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Footwear is a necessity to every person and at the same time is now a lifestyle as also a
performance enhancement product; and is thus a segment with vast potential.

The Indian footwear market is estimated to be worth Rs.13,750 Crore and constitutes just about
one percent of Indian retail. About 37.8 percent of Footwear retail is in the organized segment,
which qualifies it as the second most organized retail category in India, next only to Watches.

Men's footwear comprises the largest share of the organized market accounting for about 52
percent in value terms.

As footwear retailing in India has remained focused on men¶s shoes, there exists a whale of
opportunity in the exclusive ladies and kid¶s footwear segment. This is especially surprising as
women globally in line with global trends are the key decision makers for buying footwear. The
ladies footwear segment still remains the most untapped as nearly 80-90 percent purchases
happen in the unorganized market largely due to the dressing habits of women for whom
consideration of durability or comfort are less important than colours and designs that go with
dress.

With the Indian woman becoming more brand-conscious as opposed to the past state of being
product-conscious, more and more internationally renowned players are expected to enter the
Indian market to fill this need-gap.

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The children's and kids' segment also accounts for a significant share due to the increased
emphasis on sporty looks. Given India¶s very young population, the market for children¶s
footwear is also attractive for new organized players to enter and earn supernormal profits.

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The footwear market today is showing a trend where more and more competitors within the
segment are coming together and forming alliances through cross-promotions and tie-ups
benefits for enhanced reach and offering the consumer access to a wider range of products and
brands.

The London-based Carlton group became the first overseas player to enter the Indian women¶s
footwear market when it set up its first store at the MGF Metropolitan Mall in Gurgaon recently.

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The entry of specialty sportswear retailers such as Royal Sporting House, Sports Station and
Planet Sports providing the best shopping experience for customers and a platform to showcase
the world¶s top sports and active lifestyle brands has transformed the organized retailing scenario
in the country. Royal Sporting House has over 40 stores in India, many of which are placed in
prime locations within shopping malls. It is the exclusive distributor of brands such as Mizuno,
Caterpillar, TYR, Dunlop Sports and non-exclusive ones such as Reebok, Adidas, Nike and
Skechers. Planet Sports, with 20 outlets in the country, is the licensee in India for leading sports
brands such as Puma, Speedo, Converse and Wilson, among others.

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The sportswear market is the only sector in India that has the presence of all three top
international brands. The year 1996 witnessed the entry of Nike, Reebok and Adidas that gave a
new dimension to footwear and fashion retailing in the country. Playful promotion campaigns,
world class merchandising and the internationally styled stores enthused consumers to go for an
extra pair of shoes and a couple of extra Tee Shirts and add a little bit of sporty images to their
lifestyle.

In the face of increasing competition from leading multinational players, domestic footwear
retailers have also woken up to the opportunity that the segment beckons and are realizing that
exposure to shopping standards abroad have made Indian consumers demand the same formats
and experience here. Responding to this challenge, major domestic players like Bata and Liberty
have significantly transformed their retail formats to become more lifestyle- oriented and are
positioning themselves as vibrant and contemporary Indian brands.

In recent years the market has seen entry of a host of new domestic and foreign brands like
Drish, Lotto, Lotus Bawa, Now, Oakridge, Royal Elastic, Sketchers, Teenage, Teva, Timberland
and ÿans. Fashionable brands like Stryde and Red Tape and MNC brands like Allen Cooper,
Franco Leone, Gaitonde, Gucci, Guess, Lee Cooper, are further developing the market by
creating new segments.

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- The Indian footwear retail market is expected to grow at a CAGR of over 20% for the period
spanning from 2008 to 2011.

- Footwear is expected to comprise about 60% of the total leather exports by 2011 from over
38% in 2006-07.

- Presently, the Indian footwear market is dominated by Men's footwear market that accounts for
nearly 58% of the total Indian footwear retail market.

- By products, the Indian footwear market is dominated by casual footwear market that makes up
for nearly two-third of the total footwear retail market.

- As footwear retailing in India remain focused on men's shoes, there exists a plethora of
opportunities in the exclusive ladies' and kids' footwear segment with no organized retailing
chain having a national presence in either of these categories.

- The Indian footwear market scores over other footwear markets as it gives benefits like low
cost of production, abundant raw material, and has huge consumption market.

- The footwear component industry also has enormous opportunity for growth to cater to
increasing production of footwear of various types, both for export and domestic market.

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c Category killers
Ëc The loft
c Factory Outlets
Ëc Max retail
Ëc Landmark
Ëc The loot
c Discount chains
Ëc The shoe factory

 c Ú A large retail chain store that is dominant in its product category. This type of
store generally offers an extensive selection of merchandise at prices so low that smaller stores
cannot compete. It is also known as Big Box Store.

 c  c An outlet store or factory outlet or "Best Saving Outlet" is a retail store in
which manufacturers sell their stock directly to the public through their own branded stores. The
stores can be brick and mortar or online. Traditionally, a factory outlet was a store attached to
a factory or warehouse. Often these stores are grouped together in outlet malls. The invention of
the retail outlet store is often credited to Harold Alfond, founder of the Dexter Shoe Company.

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c Casuals
c Formals
Ëc Economy range
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Ëc Reebok
Ëc Nike
Ëc Adidas
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% 9 %c Adidas ltd is a German sports apparel manufacturer and part of the Adidas group,
which consist of Reebok Sportswear Company, Taylor Made-Adidas Golf Company, and
Rockport. Adidas is the largest sportswear manufacturer in Europe and the second largest
sportswear manufacturer in the world. Company¶s revenue for 2006 was listed at about US $
13.625 billion and the 2007 figure was listed about $ 15.6 billion. It has more than 170
subsidiaries guarantee marketplace presence for Adidas products around the world.

r& cLiberty shoes ltd. is a leading leather shoes brand and is engaged in the manufacturing,
supplying and exporting of the footwear¶s. It is the only Indian leather shoe brand that occupies
fifth ranking among the top shoes manufacturing companies in the world.

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&"c Reebok specializes in the design, marketing and distribution of sports and fitness
products including footwear, apparel and accessories, as well as footwear and apparel for
nonathletic use. The company has three main product categoriesÚ Rbk, Performance, and Classic.
Each of these product categories features product offerings for both men and women that are
designed for specific consumer groups. Reebok has operations in the UK, Europe and in various
and in various Asian countries. It is headquartered in canton, Massachusetts. The acquisition of
Reebok by Adidas-Salomon was completed in January 2006.

gc Bata industries are a specialized division of the world¶s largest shoe manufacturerÚ the
Bata shoe Organization (BSO). Bata industries have operations and production facilities in most
of the countries worldwide. Bata India Limited is the largest footwear retailer in India. Bata India
is a manufacturer of footwear. Types of footwear offered by the company include rubber, canvas,
leather and plastic footwear. The company also markets apparel under the brand names of North
Star, Power and Ambassador. Bata India has five manufacturing plants and acquires its leather
from two tanneries in Mokamehghat (Bihar) and Batanagar. It is headquartered in West Bengal,
India.

'cRelaxo entered into footwear industry in 1976. It started off with the manufacturing of
Hawaii slippers and subsequently diversified into manufacturing casuals, joggers, school and
leather shoes. Relaxo has the capacity to manufacture over 100 million pairs, per annum. It has
the customer base of around 100 million.

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Nike 10.5%
Adidas 22.46%
Bata 7.8%
Liberty 11.16%

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In 2010, the Indian footwear market is expected to have a value of $4,380.3 million, an increase
of 62.1% since 2005. The compounded annual growth rate of the market in the period is to be
10.1%.

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2005 2701.5 119.2 9.10%
2006 2960.4 130.6 9.60%
2007 3256 143.6 10%
2008 3589.7 158.4 10.2%
2009 3963.8 174.9 10.4%
2010 4380.3 193.2 10.5%
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In 2010, the market is expected to have a volume of 3.2 billion pairs, an increase of 59.2% since
2005. The compound annual growth rate of the market volume in same period is predicted to be
9.7%.

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2005 2.0 8.80%
2006 2.2 9.40%
2007 2.4 9.70%
2008 2.6 9.80%

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2010 3.2 9.90%
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©c Prohibit employment of Children in Footwear Industry
©c Provide hygienic environment for workers in the industry
©c Indian Footwear companies should opt for modern technologies
©c Companies like Bata, Relaxo, and Liberty should focus on Upper class customers also.

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