With a production of more than 60,000 pairs a day,
covering virtually every age group and income category, Liberty Shoes is the
only Indian company amongst the top 5 manufacturers of leather footwear in the
world. The company’s products are marketed across the globe through 150
distributors, 400 exclusive showrooms and over 6000 multi-brand outlets, and
sold in thousands every day in more than 25 countries including fashion-driven,
quality-obsessed nations like France, Italy, and Germany.
The company is a 50 year old enterprise with an annual
turnover exceeding Rs 600 crores ($ 150 million). The factory is located in north
India in Haryana and the shoe manufacturing is also done abroad. Adgully spoke
about the brand’s current position, growth and business plans with Anupam
Bansal, Executive Director of the Liberty Group.
An Economics graduate from Delhi's Shriram College of
Commerce with a background in footwear designing from Ars Sutoria of Italy,
Bansal has been associated with the company since 1994. He has occupied various
positions in the marketing division prior to his present role in the company.
Following are the excerpts of the conversation with Anupam
Bansal.
Adgully: Can you throw some light on the company’s growth
till date?
Anupam Bansal: Liberty started way back as a
footwear upper manufacturer for export market; we were not catering to the
domestic market at all. We were primarily focused on USSR market. We began
focusing on the Indian market from 1982 onwards. At that time Liberty had the
most technologically advanced manufacturing facilities in India. In fact, we
were the ones who were instrumental in bringing mechanized manufacturing into
India. This took Liberty to market leadership during the whole of 80’s and
90’s. Every two years we applied new technologies to our products. Our products
were our hero, Liberty as a brand was known for absolute fashion, comfort and
durability and till date it’s know for the same. The expectations about our
products are phenomenally high and we want the consumers to experience the
brand.
AG: How Liberty has been affected by the changing trends
over the years?
AB: From the year 2000, the new
generation of consumers in the market has opened up and the expectations with
the footwear market have increased drastically. Where we were known for
durability and comfort, with the opening of new market Liberty moved with time
and created different products to cater the increased demand in the
scenario. Also people were willing to try new products. We tried to reach out
to the consumers through our different product categories.
AG: How you see footwear industry developing today?
AB: The way we see the sector developing
is in terms of market, popularity of the category at large and also looking at
the consumption & potential for average selling price increase. Footwear is
really an under-priced product in the Indian context; women buy footwear
between Rs.500-600 ranges whereas today a single t-shirt cost more than it.
Comparatively in the worldwide scenario a footwear brand is always expensive.
AG: Please share with us the kind of challenges Liberty as
a part of footwear industry is facing?
AB: There are the same challenges that we
used to face 20 years back as 85 per cent of the market is still unorganized.
Comparing to Adidas, Reebok or Bata I feel their market share in whole would be
less than 15 per cent. The organized retail is only 5 per cent and that is how
companies handle their own retail market. Most of people in multi-brand market
would like to sell their own label and they end up making money.
Taxation part is still a challenge for us as branded
footwear companies are taxed 20-30 per cent more than local brands. Unorganized
market gets better money from the consumer as compared to the organized market.
But brands like us which have a national presence need to keep price constant
and you need to give quality assurance too to your consumers which local guys
never do.
AG: How according to you situation will be worked out?
AB: Local brands don’t have any MRP. They
are not price governed and they change the price depending upon demand and
supply. But today consumers are getting educated about the brand and what they
want to buy, so there’s consumer pull that we are observing in the market.
Consumer pull and retail pull make market work from government side as well as
consumer’s side. 70 per cent people walk in local footwear shop than going and
opting for branded footwear.
AG: What made you to change persona of the product and
associate more with fashion and lifestyle?
AB: For me we are a consumer driven
company so we have not changed but yes our consumers in India have changed.
Their choices and buying patterns have changed. Any brand today needs to offer
comfort &fashion to satisfy their consumers.
AG: How is competition from international brands coming
into India affecting the Indian brands?
AB: It’s good because that is the time
when people realise the brand value, like we have. About 10 years back we had
to explain why we are expensive and our pitch used to convince them by what we
were offering - a technologically driven fashionable product. Today brands have
opened up the market and have taken price to a different level. Perception of
quality has also been changed. All the brands coming in are developing the
industry in certain way. Today the challenge is to shift consumers from
unbranded to branded segment. India is a large market with diversified people
and segments.
AG: What does the brand Liberty stand for and how strong
is your market presence?
AB: Liberty as a brand is an affordable
brand, a brand which provides balance between fashion and comfort. The Brand
Liberty has received great response and out of 400 stores in 120 cities and
towns, 325 are the franchise stores. Liberty is a fashionable and a known brand
today.
AG: How has been the growth last year and what are your
further plans for expansion?
AB: Last year was tough but as a brand
even during recession we’ve not seen death. With every new store there is a
growth opportunity but not beyond 5-7 per cent as expected. Location is the key
to success, a success mantra for any retail business. We are planning to add
100 stores every year. We see a potential for 1000 Liberty stores in order to
feel settled, but the capital required for this is high. We need to have a long
term sustainable model for that.
AG: As you said you want to cater to the aspirations of an
entire Indian household. But today youth is the focus area for almost all the
brands so what are your plans in that direction?
AB: Youth is a very important segment we
can’t leave that for sure; we are catering to them with a few of our brands.
Also we are cautious about the fact that youth is very vulnerable about change.
They are the most unloyal consumers for a brand. They need change and get
attracted towards innovation. So we do not want to put all our expertise in
that segment rather we want to cater to all the age groups looking at the fact
that everybody today wants to be fashionable whether a 40 year old person or a
18 year old one.
AG: Share with us your marketing strategy?
AB: Marketing and promotional strategies
and the selection of the medium is according to what best suits the brand. Can
be television or print depending on the strategic requirement as per the
product. There was a time when the focus was completely on television then it
shifted to print and now we tend to move towards digital too. Our thought has
always been to spend lower on advertising but simultaneously create an engaging
and innovative product hence spending and creating more of store experience. In
a year, including everything, we tend to spend 3 to 5 per cent of sales on
advertising.
AG: Can you please share some insights on your association
front?
AB: We’ve been associated with Femina
Miss India and Lakme Fashion Week for six years.
AG: How you want to describe the current state of
e-commerce market?
AB: On the growing e-commerce market I feel, yes the
industry is growing rapidly and it is a great space to be in but what I feel is
that it is taking away the impact of touch & feel. I want my consumers to
feel the product. I would not want to fall in that medium completely since
people are buying online and it’s becoming a fashion to shop from there as
customers get huge discounts too.
