PESTEL Analysis

POLITICAL:
Department of Industrial Policy and Promotion (DIPP ) provides a
comprehensive scheme for modernization and technology up gradation in
all the segments of the Leather Industry. Here, financial assistance will be
provided to the extent of 30% of the cost of plant and machinery for SSI
and 20% of cost of plant & machinery for other units (i.e. non-small scale
units) subject to a ceiling of Rs. 50 lakh for both categories for technology
up-gradation/modernization and/or expansion.
GOI announced cut in excise duties of footwear products in the budget for
financial year 2015-2016.
Government initiatives to attract foreign direct investment.

ECONOMIC:
Rising disposable income and consumers increasing spending.
Competitive Landscape - Bata India Ltd remained the leader in footwear
with a retail value share of 8% in 2015.
Footwear is expected to perform strongly over the forecast period with a
constant value CAGR of 7% growth and sales expected to touch Rs 860
billion by 2019.
The latest trends show a compound annual growth rate of about 15% and
a total market share of Rs 26,300 crores.

 SOCIAL:
Consumer attitudes and opinions changing favorably towards
branded shoes. They prefer buying a relatively expensive shoe
rather than the one which is cheap with less durability.
Due to NGOs and social groups the importance of human life,
working conditions, work ethics, and health of the workers
have increased.
With various schemes promoting Primary and secondary
education, more students are going to be enrolled in schools
DEMOGRAPHIC
STRUCTURE
300000000
and colleges, providing
the footwear
industries. Itll also
258,202,535
increase
per
capitia
income
due
to 243,293,143
increased employment.
250000000
187,016,401

200000000

165,048,695

150000000

118,696,540

100000000
43,625,668
43,175,111

50000000
0

0-14 years

105,342,764
15-24
years
Male Female

25-54 years

55-64 years

37,810,599
34,133,175

65 years and over

 TECHNOLOGICAL:
In-house Design Studios incorporating state-of-the-art CAD systems having
3D Shoe Design packages that are intuitive and easy to use.
Many Indian footwear factories have also acquired the ISO 9000, ISO 14000
as well as the SA 8000 certifications.
Social media systems becoming increasingly popular has resulted in buyers
shifting towards E-Commerce websites for value deals and saving time.
Other policies like 30 day replacement guarantee allows peace of mind.
Many companies are using digital media for their product advertising and
sponsoring at major events organized in India.
Breakthrough product innovations enhancing comfort, agility and durability.

ENVIRONMENTAL:
Reliable supply of resources in the form of raw hides and skins, quality
finished leather, large installed capacities for production of finished leather
& footwear, large human capital with expertise and technology base, skilled
manpower and relatively low cost labor, proven strength to produce
footwear for global brand leaders and acquired technology competence,
particularly for mid and high priced footwear segments.
India offers a huge consumption market.

 LEGAL:
FDI (Foreign Direct Investment): Liberalizing FDI was
another important part of Indias reform, driven by belief that
this would increase total volume of investment in Indian
economy
Export Growth: Adjustment assistance scheme to provide
enhanced exports credit and guarantee corporation (ECGC)
cover at 95% to badly hit sectors.
The lowering of value addition norms under DFRC scheme
from 33% to 25%, would benefit the exporters of leather
goods including leather footwear.
Funding is available to enable tanners to modernize
manufacturing facilities in footwear sector. Machinery also
benefits from duty free/concessional import regulation.
There is concessional rate of interest on export credits to
mitigate the effects of rupee appreciation which has led to
tightening of credit.