India

Clarks to double sourcing from India

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Clarks is also working on a new online platform, as e-commerce forms around 10% of Clarks overall sales in India.
Clarks is also working on a new online platform, as e-commerce forms around 10% of Clarks overall sales in India.

New Delhi: UK-based shoemaker C&J Clark International is looking at India as one of its main sourcing hubs, increasing the number of stores and planning a new online platform for this market. Over the next 3-5 years, the company will double its sourcing from India from about 8 million pairs.

At present, 10% of its global demand is met from India and about 40% of the shoes sold in India are made here. “India is emerging as one of the main sourcing hubs for the company globally. Sourcing from here has increased in the past couple of years and it can only grow faster,” said S. Ramprasad, chief executive officer, Clarks Future Footwear Pvt. Ltd, an equal joint venture between C&J Clark International and Kishore Biyani’s Future Group, which sells Clarks premium shoes in India.

While China and Vietnam are big sourcing destinations for Clarks, it has three contract manufacturers in India. “Labour in India is skilled and there are cost advantages. For us, India is good for making shoes for men,” said Ramprasad.

Clarks is not the only shoes company to look at India as a sourcing hub. Global footwear and accessories companies, especially sports shoe-makers like Adidas, Reebok, Nike and Puma, have been sourcing from India for their global requirements. In December, American footwear brand Skechers also said it would start making shoes in India and could look at selling made-in-India shoes globally. Other international brands like Hugo Boss, Kappa Josel Seibel and Pavers England have third-party footwear manufacturers that cater to their global demands.

According to a study by credit rating agency ICRA Ltd, Indian third-party footwear-makers exported shoes worth Rs.18,000 crore in the year ended March 2015, up from Rs.7,150 crore in FY10. The domestic footwear market in India was estimated at around Rs.32,000 crore in FY15.

Annually, India produces about 2.1 billion pair of shoes, of which just around 10% are exported. China dominates the global footwear market by supplying about 40% of the total demand, while India supplied just about 2% of global demand in FY15, the ICRA study noted.

On the retail front, Clarks is looking at opening about 100 new stores over the next three years. It now operates 62 outlets across the country. “We are looking at tier-I and tier-II towns,” said Ramprasad. While most of the current Clarks outlets in India are owned and managed by the company, most of the future stores will be franchisees. The company intends to continue with its existing store format in India that typically requires about 1,000 sq. ft of selling area.

Clarks aims to close the current fiscal year at around Rs.250 crore, said Ramprasad. In the year ended March 2015, its revenue stood at Rs.114.88 crore, according to its India website.

Clarks is also working on a new online platform, as e-commerce forms around 10% of Clarks overall sales in India. Besides, it will continue to sell through online marketplaces like Flipkart, Myntra and Amazon. The company is also expanding its accessories range that includes bags, shoe care products, wallets and belts.

Sounak Mitra

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