NEW DELHI: As the government pushes a ‘Vocal for Local’ strategy, footwear company Liberty Shoes is looking to align its supply chain with the campaign. The 66-year-old brand, which claims to have been launched with the vision of liberating Indians from the stranglehold of foreign brands, now aims to prioritise local markets for its raw materials requirements.
Besides, the company is looking at tapping markets like Vietnam, Bangladesh and Sri Lanka as it wants to reduce reliance on Chinese imports, which currently stand at around 15-20 per cent, said Anupam Bansal, Executive Director—Retail, Liberty Shoes.
“We are exploring all markets, outside of China, where the duty structure is very low. The only advantage that China has is that of cost. But, now even Vietnam and Bangladesh are matching up. That apart, there is a need to develop a more robust ancillary ecosystem for the footwear industry in India to achieve economies of scale and solve the issues of costs, consistency in supply and availability of raw materials,” Bansal said.
He added that hiking import duty alone is not enough. The industry needs regulatory support in terms of labour policies and land availability to ensure more manufacturing units with larger capacities can be set up.
In a bid to promote domestic manufacturing, the government increased customs duty on footwear from 25 per cent to 35 per cent and on parts utilised to make footwear to 20 per cent from 15 per cent in February.
While the foundation of the campaign is not novel, the historic call for self-reliance began through the Swadeshi Movement of 1905. The country’s vision for self-sufficiency has only gained prominence once again through campaigns like ‘Make in India’ in 2014 and now ‘Vocal for Local’. Despite India being the world's second-largest producer of footwear, many foreign brands having a presence in India are still heavily dependent on imports.
Bansal, however, said that cutting imports to zero would be “unrealistic” in the immediate term as machineries, moulds and equipment for manufacturing footwear components are still not part of the Indian ecosystem.
The nationwide lockdown due to the COVID-19 has dealt a major blow to the footwear industry. While the company is seeing a month-on-month increase in demand, Bansal expects the festive season to revive sales back to the pre-Covid levels. “We are seeing products below ₹1,000 price points doing better led by rural markets. In the urban market, however, intermittent lockdowns are causing disruptions in sales as well as distribution networks. About 70 per cent of the stores are operational,” he added.
Given the recessionary woes at malls, the company plans to shut some of its 200 company-owned stores and relocate its ‘unviable’ outlets, said Bansal, who is also one of the promoters of Liberty Shoes. It is expecting up to 45 per cent decline in its revenues in the ongoing financial year. In FY20, its revenue was ₹650 crore. The company has also curtailed its R&D spend for this year as a result of a coronavirus-fueled slump. In terms of new launches, Bansal said that the company will focus on washable and open-toed footwear in line with a notable change in the buying pattern.