People delay shoe shopping due to pandemic, unemployment: Walkaroo MD

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According to MD VKC Noushad of budget brand Walkaroo International.

The nearly decade-old brand, which had a turnover of Rs 1,560 crore in FY21, manufactures and sells 1,000 models of shoes in more than 10 categories ranging from Hawaii/EVA slippers/ polyurethane to sports shoes to formal shoes. But much of their income comes from affordable mass-market slippers and sandals priced at Rs 250-350 a pair.

“Raw material prices went up almost 50% and we were in a really bad spot… We and other manufacturers were able to raise prices to some extent. But we couldn’t pass on the full amount to the customers because the revenue from the customers did not increase…At present the GST has also increased and it is a financial liability for all manufacturers and distributors. It’s also a pain point for customers,” Noushad told Business Today.

In January, the Center increased the GST on shoes priced below Rs 1,000 a pair from 5% to 12%. But the government did not increase the rate on clothing in the same price range. Previously, clothing and shoes were grouped together in the same TPS slab.

But the company has expanded its focus beyond fashionable, affordable utility shoes, targeting young people. Noushad said that young people even in the deep interiors of India are aware of fashion and design trends due to the democratization of information. One of the most requested categories is sports shoes, he added. “This year we couldn’t meet the demand because our capacity was low and we are increasing it.”

Walkaroo manufactures four lakh pairs of shoes a day at its 20 factories across six states. It directly employs 6,000 people and has 4,500 exclusive suppliers. The brand, which has a major presence in South India with outlets in smaller towns and villages as well as cities, expects to generate revenue of Rs 1,800 crore in the financial year 22.

The closures have been tough on shoe industry sales as the health crisis forces people to stay home. “We lost Rs 200 crore in the April-May shutdowns due to the second wave of coronavirus infections.” But the pandemic has also curbed shoe imports into the country, giving a boost to domestic production.

“The quality of Indian shoes has improved a lot. We can easily enter the export market in 2-3 years. In addition, many Taiwanese companies wish to come to India to set up 100% exporting units there. This will increase India’s export share and improve the ecosystem and quality of footwear made in India,” Noushad said.

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