Home > Business > Special
Cheap foreign footwear anyone?
Sangeeta Singh |
April 04, 2005
Have you heard of shoe brands like Azaleia and Dijean? If you haven't, go to your neighbourhood Bata store and you'll probably find them there. They are Brazilian brands of ladies' sandals marketed and sold through Bata.
This is a small example of affordable foreign footwear becoming an integral part of one's shoe rack. If you visit shoe stores in Mumbai's Bandra area or Delhi's Greater Kailash, you will find a vast range of ladies' footwear, starting at Rs 350. But the brands change so often, it is difficult to remember their names.
And if were to take your chidren to Pied Piper at Centre Stage Mall in Noida, chances are they will not return without two or three pairs of shoes or sandals.
For the shop has a range of brands, including Ultramen, Zoowa, Robataal to more popular kid's choices like Barbie and Spiderman.
The shop manager claims that these shoes are from all over South Asia. These brands typically start at Rs 450 and go on till Rs 650, with variations on colours and designs.
Chinese brands have invaded the Indian footwear industry offering a wide choice of prices and designs. But while this scenario looks sunny, it's better to be wary -- not all foreign footwear is of good quality.
While some like Ultramen and Zoowa are safe and known for their quality, others such as Spiderman and Barbie are more questionable and sold more because they are in fashion.
"Some girls like to have the Barbie logo on everything, and Barbie shoes are an extension of that," says Manju Singh, who imports footwear for kids.
Adesh Gupta, CEO, Liberty Shoes is not impressed by this influx: "These products are mostly Chinese which come via Vietnam, Thailand and Nepal. If they come directly from China, they have to pay anti-dumping duties of 47-67 per cent."
Leading Indian shoe manufacturers warn that these products are known to be mass produced, and supply may not be durable.
S K Verma, deputy secretary, IFCOMA (Indian Footwear Components Manufacturers Association) says that Chinese mass producers are exporting pairs of shoes for prices as low as $2.
"But as long as customers are happy with the price, retailers like us make a decent margin. So what's the problem?" counters a retailer.
But some customers are not happy. "Because of cheap products from Thailand, Indonesia and China, retailers have stopped keeping quality international brands like Ashley," says Shoma Basu, an executive with a multinational bank.
Subinder Singh Prem, managing director, Reebok India agrees and says that Chinese sports shoes, costing $2 - 3, have flooded the Indian market.
"These players can sell their products cheap because they pay no anti-dumping charges, whereas companies like Reebok India have to pay high anti-dumping duties. Though we have no threat from these unbranded products, because serious customers will buy a Nike, a Reebok or an Adidas anyway, but even if we wanted to, we cannot reduce prices because of high anti-dumping duties."
Prem also says that Reebok products are based on thorough R&D and there are different shoes for different functions. "While the really good Chinese shoes are also well designed and of high quality, what is coming to India in the name of sports shoes are flimsy things," says Prem.
And dedidated customers are not changing brands. They will still buy a Marie Claire, a Woodland or a Dr Scholl's. They also feel that prices of good shoes made in India have come down to realistic levels.
"When Bata introduced Dr Scholl's, they were above Rs 2,000 a pair, but now they are down to Rs 999 a pair. In fact, a few days back they were available for Rs 699 on sale," says Reena Tandon, an avowed Dr Scholl's wearer.
Upasana Sarin, director, Finesse India, explains why China made shoes may not be advisable for Indian customers. "Chinese shoes are designed to suit petite ladies with dainty feet and small seats. But most Indian ladies are bigger in size with heavy hips. These shoes may do more harm than good in the long run," she says.
They also tend to wear out quickly. "But the Chinese products have managed to confuse Indian customers," adds Sarin. She says these shoes don't go well with Indian dresses.
"What these products have done is segmented and demarcated customers based on their buying powers," she says. But college-going Koel Chatterjee is not bothered about wearability.
"As long as prices are affordable and I have different shoes to go with my wardrobe, I am happy," she says. Agrees Disha Gupta, a teenager: "I bought a jazzy pair of boots for only Rs 1,700 to go with my short dress."
Gupta cautions too that poor quality shoes may create eczema because the Indian climate is hot and humid and these products use cheap synthetics.
Chinese players enjoy 32-50 per cent cost advantage over Indian manufacturers even after they have paid customs duties, and the result is that retailers can mark up their products to up to 40 per cent of the rate they buy from the importing trader.
"The result is that a lot of Indian manufacturers are turning into traders, especially in children's, ladies' and sports shoes. It is proving cheaper to import than produce at home because the peak duty on Indian manufacture is as high as 20 per cent," says Mani Shanker Almal, president IFCOMA.
Almal says duty free imports of 3 per cent of FOB (free on board) is allowed to exporters without a countervailing duty. This has resulted in massive imports and trading in the Indian market.
Clearly, while the organised footwear companies are involved in a discussion with the government on the unequal playing field, the customers are having a field day buying, wearing and dumping cheap phoren shoes and sandals.