Footwear brand Bata has a rich history. Founded in what is now the Czech Republic, the brand is under Canadian ownership. Despite its foreign roots, the brand has a deep connect with India and its people. For years, Bata was the go-to brand for school shoes in India. But as India grows up, the company is working hard to reconnect with the country’s millennial generation. Sandeep Kataria, 49, CEO of the company’s India business, Bata India, tells Fortune India in an interview how the company is going about this reinvention. Edited excerpts:
How have you seen the customer evolve and grow, and how has Bata adapted to the changing Indian customer?
There are two aspects when it comes to Bata and the Indian customer. One is the share of the mind and the other is the share of the wallet. If you ask anyone in the country to name three footwear brands, Bata would be one of those three. The catch here is how to make sure it translates into a share of the wallet. At the one end, we want the millennial generation to reappraise us. They have all used them in school, but now I need to force a reconsideration. That is where marketing campaigns and brand ambassadors like Kriti Sanon and Sushant Singh Rajput [Bollywood actors], or Smriti Mandhana [woman cricketer] come into play.
The second is making sure our traditional range—the comfort range which we are well known for—also starts moving up in style. And the third is to bring in new categories. For example, as trends change, casual shoes are pretty much what the millennial wears to office these days. Therefore, we have a new range to adhere to this change.
Has e-commerce been a challenge or a boon for Bata India?
We are very bullish on e-commerce. It has been one of our fastest-growing channels. Personally for me, omnichannel and connected commerce is a lever for productivity gains. It is a lever for reaching out to new consumers and for customer service. When you look at customer experience at the store, sometimes the right size or the right fit of the product is not available. That is where e-commerce comes into the picture. We take the order there and we deliver it to the customer’s home within 48 hours. The customer doesn’t need to know what is happening in the backend. The customer can very easily come back to the store and exchange the product if needed. E-commerce is a real productivity gain. It is not that I am keeping stock to ship out. All I am doing is connecting all the stores. Therefore, there are huge productivity gains. Selling out of partner websites like Flipkart and Amazon is also growing very fast for us. Including our own website, the whole channel contributes 5-10% to our turnover. We are also using e-commerce to test our new ranges and designs because online customers are quite different from those who come to the store.
Are discounts by e-commerce players like Flipkart and Amazon hurting your business?
There are two ways we approach e-commerce. One is we have a large number of exclusive lines for e-commerce, which are specifically designed for the online customers. Therefore, the range you find in e-commerce channels, very often you won’t find in bricks-and-mortar stores. As far as discounts are concerned, yes, they do happen sometimes, but not too often. For most times of the year, you would not find a very significant difference.
If you are giving a bit of a discount, I would much rather you come into my store, test it out and order that [product] online because it saves me the costs of possible returns, refunds, or changing the product.
So I am less hassled about the discounts on e-commerce. The biggest joy for us on e-commerce is that at the end of the day we have 1,500 stores but even then we reach 500-odd towns. India has more than 750 towns with a population of more than 100,000. So e-commerce gives us a great reach.
What will be your distribution strategy as you go ahead?
Our distribution strategy is built on three pillars. The first is our own company stores. Here we want to get the right mix of where we want to be present, what product lines we want to offer, and what are the new concepts that we can bring in. For example, we just opened our new Power store, a new Bubblegummers store, and a couple of Bata Women stores.
The second is opening up in new towns and new trade areas. India is growing at such a fast pace that we need to be in tandem with new trade areas. To cater to that we have both engines going. We have our own company stores, we want to open roughly 75-100 [new stores] per year.
This year we are also entering the franchise-owned, franchise-operated store model. So we are partnering with entrepreneurs in tier 3 and tier 4 towns. That is something we want to pursue. Our plan is to have 500 such stores. This year we will end up with 140 such stores. We are looking for franchisees. The third pillar is to use e-commerce to reach pockets which are more than just our physical stores. Whether it is through our own website or via our partners’, the aim is to offer the full range. When we started off, we had a limited range, but we want to offer a much wider range with all the stock available in any store in the country.
How successful have you been in repositioning the Bata brand with Indian millennials?
I think there is many a mile to go before we sleep. We have made our first steps. Perceptions don’t get made or broken overnight. What we have done and what is showing up in the sales numbers and footfall is that we have made the right steps. Is it a job done and completed? Not yet. How do you go about completing the job? You use things like mass media, but there is a role for each of the sub-brands to play. While Bata does evoke the imagery of school shoes, there is also an image of comfort—within the budget. It is a trusted brand with dependability. Our aim is to bring these values across the range. Our very strong local roots also help a lot. We are able to get the local nuances and local needs much better. We have a large manufacturing operation here, we have a design centre here.
(The story was originally published in the Feb, 2019 issue of the magazine)
