Top Footwear Stocks in India 2023 – Sector Market Size, Share Market, Present status, Future Prospects

India is known to be the world’s 2nd largest footwear consumer and producer, one step behind China. India contributes 10.7% to global footwear production. As far as consumption is concerned, India ranks 2nd in the world with a share of 11.7%.

The combination of leather, footwear, and accessories market in India contributes nearly 2% of the country’s GDP and is one of the major job producers too. The country’s footwear industry is projected to rise 8 times by 2030 as per a research report on the footwear market. With this rise, the domestic footwear market’s value is set to reach $15.5 billion at the end of this year and a sustainable growth rate of 11% in the next five years. 

India’s non-leather footwear market will likely go beyond the $6 billion mark in the next two years. World over, the majority of footwear consumption is non-leather and India is also witnessing a similar trend. Thus, revenue generation from the country’s non-leather footwear market has also grown substantially. (Source : InvestIndia)

Here is an overview of the footwear sector in India for investors who wish to explore investment opportunities in it.

What does the Indian footwear sector include?

The Indian footwear industry can be categorised into two main segments, leather and non-leather. The leather sector is driven by robust domestic demand. However, the non-leather footwear segment is presently growing in India while indicating a huge growth potential in the next few years. As far as global consumption is concerned, nearly 86% of the world’s footwear consumption has turned towards non-leather in volume terms.

The industry sees almost 75% of its non-leather footwear production coming from the country’s unorganized sector. This segment is dominated by micro, small, and medium enterprises (MSMEs) located in cities like Chennai, Mumbai, Kolkata, Kanpur, Agra, Delhi, Jalandhar, Ludhiana, Faridabad, Pune, Calicut, etc.

Recent growth in the footwear sector

The majority of the footwear sector’s growth is attributed to the following:

1. Import/Export – India is one of the top footwear exporters, mainly exporting to the United States, China, Germany, United Kingdom, and France. In imports, India is the world’s 10th largest importer as far as quantity is concerned.

2. State-of-the-art manufacturing facilities – The Indian footwear sector has come a long way from manual footwear manufacturing to highly automated manufacturing systems. The country today boasts of world-class machines that are manned by skilled technicians in the footwear industry. These machines are designed with innovative ideas that focus on efficiency and limiting costs.

Indian footwear market’s future growth is likely to continue being market driven and with a strong focus on the EU and US markets. As technology and quality in the footwear industry continue to improve every, the Indian footwear market is setting new benchmarks or quality expectations and expertise in manufacturing.

(Source – https://newsonair.com/2021/07/10/indias-footwear-industry-expected-to-grow-8-times-by-2030/)

What will drive future growth in this sector?

Some of the factors that are driving growth in the footwear sector are:

The Indian footwear sector is witnessing exponential growth due to:

• Sector-friendly investment policies have been implemented by the government, such as allowing 100% foreign direct investment (FDI) via automatic route.
• Sector has now been de-licensed and de-reserved.
• Technological advancements, innovation, availability of skilled manpower, e-commerce boom, and changing interests of buyers.
• Government initiatives like Make-in-India, Start-up India, and Self-reliant India, have also led to the sector’s growth and expansion.

Did you know

The Indian footwear industry alone employs 2 million people. As per a report by the Department for the Promotion of Industry and Internal Trade (DPIIT), the footwear sector is capable of generating 250 jobs per Rs. 1 crore of investment. For every 1,000 pairs of footwear manufactured by the sector per day, 425 new jobs can be created across footwear manufacturing, retail and allied segments.

Source – https://www.financialexpress.com/lifestyle/the-growing-indian-fashion-and-lifestyle-market-has-given-an-impetus-to-the-footwear-industry/2379005/

Possible hindrances to growth in this sector

The Indian footwear sector is mostly unorganized and scattered across the country, with states like Uttar Pradesh and Tamil Nadu being the biggest manufacturing hubs. Although the sector has seen technological transformation and efficiency, most of the manufacturing remains handmade. Some of the other challenges faced by the industry are:

• Absence of stock rotation results in outdated products
• Large scale Customer Initiated Returns (CIR)
• Higher expenses associated with reverse logistics
• Lack of timely and efficient product delivery
• Scattered locations of warehouses and multiple stores
• Lack of efficiency in managing e-commerce and offline sales
• Lack of effectiveness in stock utilization
• Mismanagement of returns and cancellations

Top stocks in the Indian footwear sector by market capitalization

Mentioned below are the top footwear companies (as per market capitalisation) listed on the Indian stock exchanges. (source – https://www.moneycontrol.com/stocks/marketinfo/marketcap/bse/footwear.html)

1. Relaxo footwear – Market cap of ~Rs. 28,000 cr

Relaxo Footwears Ltd began manufacturing Hawaii slippers and gradually diversified into manufacturing other footwear variants, including casuals, school shoes, joggers, and leather shoes. It is one of India’s quality-conscious footwear giants and is known for its progressive approach. Some of the company’s product offerings include Hawai, Flite, Canvas, Bahamas, Leatherite, Dip, and Joggers.

2. Bata India – Market cap of ~Rs. 25,000 cr

Bata India Ltd is a well-known manufacturer of footwear in the Indian market. The company has a variety of offerings across different quality ranges, including leather shoes, rubber shoes, PVC shoes, etc. Some of its brands are Hush Puppies, Marie Claire, Dr Scholls, North Star, Bubblegummers, Power, Comfit, etc. 

3. Metro brands – Market cap of ~Rs. 16,000 cr

Metro Shoes has a wide network of exclusive showrooms spread across nearly 206 prime locations in the country. It started off as a single store outlet in Mumbai and has today grown into a national brand offering fashion footwear and accessories. The company boasts of a presence in more than 100 Indian cities. The customer-centric company offers an extensive footwear collection along with accessories to cater to the different lifestyle needs of individuals. 

4. Mirza Intl – Market cap of ~Rs. 2,000 cr

Mirza International Ltd. is one of India’s largest exporters of finished leather apart from shoe manufacturing. The company operates under the brand names Red Tape, Oaktrak and Red Tape Gal. Other business segments of the company include the shoe and tannery divisions.

5. Khadim India – Market cap of ~Rs. 422 cr

Khadim India Limited is an Indian footwear retailer operating through the brand Khadims. Its operations include manufacturing and sale of footwear. The company has close to 260 retail outlets across 22 states in the country. It also has two retail stores with the brand name Khadims Egaro that offer footwear, jewellery, garments, gold, and also groceries. 

Conclusion

The Indian footwear sector has come a long way, considering the variety of products available in the market today. The industry is increasingly focusing on the changing demands and tastes of new-age consumers. With the help of internet penetration, there is also a shift in customer preferences for quality, design, etc. This industry’s future looks bright as experts see only increasing demand both in the domestic market and internationally.

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