Consumption to Revive in Coming Quarters, E-Commerce to Drive Growth: Bata MD & CEO

Terming "sluggish consumption" as "temporary", leading shoemaker Bata expects a revival in coming quarters, helped by festive season demand and retail expansion, according to its India Managing Director and CEO Gunjan Shah.

The company expects e-commerce, which is now a "profitable” and “viable” business, to be its growth driver as it has been expanding online sales through its portal and channel partners.

Besides, Bata as part of its strategy to attract new generation buyers is also investing in store renovations to become more appealing and trendy and in new relevant products with affordable propositions to increase its play further. Young buyers account for around 40 per cent of its transactions.

Moreover, it would also expand its apparel range to 200-plus stores from 70 stores at present. It will also add 13 exclusive outlets of its athleisure Brand ‘Power’ to take the total count to 15 by the end of 2024, said Shah.

The company is also investing in technology transformation on automation in terms of inventory management, which will leverage better productivity, he said.

Bata earlier this month reported a 1.4 per cent decline in its consolidated revenue from operations to Rs 944.63 crore for the June quarter and expected a better performance in the second half of this fiscal.

When asked about the outlook, acknowledging a slowdown, Shah told PTI: "Yes, in the near term, we have seen some sluggish consumption and therefore impact on top-line growth."

However, he also added the company is continuing its "efforts, investments and various thrust areas and initiatives" hoping this phase to be "temporary" in nature.

"We should look forward to even in the near term, with the festive season coming up, we should see a bounce back from a consumption point of view," he added.

Bata India Chairman Ashwani Windlass also said there was "some softness in the lower and mid-end of the market". This was due to factors such as general elections and heat waves.

When asked about growth drivers, Shah said it would be in line with the longer-term strategy of the company as offering relevant propositions, retail expansion, both online and offline, and investments in marketing, brand and consumer experience.

Bata will also continue its premiumisation journey by adding value to its products, however, it would not be at the cost of its traditional consumers who expect value for money and are its "key pillar", said Shah.

Citing the success of its brand Floatz, under which it is offering casual and comfortable footwear, Shah said its alternative in the market will be available at 2X or 3X of the price.

"So there is an opportunity for us to create that value for money perception while making sure that we continuously premiumise the portfolio. So I think we will straddle both," he added.

Currently, shoe pairs priced Rs 4,000 and above contribute to around 20 to 25 per cent of the segment.

"We will expect premiumisation to continue, but even within that, we want to make sure that we are able to give value for money proposition to consumers, but the contribution will keep inching up. That journey has been on for multiple years," said Shah.

Shah expects e-commerce to drive its growth further.

"E-commerce has been the fastest growing business for almost three to five years and continues to grow faster than the overall business. It is now in low double-digit contribution, and my sense is that it will keep growing faster than the overall business, so it will drive our growth," he said. Adding to this Windlass said: "Our online business is a profitable and viable business."

India is the biggest market for Bata Shoe Organization. It had a revenue of Rs 3,478.41 crore in FY24.