Bata India will focus more on rural areas

Renowned shoemaker Bata India will not be opening 100 stores like it does every year. Instead it will now concentrate on growth from existing outlets. Also, it will hand out more franchises to tap into rural and semi-urban markets. It plans to add 200-300 new stores under this model.

Till now, Bata has run its own stores and so franchisee-run stores will be a new strategy for the company. It has 1265 retail stores across 500 cities and only recently, it started experimenting with the franchise model. Thirty stores have been launched in Gujarat, Madhya Pradesh and Uttar Pradesh. In the last fiscal year, Bata added only 26 new stores. In the present year, it hopes to turnaround at least 40-50 loss-making stores.

The company also has plans to install online kiosks in some of its major retail stores for consumers who want ease and convenience of shopping. Also, on the anvil is an investment of Rs 20-25 crore in the next one-and-half to two years for the modernisation of Batanagar factory, which is situated 18 km south of Kolkata. Also, the company will spend Rs 50 crore for its retail expansion. A total of Rs 80-100 crore will be invested in a year.

Rajeev Gopalakrishnan, managing director and chief executive officer, Bata India, points out that the rural market has a lot of potential but to reach out to this market, the company has to offer a different product line. The company already has products that can do well in the rural markets but will have to develop more products which are priced between Rs 200-1000 a pair.

The company is also wants to scale up online sales profitably. They are expected to grow to 5 per cent of the company’s total revenue in the next four-five years.