From continuously raising its advertisement budget which was significantly hiked in FY17 to getting a celebrity endorser this year, Bata wants to get heard by its target customers, the millennials.
At the forefront of its brand push would be women’s range which is so far dominated by unorganised players, says Bata’s top management at the sidelines of the annual general meeting of the company.
“We substantially increased our advertising budget for 2017 and plan to raise the budget every year for sure and you will see a celebrity endorser soon,” Rajeev Gopalakrishnan, managing director and chief executive officer, Bata India said.
Women customers would be the key focus for its new advertising thrust.
“Women category has been highest selling category and we have been giving the most stylish and comfortable shoes for our women. It is something we have taken very strongly for the past few years and has been running a TV campaign ‘Me and Comfortable with It’ aimed at women customers,” Gopalakrishnan on the sidelines of the annual general meeting.
“We are strengthening our focus on targeting the ‘Young India’ which is expected to redefine the fashion footwear market. We are also taking new initiatives to the growing needs of footwear of our women customers with a new television campaign recently been introduced targeting them,” Bata India chairman Uday Khanna said.
Even as it focuses on premiumisation in the urban areas, Bata has adopted the franchisee model to get deeper into the rural markets, which Gopalakrishnan says is working fine for the company.
“The franchisee model is a good opportunity for us to scale up. We have around 50 franchisee stores in tier-III and tier-IV cities doing about Rs 7-10 millions of sales a year. In five years’ time, we would look at 300-400 stores under this model’ he said.
Bata resorted to a franchisee model for expansion in the Nineties but abandoned it within a short time after suffering losses.
As for its own stores, Bata would continue to open 100 stores a year for the next couple of years as Gopalakrishnan sees opportunities to grow from here on.
“Each store would be between 2,500-2,700 sqft in high streets, malls as well as standalone,” he said, adding the smaller franchisee stores would be selling up to a price point of Rs 1,500 for sandals and Rs 2,000 for covered shoes.
But it’s the range of up to Rs 500 that would be chiefly sold through its small town and rural franchisee stores as such footwear are now taxed at a low goods and services tax (GST) rate of 5%.
Such products contribute 35% of its overall revenues.
There have been some teething issues in the adoption of GST in the footwear market though.
“While we and our wholesalers are GST ready, it’s the sellers down the line who are not fully compliant. But that’s I guess is true for many industries as well,” Gopalakrishnan said.
...& ANALYSIS
- Bata is continuously raising ad spends and even getting a celebrity endorser
- Women customers would be the key focus for its new advertising thrust
- It would continue to open 100 stores a year for the next couple of years
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