Bata fights to stay young and relevant
The Swiss shoemaker focuses on new designs and expands its line-up to get in step with changing customer preferences
It is a rare sign of protest from a brand that is used to being trod upon. Bata, a near-generic term for shoes among a generation of Indians, has sent out a public notice over a recently released trailer of the movie Jolly LLB 2. The company has objected to a dialogue where actor Akshay Kumar is berated for being the type of person who wears the Bata brand of shoes by Annu Kapoor. The company believes this devalues the brand in the minds of the audience and could be, it says in the notice: “perhaps at the instance of some competitors of (Bata) whose products are promoted by Mr Akshay Kumar as a brand ambassador.”
Faced with growing competition, Bata India is getting aggressive. Not particularly known for its marketing savvy or feistiness, the company is fighting back to build on the trust it has built with the Indian customers. As competition from domestic and imported labels has increased — at last count there were around 15 imported and 10 domestic brands — and online marketplaces have cannibalised physical retail spaces, Bata realises that it needs to protect its turf. It also needs to get the numbers back in its favour: For the quarter ended September 2016, the company registered a 36 per cent fall in its net profit while total income increased by just two percent as compared to the same period the previous year. (The company has reported an increase in profit before tax, however.)
Rajeev Gopalakrishnan, president, South Asia, Bata said that the brand that has been around in India for nearly 85 years has been through the many ups and downs the country has seen. He says that the brand’s identity and positioning has been carefully crafted. The customer perceives a strong value proposition and that has stood the company in good stead, Gopalakrishnan said. According to the company, Bata has close to 15 per cent of the organised market share in the country today.
True, but the market for shoes has seen huge change in the past few years. Customers are more discerning about design, size and most people are looking for more than just a regular pair of shoes for all occasions. Purchasing habits and tastes are transforming rapidly. Bata is catering to the new customer said Gopalakrishnan; it has introduced segment specific brands such as Bata Tennis, Bata Bullets and a few others in the youth category. For the sports segment, it has Weinbrenner for outdoor hikes and for the young, Footin, which is a design driven label.
Bata relies on consumer insights to formulate its future plans as opposed to reacting to competitor’s moves, adds Gopalakrishnan. “We have a good balance of style and comfort in our entire range, with the right pricing,” said Gopalakrishnan. He explains that the company is not looking to give up the brand’s core values of value for money, trust and comfort, but it is aware of the need to marry that with style. It is also tuning in to the new shopper with an omnichannel facility that lets people buy online and pick up from a store nearby or reserve a style online for subsequent store trial.
The company is also heeding analysts’ criticism that it is losing out because of an unfavourable product mix. According to a research report by Motilal Oswal, the company offered 400 new products in 2016 versus 130150 last year. The company is also paying more attention to differentiating its categories — in terms of price and design. The top of the brand ladder is occupied by the US label Hush Puppies, for which Bata holds the license for the Indian market. The company is also getting aggressive with its children’s ‘Bubblegummers’ brand. The segment has huge potential with nearly 18 per cent of India’s population below 10 years of age, the company said. The company has also obtained a license for using the ‘Disney’ label for a collection of footwear according to a report from ICICI Direct.
The company says that it will double its advertising budget in 2017 and launches are set to get more frequent. “We are all geared to communicate our new focus on ‘Bata the brand’ in the near future,” said Gopalakrishnan. The focus is on young buyers who go for international labels, often available at competitive prices online. Bata has set up a team of designers to cater to the special needs of this segment and says that many new launches in the coming months will reflect the brand’s new look.
It is also investing heavily in store windows, places where it believes it can best draw attention to its latest collections. It has also engaged in several online forums where customers are being encouraged to come up with their preferences. To increase penetration, Bata also plans to open 100 more stores in the coming year. It has also stepped up its online presence and in 2015-16, more than 3.8 lakh pairs of footwear were sold online and the business clocked a turnover of ~36 crore, the company says.
“We are speaking the language of the youth,” says Gopalakrishnan. The brand is also more active on social media and trying to get a better grip on contemporary styles and fashion. But can it bridge the generation gap?