4 0 3039.1 7 2509.3 4 2316.3 0 2041.3 7 1493.6 1 1376.5 2006 21014. 63 8246.5 1 5692.8 5 3595.9 4 2960.2 8 2607.8 9 2147.7 4 1577.0 3 1535.2 2007 24181. 69 9712.9 4 5639.6 4 3999.4 8 3375.6 3 2999.1 9 2440.4 7 1811.9 6 1840.5 2008 28115. 96 10218. 75 5666.0 5 4769.8 7 3680.8 0 3611.9 0 2670.3 5 2240.7 0 2015.1 NA 3464.1 0 3194.6 9 42487. 12 2235.8 0 1800.7 2009 26571. 20 8142.9 2 4502.4 9

8 1814.0 Brazil 1 1247.2 Indonesia 3 1562.5 Portugal 9 1061.8 Romania 3

2 1891.5 5 1348.4 6 1413.7 1 1175.7 0

1 1863.1 1 1514.6 3 1465.1 1 1272.9 7

1 1911.7 4 1567.0 5 1695.8 8 1394.3 2

3 1881.3 0 1828.4 4 1797.0 0 1350.7 8

0 1359.9 8 1688.3 5 1552.7 4 1054.9 3

Footwear Global Scenario and Indias share

The global import of Footwear (both made of leather as well as non-leather) increased from US$ 67.15 billion in 2005 to US$ 77.36 billion in 2009, growing at a CAGR of 3.60%. During 2009, the Indias share in the global import is 1.95%.

(In Million US$) 2005 Global Footwear India's Footwear & Components % Share of India Footwear 1045.24 1236.91 1489.35 1534.32 1507.51 1.56% 1.70% 1.84% 1.75% 1.95% export import 2006 2007 2008 2009

of67151.8 73086.4 80943.6 87839.6 77360.6 6 of 3 1 8 0

Source: ITC, Geneva & DGCI &S, Kolkata Global Footwear import includes leather & non-leather Indias Footwear includes Leather, non-leather and uppers

Footwear is the engine of growth of the leather industry in India. Indias export of Footwear touched US$ 1732.04 million in 2010-11, accounting for a share of 45.05% in Indias total export from the leather sector of US$ 3844.86 mn.

Indias Footwear export (leather, uppers & non-leather) is growing at a CAGR of 8.78% in the last five years ending 2010-11 Indias export of leather footwear had increased from US$ 974.33 million in 200607 to US$ 1460.42 million in 2010-11. Indias export of footwear components had increased from US$ 219.84 million in 2006-07 to US$ 215.03 million in 2010-11 Indias export of non-leather footwear has increased from US$ 42.74 million in 2006-07 to US$ 56.59 million in 2010-11 Indias Footwear Export Growth over the last Four Decades

Export of footwear from India increased manifold over the last four decades. Today, Indias footwear export is valued at US$ 1732.04 million, constituting 45.05% share in total export of leather & leather products.

Footwear exports has increased from US$ 99.77 million in 1980-81 to US$ 1732.04 million in 2010-11

Major Markets:

During 2010-11, the main markets for Indian Footwear are UK with a share of 19.16%, Germany 16.15%, Italy 12.46%, USA 8.04%, France 8.93%, Spain 6.45%, Netherlands 4.51%, Portugal 1.41%, U.A.E 2.45% and Denmark 0.97.%. These 10 countries together accounts for 80.53% share in Indias total footwear export.

Nearly 90% of Indias export of footwear goes to European Countries and the USA. Future growth of Indian footwear in India will continue to be market driven. The European countries and the US are major consumers for the Indian footwear.

Footwear Exports To major markets 2010-11

EU 79.15%, USA 8.04%, Australia 0.72% and others Others 12.09%

A Statement showing Indias Export of Footwear to different countries: (Value in Million US$) 2005Country 06 170.9 Germany 7 195.7 UK 8 134.3 Italy 5 131.0 USA 7 208.2 186.1 1 127.1 5 200607 217.2 3 200708 246.8 4 241.3 7 229.8 1 136.9 2 116.0 France 74.48 99.81 3 119.2 200809 229.6 5 247.0 6 221.0 9 163.0 3 123.6 144.4 5 200910 224.2 7 296.4 5 209.9 5 201011 279.8 0 331.9 2 215.8 1 139.2 1 154.7 2 111.7 Spain Netherland s Portugal UAE Denmark Australia Sweden Canada South Africa 8.26 12.11 8.52 8.49 9.87 11.07 0.64% 32.96 22.15 25.78 18.37 11.58 6.77 11.95 48.57 35.03 34.64 14.65 10.11 7.99 10.91 72.91 37.34 39.23 17.48 12.52 12.04 10.41 76.2 28.21 39.4 14.78 13.34 12.64 8.96 65.13 22.63 39.61 17.02 15.49 12.2 9.3 78.19 24.38 42.36 16.74 12.54 13.76 10.40 4.51% 1.41% 2.45% 0.97% 0.72% 0.79% 0.60% 63.7 64.57 76.69 91.86 95.99 4 6.45% 8.93% 8.04% % Share 16.15 % 19.16 % 12.46 %

Japan

3.17

3.07 156.7

4.63 226.6 1 1489. 35

8.23 252.1 8 1534. 32

5.45 216.3 7 1507. 51

7.17 282.2 3 1732. 04

0.41% 16.29 % 100.0 0%

Others

133.9 1045.

6 1236. 91

Total Source: DGCI&S

24

Future Trends: - Keeping in view its past performance, current trends in global trade, the industrys inherent strengths and growth prospects, the footwear industry aims to augment production, thereby enhancing its exports from the current level of US$ 1.73 billion.

Partnerships that spell success

Formas Kunz Brazil - This facility is coming up in the Footwear Component Park. Chennai, India.

Feng-Tay Enterprises Co. Ltd., Taiwan - This is an SEZ-proposed facility in an area of 275 acres, coming up in SIPCOT Industrial Estate, Cheyyar (TN). Feng Tay is a manufacturer of sports shoes, skate shoes and casual shoes for Nike and other global brands.

Apache Footwear, China - This FDI is coming up in Tada Mandal, Nellore (AP), in an area of 340 acres. Apache is a supplier of shoes for Adidas and has manufacturing facilities in China.

A few other examples are, Mondial (Italy), Suolificio Malaspina (Italy), Fagus(Germany), Zahonero Virgili SL, (Spain), Top Fondi (Italy), Xie Zhan Moulds (China)

Indian footwear industry poised for growth

India has state-of-the-art manufacturing plants. The footwear sector has matured from the level of the manual footwear manufacturing method to the automated footwear manufacturing systems. Footwear production units are installed with world class machines. Manned by skilled technicians, these machines help to turn any new innovative idea into reality. Support systems created for the sector have indeed served the footwear industry well. India has a well developed footwear component manufacturing industry. The future growth of the footwear industry in India will continue to be market-driven, and oriented towards EU and US markets. With technology and quality of the footwear improving year after year, Indian Footwear industry is stamping its class and expertise in the global footwear trade.

Swot Analysis

SWOT Analysis of Indian Footwear Industry STRENGTHS: Existence of more than sufficient productive capacity in tanning. Easy availability of low cost of labour. Exposure to export markets. Managements with business background become quality and environment conscious. Presence of qualified leather technologists in the field. Comfortable availability of raw materials and other inputs. Massive institutional support for technical services, designing, manpower development and marketing. Exporter-friendly government policies. Tax incentives on machinery by Government. Well-established linkages with buyers in EU and USA.

WEAKNESSES: Low level of modernisation and upgradation of technology, and the integration of developed technology is very slow. Low level of labour productivity due to inadequate formal training / unskilled labour.

Horizontal growth of tanneries. Less number of organised product manufacturers. Lack of modern finishing facilities for leather. Highly unhygienic environment. Unawareness of international standards by many players as maximum number of leather industries are SMEs.

Difficulties in accessing to testing, designing and technical services. Environmental problems.

The patriarch started this commendable journey in 1966 with the inception of Lakhani Rubber Works, a small venture to manufacture rubber components. His hardship and commitment made Lakhani Rubber Works an acclaimed name in the industry. Eight years later, he expanded his vision further when the group diversified into the manufacturing of Beach Slippers and that signaled a new dawn in the history of Indian Shoe Industry. And three years later, the Canvas Shoes followed. His endeavor and systematic approach helped the group expanding its horizons to sports shoes manufacturing in the year 1982. This never ending saga of success continued with their tie-up with Adidas India for the manufacturing of sports shoes.

The Present

Today, the group is the largest manufacturer of beach slippers in India with a production capacity of 40 million pairs per year. Also, it is the largest manufacturer & largest exporter of canvas and vulcanized shoes in India, with a production capacity of 3.5 million pairs per year. Lakhani Armaan group is the largest producer of Sports Shoes, PU Injected Sports Shoes, PVC Injected Sports Shoes and Leather Shoes with a total capacity of 5.4 million pairs per year. It also manufactures high fashion ladies and gents leather shoes for the European Union Market. The eminence of the company, in the International Footwear Industry, is apparent from the fact that it has been manufacturing sports shoes for the global sports apparel manufacturing giant, adidas. For over 80 years the adidas Group has been part of the world of sports on every level, delivering state-of-the-art sports footwear, apparel and accessories. Today, the adidas Group is a global leader in the sporting goods industry and offers a broad portfolio of products. Lakhani Armann group has been manufacturing sports shoes for adidas for the last 10 years and it is the only suppliers in India. The group is manufacturing more than 1 million pairs per year for the brand adidas including all the latest high tech shoes. Beside this, the group also has the distinction of being the largest suppliers of rubberized auto components to major automobile players in the Indian market. Year of tracking key industries extensive experience and knowledge coupled with primary

research has enabled the group to deliver specified products to their customer. Some of the names, Lakhani Rubber Work is supplying to, are : Maruti Udyog Limited, Honda Siel Cars India Pvt. Limited, GKN Invel Transmission Limited, Sona Koyo Steering Systems Limited, Escort Limited (Tractor Division), Escort Limited (Farmtrac Division), Escort JCB Limited, Escort Construction Equipment Limited, LML Limited, New Holland Tractors Ltd, Subros Limited, Ford India Limited, Krupps JBM Ltd, Fiat (India) Ltd, Motherson Sumi Systems Ltd and QH Talbros etc.

The company has been awarded by the President Giani Jail Singh for its commitment to quality. Today, after this success in domestic market Lakhani Armaan has expanded its horizon by, exporting its range of quality products to the international market in UK, Germany, France, Spain, Switzerland, Holland, Italy, Mexico, Japan and South Africa. The company has also been awarded by the Prime Minister Mr Atal Bihari Vajpai for its Export Excellence.

The group very well understands its responsibilities towards its employees, environment and society at large. It maintains social and environmental compliance to the prescribed international standards and pays due attention towards the needs of its human resources.

The future holds more promises to those who believe in themselves, who possess the attitude to fulfill their goals and aspirations. The same holds true for Mr. Gunjan Lakhani, director of the group. A man with a vision, Mr Lakhani is committed to putting the group at the vanguard of the footwear industry. Each member of Lakhani Armaan Group is committed to follow the vision put forth by Mr. K. C. Lakhani. A vision to be the industry leader. A vision of growth and prosperity for all. A vision for a better future

Brands Red Label Red Label

L-21

L-22

L-22A

L-23

M-01

M-01A

M-01B

M-02

M-02A

Touch Gold

102

102A

L-22A

103

103A

103B

104

104A

105

105A

106

106A

106B

107

107A

XYLO Sports

Energy-1A

Energy-1B

Energy-1C

Energy-2A

Energy-2B

Energy-2C

Energy-2D

Energy-2E

Energy-2F

Energy-3A

Energy-3B

Energy-3C

Energy-3D

Energy-4A

Energy-4B

sandals & slippers

JR- SD-31

JR- SD -041

DLX SD -01

DLX SD -01

C-101

SL-153

SD-908

SD -911

SD -912

C -102B

SD -161

SL -152

C-821

C-821

C-903

SLIPPER

SAILOR-405

SAILOR-406

SAILOR-701

SAILOR-501 Hawai

SAILOR-407

SAILOR-501

RUSTOM

DELUXE HAWAI

DOUBLE PLUS

HEALTH PLUS

KANCHAN

LC-01

LC-LA

NICKY

NICKY

Classic

C-DLX-07

C-DLX-13

C-DLX-21

C-DLX-21B

C-LA-13

C-LA-14

C-DLX-25

C-DLX-51

C-DLX-51B

kid wear

K-52

LC-01

LC-02

LC-03

LC-04

LC-04B

LC-06 School shoes

PK-10

PK-F2

PT

TENNIS - DLX

CLASSIC -999

GOOD TIME S

TOPPER

SCHOLAR T

GOOD TIME T - 188

SCHOLAR

TOPPER

CLASSIC DLX - 04

GENIUS

GOOD TIME -V

CLASS MATE (V)

TENNIS DLX

CLASS MATE

Lakhani Armaan Group is the largest producer of Sports Shoes, PU injected Sports Shoes, PVC Injected Sports Shoes and Leather Shoes with a total capacity of 5.4 million pairs per year. It also manufactures high fashion ladies and gents leather shoes for the European Union market. The eminence of the company in the international footwear industry is apparent from the fact that it has been manufacturing sports shoes for the global sports apparel manufacturing giant, Adidas. Lakhani Armaan group has been manufacturing sports shoes for Adidas for the last 10 years and is its only suppliers in India. Also, it is the largest manufacturer of beach slippers and the the largest manufacturer and the largest exporter of canvas and leather vulcanized shoes in India, with a production capacity of 3.5 million pairs per year. Lakhani Leather Export Division is regularly participating in the Leading Leather Footwear Fair in the Europe: GARDA ITALY GDS MICAM GERMANY ITALY

At these fairs, we exhibit the company's range of finished leather footwear based on MODEUROP. Our interaction with customers at these fairs helps us farecast fashion trends and we offer Spring-Summer and Autumn-Winter collection to our customers accordingly.

Sports The sports Shoes manufacturing facility is equipped with high end machinery for producing top of the line sports shoes. Skilled manpower and superior technology has enabled the company to produce shoes known for comfort and better performance. Over the years, the company has immensely upgraded itself in terms of quality and production capacity. Leather Lakhani Armaan has world-class facilities at its leather shoe manufacturing unit. Its a perfect blend of man & machines to achieve world-class quality standards. At Lakhani Armaan, special care has been taken to ensure that the leather footwear developed at its manufacturing facility combines the right balance of fashion and comfort. Canvas At Lakhani Armaan canvas Shoes are manufactured in the state of the art facility. The facility is well equipped to manufacture premium-quality Premoulded Canvas Shoes,

Rolled Sole Canvas Shoes and Unlined Vulcanized Shoes. The division is producing more than 11000 pairs per day for the domestic and export market. EVA Lakhani Armann has ultra modern facility for the manufacturing of EVA and Beach Slippers. The group has made the best use of the EVA injection technology by substantially increasing the product line and the production capacity. The company is again geared up to install two color EVA injection machines in its facility.

Research & Development Footwear is no longer just a functional necessity, but rather, something that is flaunted as a fashion statement. A good shoe should have both, Comfort and Style and it should adjust to your feet with every step. To survive this test of time, it is always necessary to keep abreast with the changing market trends and to innovate new and fresh. Therefore, Research and Development is a key area of operations at Lakhani Armaan. Latest trends and technological innovations are researched extensively in the process of creating new products and designs. The Quality The VISION inspired Lakhani Armaan Group ensures strict adherence to quality standard at each and every stage of operation. The group has translated its commitment to quality into clear objectives where strategies and plans are shared by the entire organization. Technology Footwear Technology is evolving at an amazing speed. Better and updated technology is the key to the quality and enhanced productivity. Lakhani Armaan Group blends premium material and advanced technology to produce footwear of international standards. The group has pioneered in latest footwear technologies like PU, EVA etc.

Marketing of Lakhani Brand

BRAND STRATEGY of Lakhani Brand

Branding in essence is effective brand strategy. It's the application of sound research into brand communications, analytical techniques, and the development of an improved strategy for your brand. Strategy is all about brand positioning. It identifies the key elements of product brand and develops a branding action plan to implement it.

Marketing of Lakhani Brand of Wootwear

Adidas histiory A history of innovation adidas history of innovation and firsts in the field of sports performance is a testament to the belief that impossible truly is nothing. The founder of adidas - Adi Dassler was inspired by a single idea when he made his first shoes in 1920 at the young age of 20. His vision was to provide every athlete with the best footwear for his/her discipline. Since then, the brand has become synonymous with innovation and passion for sports. From creating the first football shoe in 1929, the first tennis shoe in 1931, to the revolutionary introduction of football shoes with removable studs in 1954, adidas has never let impossible get in the way of its relentless quest to give athletes the technology and products they need to excel. adidas vision is to bring its passion for sport, the athlete and the product, to anyone who comes in contact with the distinctive three stripes. The Indian team Established in 1996, adidas India Marketing Pvt. Ltd. is the Indian subsidiary of adidasGroup AG. For over 80 years the adidas Group has been part of the world of sports on every level, delivering state-of-the-art sports footwear, apparel and accessories. Today, the adidas Group is a global leader in the sporting goods industry and offers a broad portfolio of products. Products from the adidas Group are available in virtually every country of the world. Headquartered in Herzogenaurach, Germany, in India, adidas products are available in all key cities. Having almost completed a decade in the country, adidas today has more than 400 stores across the country. The current focus of the company is on building a strong supply chain and a group of franchisees that share the brands passion and vision. Personifying Impossible is Nothing adidas has a firm belief in supporting and working with leading athletes who bring the passion behind Impossible is Nothing to life everyday through excellence in their field.

From football legends David Beckham, Kaka and Messi, basketball greats Tim Duncan and Kevin Garnett to tennis champion Novak Djokovic and the swimmer known as the Thorpedo Ian Thorpe, adidas brand ambassadors battle the impossible in every sporting discipline. adidas brand ambassadors in India include the countrys most famous sporting icons and god of cricket Sachin Tendulkar, one of the most destructive openers Virender Sehwag, young and exciting cricketer Suresh Raina, the 1st Indian Global Brand Ambassador- Sania Mirza and the young tennis sensation and the winner of Junior Australian Open Tennis Tournament 2009 Yuki Bhambri.

Image of Adidas & (Income group target)

Mens

Men's Products

(Footwear Clothing Accessories )

A clean look for graceful players who know how to play with finesse. The adidas football adiCORE 3 IN boot features adiPRENE cushioning and fine Superleague leather for inspired indoor play.

Huge verities for sport wear and sneakers (color also)

Questioneers Q. How the footwear market has changed in the last few years as seen by you? A. See, footwear industry is no exception when you take into account that the overall market has changed in the last decade. Everywhere the supply is more than the demand in the market. So consumers are flooded with optional offers from different brands. So the overall supply has gone up but the consumer spending per se has not gone up as per the expectations of the marketers. Globalization has also changed the market quite dramatically creating a cut-throat competition especially with China emerging as a big threat. But any overseas player finds India a tough market as India is a very vast country with diverse tastes, demands and culture. And Liberty is firmly entrenched in the Indian market fully knowing the pulse of the consumers. Q. How Lakhani emerged as a forceful brand in the footwear market? A. See, we started our business in (Haryana) way back in 1944. We made a beginning as a small retailer sourcing shoes from small local manufacturers. In 1948, we started manufacturing our own footwear. However Lakhani as a brand name came into existence in 1954. We catered mostly in domestic market in neighboring areas like Haryana, Himachal Pradesh, Punjab and some parts of Pakistan till 1964. Thereafter, export market caught our fancy and by 1968, we completely switched onto exports. And till 1983, we were 100% exported oriented unit in terms of sales. In 1983, we turned our attention towards domestic market again. We introduced a new technology of PU (Polyurethane) based sole shoes in the Indian market as we were exporting these kinds of shoes to our international customers. At the same time, the second generation of our family also entered the business. Q. Since you were not in the Indian market for long, you must have had to establish Lakhani as a brand among the Indian consumer as well as trade?

A. Yes, because of our absence for a long time in the domestic market, our immediate task was to create awareness for the Liberty brand name in the Indian market. Our advertising and promotion strategy over the years has consistently aimed at positioning Liberty as a complete family footwear brand. Initially, we focused on the upper class segment as our core target market. Later on, we shifted our attention towards the middle and upper-middle class segment also. Q. Why this change of target group? A. See, the premium segment does not offer volumes. The market up there is very small and there are too many players in fray. Therefore, in order to grow by gaining in volumes, we have moved towards catering to the middle and upper-middle class segments, which offer a far higher off-take of footwear. Q. How Lakhani positioning has changed with the changing market dynamics? A. Till few months back, the customers perceived Liberty as a comfortable, durable and great value for money brand. We are trying to enhance that perception by positioning Liberty as a more vibrant and contemporary brand too. The new positioning does not mean that we are moving away from the comfort, durability and value planks. Those will always be there associated with Liberty. So Liberty as an umbrella brand has become more fashionable in tune with the changed market needs now. Q. What kind of footwear range is offered by the Lakhani brand? A. In 1991, we took a stock of the long-term view of our business and marketing strategy. Thereafter, the Lakhani product range was divided into number of categories with their own sub-branding under the umbrella Lakhani brand .'Fo 10', fashionable sports shoes (not performance sports shoes) was the first sub-brand launched by us. We have 'Fortune' for men's formal and 'Windsor' for executive range mostly for the people who are on the move. So we have three ranges in men's shoe category. We have 'Coolers' which is a sandal for both men and women. For women, we have 'Senorita' for more fashion conscious women and 'Tip-Top' for married women who look for more comfort. Then we have 'Gliders' which caters to the entire family from 4-years to 50-years plus. It is positioned as a young brand. In Gliders, we have three categories - Glider C for children, Glider P for teenagers and Gliders A for adults. We also have

'FootFun' for children and 'Prefect' which is children's school shoe. We also have 'Warrior' which is a shoe for industrial applications with a safety benefit used primarily in factories and army. Besides these 10 sub-brands, we also have a brand called A-Ha which is a hawai chappal, catering to the lower class segment market. But A-Ha is not a sub-brand of Liberty as we do not cover it under our branding. Q. Which one is your best performing sub-brand? A. In terms of number of pairs, Gliders is the No.1 sub-brand in our portfolio as it is catering to a wider age group range and offers the maximum choice. Q. What is the share of Liberty brand in the overall footwear market in India? A. In terms of number of pairs, it is very difficult to analyze because 75% of the industry is in the unorganized sector. But according to certain Govt. agencies, India produces about 1.1 billion pairs of footwears. In value terms, the industry size should be around Rs.8,000 crore including exports. In the organized sector, we are second to Bata with a turnover of about 350 crores. Q. What makes Lakhani different from other competing brands? A. I would say the brand personality of Lakhani is different from other brands like Liberty Action etc. Unlike others, we are catering to the entire family. Bata is the only other company which offers the complete family range of footwear like us. Other players are catering to certain niche markets only such as Lakhani is more into rural segment or Action which is more into teenagers and kids only. So Liberty is catering to a very large segment of the market through its wide range of sub-brands whereas others are single brand entities. Q. What role advertising has played in creating a distinct personality of Lakhani brand? A. We strongly believe that advertising for a brand is the fuel for the growth of the company. See, consumers react to the advertising which results in a demand for a brand translating into sales for the company. Thanks to our advertising consistently over the years, Liberty has been perceived as a brand which is young, modern and offering new and international range of footwears. But in the last two years or so, we felt that

ads irrespective of the TV, press or outdoor mediums were not adding any value so we toned down our ad spend. Q. But don't you think this drop in advertising affected the consumer's mind as he finds the brand less visible then before raising doubts in his mind? A. Yes certainly, low visibility does affect the brand's share in the consumer's mind. But business was low and we tuned down the advertising to a minimal level. However, we took stock of the situation and as business has improved, we have again upped our ad budget. This financial year we plan to spend around Rs.12 crore on our advertising. We have changed our ad strategy also by opting for advertising in the peak seasons only instead of advertising through out the year. Even our advertising creatives have also undergone major change. Our ad campaign has become more youthful and catchy communicating the new fashionable appeal of Liberty brand in a more effective manner. Q. How loyal are the Lakhani customers to the brand? A. We fare very well on the loyalty parameter among the customers, However, as I said earlier, in the last few years brand loyalty among Indian consumers has eroded and foreign brands/products are perceived to be better than Indian products/brands. But our experience shows that customers are now realizing that among the footwear products/brands Lakhani is still the best brand in the country and Liberty customer loyalty is further improving. Q. Which are the major channels of sales of Lakhani footwears? A. Well, we sell through 350 exclusive Liberty showrooms and more than 4000 multi brand stores spread all over India. But the retail stores are neither owned nor managed by us. Q. There has been a trend to push sales through factory outlets. What do you think about it? A. The trend of pushing sales through factory outlet has been borrowed from Western countries in India. However, I feel that Indian markets are not as matured as Western markets. Neither we have high street shopping concepts in whole of India nor the customers are short of time. Yet percentage of factory outlets is very high and they are very very visible on main highways. The customers, to take advantage of discounts,

prefer to buy the products at factory outlets which erode the value of the brand and business shifts from prime outlets to secondary outlets. I feel that Indian companies should not push factory outlet concept in the prime markets highly visible sites for at least next 10 years. Q. What are your plans for the future? A. I think Indian consumer is now more aware of international trends and shopping standards as our markets are becoming an important part of the global market. Being associated with exports for last more than 40 years, we have an advantage of providing international quality products to Indian consumers and in terms of technology and styling, we are not behind international trends. However, we do not provide international shopping experience to Indian consumers and therefore in the last 3-4 years, we have made conscious efforts to upgrade the standards of our retail outlets and we shall continue to do so to make the shopping enjoyable for the Indian consumers. Moreover we shall continue providing the latest high quality products to Indian consumers at affordable prices, which are not only comfortable but durable too.

CONCLUSION

To conclude, it can be said that through the global sports outfit retail industry has reached its maturity, but the Indian sports retail industry is still at its infancy. But with the huge potentiality existing in the Indian market, it is expected to grow in leaps and bounds in the future. For a start, retailers need to invest much more in capturing more specific market. Intelligence as well as almost real time consumer purchase behavior information. The retailers also need to make substantial investment in understanding/acquiring some advance expertise in developing more accurate and scientific demand forecasting models. Re-engineering of product sourcing philosophies-aligned more towards collaborative planning and replenishment should then be next on their agenda. The message, therefore for the existing small and medium independent retailers is to closely examine what changes are taking place in their immediate vicinity and analyze weather their current market offer a potential redevelopment of the area into a more modern multi-option destination. If it does, and most commercial area in India do have their potential, it would be very useful to form a consortium of other such small retailers in that vicinity and take a pro-active approach to pool in resource and improve the overall infrastructure. The next effort should be to encourage retailers to make some investment in interior of their respective establishment to make shopping an enjoyable experience for the customer. Finally, it is important to note that these strategies are not strictly independent of each other; value is function of not just price, quality and service but can also be enhanced by personalization and offering a memorable experience. In fact,

building relationship with customer can by itself increase the quality of overall customer experience and thus the perceived value. But most importantly for winning in this intensely competitive marketplace, it is critical to understand the target customers definition of value and make an offer, which not only delight the customers but also difficult to competitor to replicate.

Bibliography
BOOKS REFERRED:

1. Marketing Ravi Shankar 2. Marketing Rampal Gupta

SITES VISITED: www.historyoffootwear.com

www.fotwear.com

www.datamonitor.com www.addias.com www.lakhani.com

Annexure -1 Indian Footwear Market Forecast to 2012 India is standing on the threshold of a retail revolution and witnessing fast changing retail landscape, with footwear market is set to experience phenomenal growth in coming years. Besides, the ongoing financial crisis is unlikely to have any significant impact on the Indian footwear market as the demand for Indian footwear will continue to grow, according to our recent report, Indian Footwear Market Forecast to 2012. Demand for high quality footwear produced in Europe and other parts of the world is expected to slowdown as people will look for medium or lower priced products. This is a good sign for the Indian footwear industry since India along with China is the main supplier of low-priced footwear. However, Chinese producers are facing serious problems due to rising labor cost, which has risen by around 40% since January 2008, and currency appreciation. Chinese products, which used to be cheaper by around 10% compared to the Indian products, are no longer cheaper. Implementation of the European Union (EU) anti-dumping duty . Under these circumstances, India is the only major source for supplying medium and low-priced footwear. Moreover, most of the global footwear manufacturers, particularly European manufacturers who were sourcing from China, have now turned to India. Nike, Addidas and Puma are some of the footwear majors are expected to route parts of their production and purchase out from China to India. This report provides extensive research and in-depth analysis on the Indian footwear market. The detailed data and analysis given in the report will help the client to evaluate the leading-edge opportunities critical to the success of the footwear market in India. The forecasts and estimations given in this report are not based on a complex economic model, but are intended as a rough guide to the direction in which the market is likely to

move. This forecast is based on a correlation between past market growth and growth of base drivers. Our report also provides forecasts on -Indian Footwear Market (2009-2012) -Mens Footwear (2009-2012) -Childrens Footwear (2009-2012) -Womens Footwear (2009-2012) -Casual Footwear (2009-2012) -Mass Footwear (2009-2012) -Sports Footwear (2009-2012) -Premium Footwear (2009-2012) -Footwear Export (2008-09 to 2010-11) Key Players This section provides business overview and SWOT analysis of key players in the footwear market. The key players discussed in the report are Lakhan, Bata India Limited, Adidas AG and NIKE, Inc