07 October 2023, Mumbai
The footwear industry is expected to experience moderate growth of 7-8 percent in FY24, a significant decline from the impressive 28 percent growth observed in FY23. Several factors contribute to this shift:
- Sluggish Volume Growth: The industry faces challenges related to sluggish volume growth. Consumers are not purchasing footwear at the same rate as before, impacting overall sales.
- Stagnant Average Selling Price: Despite the growth in demand, there has been no substantial increase in the average selling price of footwear. This lack of price escalation affects revenue growth.
- Challenges in the Mass Segment: The mass segment of the industry is particularly affected, with demand unlikely to improve significantly in the near future.
However, there is hope for a sales recovery during the festive and wedding seasons in H2 FY24. Industry players must closely monitor market trends and adapt their strategies to navigate these challenging times effectively.
Strategies for Success:
- Focus on Premium Segments: Companies can concentrate on the premium segment, which is expected to continue performing well. High-quality, luxury footwear appeals to discerning consumers.
- Innovate and Differentiate: To stand out from competitors, companies should innovate in terms of product design, materials, and manufacturing processes. Unique features and aesthetics can attract buyers.
- Expand Distribution Channels: Companies can broaden their distribution channels to reach a wider customer base. This may involve investing in e-commerce platforms, expanding into new markets, and collaborating with retailers.
- Cost Control: Streamlining operations, negotiating better deals with suppliers, and improving efficiency can help control costs and enhance profitability.
The footwear sector’s performance will depend on various factors, including consumer preferences, economic conditions, and supply chain dynamics.
By implementing these strategies, industry players can position themselves for success despite the current challenges.
5 key insights :
- Growth to moderate: 7-8%
- Premium segments key
- Innovate to differentiate
- Expand distribution channels
- Control costs
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