News APP

NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  gplay

This article was first published 9 years ago  » Business » Bata's amazing journey on Indian roads

Bata's amazing journey on Indian roads

By Namrata Acharya
November 27, 2014 11:30 IST
Get Rediff News in your Inbox:

The shoemaker has proved to be resilient, despite being bogged down by labour issues, dated product designs and rude retail staff over the years.

Image: Bata Shoes had a tough time and it devised its own strategies to survive. Photograph: Courtesy, Bata 

By the 1950s, Bata, the Switzerland-headquartered shoemaker, was positioned as the world’s leading footwear exporter.

In 1973, Bata India had made its first public issue of capital. However, in India, many still held the impression of Bata being a mammoth public sector unit, with the socialist imprints of the Nehruvian era. After all, for the union-driven organisation, there was no other shoe company as big as itself.

As a result, Bata rarely required large scale campaigns to make its presence felt.  Sturdiness and affordability were its selling points.

Its low-cost, rubber slipper brand, Hawai, launched in 1950, became a generic name. Other brands like Naughty Boy, Ballerina school shoes and Ambassador were household names.

“During the 70s and 80s, the branding emphasised durability and comfort,” says Rajeev Gopalakrishnan, group MD, Bata Emerging Markets. Another former Bata executive recalls that branding “was mostly limited to word-of-mouth and merchandising through point of sale”.

Image: Bata Shoes survuved by experimenting new designs to beat competition. Photograph: Reuters

The complacency started to cost Bata when competition made entered. In the mid-80s, when partial liberalisation lifted restrictions on the footwear industry, small, local competition chipped away at Bata with their lower prices.

Bata added capacity and  sub-brands. It launched North Star, a youth brand, Marie Claire (women’s footwear) and Power (sports shoes).

In 1988, Bata set up its fifth factory in Bangalore. However, its image as a giant dragging its feet was taking root.

Its showrooms and factories was at the mercy of labour unions.

Rude and unhelpful retail staff did little to help the brand.

The liberalisation in the nineties and across-the-board delicensing brought Bata India squarely up against global competition.

 Image: Hush Puppies brand helped Bata revive fortunes. Photograph: Courtesy, Bata

It so happened that Bata also had a landmark year in 1989. With the fall of communism in the Czech Republic, Thomas Bata, the founder’s son, returned to Zlin, the company’s birthplace in the Czech Republic, after being forced to rebuild itself outside of Eastern Europe, by its communist governments.

Still struggling with labour problems that stifled efforts to modernise and streamline costs by outsourcing, Bata took a big leap in the 90s. It revived its flagging sub-brands, launched its first premium brand, Hush Puppies, and floated a corporate campaign.  

The company, with its sturdy, value-for-money shoes had come to be known for its dated designs.

It was time to offer something more aspirational by way of premium and well-designed shoes.
Swapan Seth, national creative director, chairman and chief executive officer of Equus Red Cell, who was heading the creative charge at Trikaya Grey in 1993-95 on Bata’s account, recalls that the then-managing director, P K Dutt, revived a number of sub-brands to contemporise the fuddy-duddy image of Bata and was avidly involved in the campaign too.

Seth’s team helped launch Hush Puppies.

Image: Bata Showroom in Lindsday Street, Kolkata. Photograph: Courtesy, Jeroje/Wikimedia Commons

The corporate campaign, which was first done in Bengali, said, "Haata manei Bata" (Walking means Bata) to underlined its iconic status. Rohit Chawla, a leading contemporary photographer, who was called in to work on it recalls how he travelled with a pair of Bata chappals (flip-flops) and placed it wherever he thought the scene was "grungy" or "poetic" enough; the award-winning campaign comprised poignant black and white shots of someone boarding a bus, alighting from a hand-pulled rickshaw or resting in the Maidan, in which the sandals were a fixture. 

However, profits continued to slide, and Bata India went into the red. In the third quarter of 2001,  Bata India reported a net loss of Rs 4.45 crore, against a net profit of Rs 0.38 crore the previous fiscal.

But from 2004 onwards, a new management, with the former CEO of Pepsi Cola International South Asia, P M Sinha, as the chairman and the CEO of Bata Chile, Marcelo Villagran, as the MD, came down hard on the labour irregularities.

After posting losses till 2004, Bata made a net profit of Rs 12.49 crore or Rs 124 million) in the year ended December 31, 2005. Bata finally outsourced production in line with its  specifications.

This time, Bata’s stores were a key branding cue with improved product mix, remodelled interiors in line with a global format.

Bata shut loss-making stores and stocked high margin products. “Word of mouth and merchandising continued to be key to our branding,” says P M Sinha, who stepped down as chairman in 2011.

Cut to 2014 and its campaign, conceptualised by DDB Mudra, focuses on “fashion, comfort, symbolising shoes that are lifestyle-led, young and vibrant,” says Gopalakrishnan.

From selling online, new store formats (such as its largest store in Thane, Footin stores that stock affordable shoes, premium Hush Puppies Stores) to flaunting handbags, sunglasses, clutches and scarves as its other products, it would be hard to recognise Bata in 2013-14 against its troubled past, the classic brands from the 80s, North Star and Power, continue to be strong contributors.

“We plan to reposition Power and North Star to bring them back as compelling choices for today’s youth in the sports category,” says Gopalakrishnan.

(With inputs from Sayantani Kar)

Get Rediff News in your Inbox:
Namrata Acharya
Source: source

Moneywiz Live!