INTRODUCTION

The footwear sector is a very significant segment of the Leather Industry in India. Footwear is the engine of growth for the entire Indian leather industry and India is the second largest global producer of footwear after China, accounting for 14% of global footwear production. of 14.52 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 for footwear and leather products are located in: Tamil Nadu - Chennai, Ambur, Ranipet, Vaniyambadi, Trichy, Dtndtgul West Bengal - Kolkata Uttar Pradesh - Kanpur, Agra & Noida Punjab - Jallandhar Karnataka - Bangalore Andhra Pradesh - Hyderabad Haryana - Ambala, Gurgaon, Panchkula and Karnal Delhi

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. MNC Brands sourced from India MNC Brands Sold in India Indian Brands sold in India Red Tape, Bata, Liberty , Khadims, Lakhani, Metro, Action

Acme, Bugatti, Clarks, Aldo, Bally, Clarks, Ecco, ColeHann, Deichmann, Ecco, Florshiem, Ferragammo, Elefanten, Florsheim, Gabor, Hush Puppies, Lee cooper, Hasley, Hush Puppies, Lloyd, Marks & Spencer, Nike, Double H, Justin, Marks & Nine West, New Balance, Spencer, Nautica, Nike, Nunn Reebok, Rockport, Stacy Bush, Reebok, Salamander, Adams Stacy, Zaara, Lumberjack, Adams, Tony, Lama, Next, Bally

Nearly 75% of Indias Export of Footwear is to the European Countries and the USA. The Indian Footwear Industry provides employment opportunities to a total of 1.1 million people, mostly from the weaker sections of the society. Out of this, about 0.2 million are employed in the organized sector, 40% of whom are women. Remaining 0.9 million people are engaged in unorganized footwear sector like rural artisans, cottage and household units etc. 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.

MACROECONOMIC TRENDS IN LEATHER TRADE

Footwear is the engine of growth of the leather industry, currently accounting for an export value of US$1212 million, holding a major share of 41% in Indias total leather trade. Considering this fact, we have set an ambitious target of US$ 4.5 billion in respect of Footwear export from India by 2010-11 where the overall export of leather products will reach US$6.98 billion, wherein footwear alone will account for a share of 65% in Indias total leather export trade.

Special Economic Zone (SEZ) Parks: A Footwear SEZ Park is being established in Tamil Nadu, at the SIPCOT Industrial Estate at Irungattukottai, situated at a distance of 34 kms from Chennai. A land of 150 acres has been earmarked for this purpose and it is proposed to make available about 105 acres of saleable land to domestic as well as international footwear companies. The State Industries Promotion Corporation of Tamil Nadu Ltd (SIPCOT) is the implementation agency for this project. The Footwear Park will be developed on global standards, with adequate common infrastructure facilities such as Design Studio, testing and on-site training facilities, Display Centre-cumWarehouse, non-conventional energy and other energy saving applications. Another SEZ for Leather Products is also under way at Ranipet in Tamil Nadu, in an area of about 260 acres. Apart from the above, there is a proposal to setup 10 Small Integrated Leather Parks (SILP) in different parts of the country.

Future Prospects: Future growth of Indian footwear industry in India will continue to be market driven and oriented towards the European and the US markets. Technology partnerships with major merchandising houses in USA and market leaders in Europe are decided advantages in the integrated developmental plan of India. Investment backed technology support for footwear component industry is being sought to be outsourced. Footwear is the engine of growth of the leather industry, currently accounting for an export value of US$1212 million, holding a major share of 41% in Indias total leather trade.

Country-wise analysis
The major markets for Indian Leather products are Germany with a share of 14.05%, Italy 13.78%, UK 11.91%, USA 8.82%, Hong Kong 7.70%, Spain 6.10%, France 5.64%, Netherlands 3.84%, UAE 2.14% and Australia 1.43%. These 10 countries together accounts for nearly 75.41% of India's total Leather products export Overall positive growth is seen in markets like Germany 19.18%, UK 15.14%, Italy 15.89%, France 12.72%, Spain 14.15%, Netherlands 32.29%, Australia 26.33% and Denmark 16.04%. Overall decline is seen in markets like USA 3.43%, Hong Kong 4.21%, Greece 3.46% and South Africa 21.97%.

Trend in Major Importing Countries of Leather Products Country (In Million US$) Germany Italy UK Spain France Netherlands Australia Denmark U.A.E. Portugal China Sweden Canada Hong Kong USA Saudi Arabia Apr-Mar 2008-09 410.08 413.35 359.84 185.78 174.04 100.82 39.38 42.30 62.55 49.92 42.52 29.01 32.17 279.72 317.59 15.77 Apr-Mar 2009-10 488.72 479.04 414.32 212.07 196.17 133.37 49.74 49.08 74.53 56.06 51.90 38.81 35.90 267.93 306.69 15.53 19.18% 15.89% 15.14% 14.15% 12.72% 32.29% 26.33% 16.04% 19.14% 12.31% 22.05% 33.79% 11.58% -4.21% -3.43% -1.56% % Variation

Country-wise export of Footwear from India 5 years

(Value in Million US$) Country Germany UK Italy USA France Spain Netherlands Portugal UAE Denmark Australia Sweden Canada South Africa Japan Others Total Source: DGCI&S 2003-04 146.23 154.44 107.65 89.17 50.84 38.06 20.09 15.12 14.94 11.7 8.44 6.29 8.71 7.23 2.01 86.81 767.73 2004-05 164.73 192.62 103.63 107.34 64.84 46.86 20.03 18.75 18.36 13.75 8.00 6.95 9.84 6.72 2.55 125.8 910.77 2005-06 170.97 195.78 134.35 131.07 74.48 63.7 32.96 22.15 25.78 18.37 11.58 6.77 11.95 8.26 3.17 133.9 1045.24 2006-07 217.23 208.2 186.11 127.15 99.81 64.57 48.57 35.03 34.64 14.65 10.11 7.99 10.91 12.11 3.07 156.76 1236.91 2007-08 245.92 240.77 226.10 136.01 115.24 75.22 72.49 36.86 36.61 17.44 12.48 12.04 10.41 8.54 4.63 225.07 1475.83 CAGR Growth % 13.87%. 11.74%. 20.38%. 11.13%. 22.70%. 18.56%. 37.82%. 24.95% 25.11% 10.49% 10.27% 17.62% 4.55% 4.25% 23.19% 26.89% 17.74%

In a Nutshell: -

India's export of Leather & Leather Products has reached US $ 3.47 billion in dollar terms and Rs.14,000 crore in rupee terms. In dollar terms, there has been an export growth of 13.67% and in rupee termsl.13% Footwear alone holds a major share of 42.44% in India's total leather products export trade As against the export target of US $ 3042 million for the financial year 2007-08, the achievement was 114.32%

PLANNING IMPORT OF LEATHER IN INDIA TARIFF & PHYTOSANITARY BARRIERS: Sanitary and phytosanitary measures necessary for the protection of human, animal or plant life or health, provided: Such measures are not inconsistent with the provisions of the Agreement; They are applied only to the extent necessary; They are based on scientific principles and are not maintained without sufficient scientific evidence; They do not arbitrarily or unjustifiably discriminate between members where identical or similar conditions prevail including between their own territory and that of other members, and They are not applied in a manner which would constitute a restriction on international trade.

Non-tariff barriers falling in this category are ban on import of goods (textiles and leather) treated with azo-dyes and pentachlorophenol, ban on use of all hormones, natural and synthetic in livestock production for export of meat and meat products, stipulation regarding pesticides and chemicals residues in tea, rice and wheat etc., and requirement of on-board cold treatment for fruits and vegetables export.

SELLING LEATHER FOOTWEAR

Marketing Strategy: o o o o Marketing strategy is an important component of the company's success. It should be positioned as a premium-brand, selling well-designed and expensive products. It should lure its customers with a marketing strategy centering around a brand image which can be attained by distinctive logo and a cool advertising slogan. It should promote its products by sponsorship agreements with professional teams.

Marketing Strategy at BATA: Bata is reinventing itself and has introduced the concept of flagship stores to provide complete and unique shopping experience at par with their stores abroad. International trends, relaxed ambience, great products, and courteous staff at the new-look Flagship store are all a part of Batas new marketing strategy. Reposition brand 'Bata' - High brand recall for consumer lead to higher footfalls and better conversions Target new market (ladies and kids) - Filling the missing 45% pie of footwear market Improving shoe line - Launching international brands, focus on style will attract new young customer class

PRICING STRATEGY: Strategy should be to scale up in all directions, i.e.to widen customer base by introducing products for all categories of customers, through different channels of distribution. With the implementation of VAT at a flat rate of 12%, the company has taken a long term view of their pricing strategy which has been revised from the April 2005. Strategy of introducing various price points to cater to different income groups will help them in garnering a greater market share. Moving up the value chain by introducing brands to cater to higher income groups as well as putting up retail shops in malls will auger well for the company. This strategy will help establish their brands as well as increase margins. Another interesting aspect is the company's change in focus from men's shoes to concentrating on shoes for the entire family.