We are looking to grow our casual range beyond travel and beachwear: Deepak Chhabra
In an exclusive conversation with Deepak Chhabra, CEO of Crocs India shed light on growth strategies of the brand.BY Shipra Srivastava | March 30, 2017 | comments ( 0 ) |
Kindly shed light on current footwear market in India. What would be the estimated market share of Crocs in overall market?
The organized footwear market as of now is of about 25,000 crores and it is growing about 18% y-o-y. The biggest contribution comes from the category called ‘Hawaii’ (thongs) largely used by the lowest strata of the society. Then, the premium segment contributes 10% of the organized market. Premium category is growing much faster from market per se.
The growth rate in the premium segment is almost doubled the growth of the organized sector, so it’s about 30%-35%. ‘Sports’ is the leading segment in the premium category. The sports category is entirely different from the casual category space where we play, hence, I cannot comment on relevant market share of Crocs. If we can the market divide into non sports casual segment then we would be somewhere about 15% in terms of market share.
Kindly highlight the current distribution? Also shed light on strategies to scale up the distribution?
Our distribution is fourfold. One is our exclusive store then we have e-commerce which includes our webstore and market place model. We are retailing via all leading market places including Amazon, Flipkart, etc. to name a few. We also have regional distribution partners who supplies to multi brand retail stores. Fourth one is the key account that means departmental stores like Shoppers Stop, Max, etc.
Today, we have about 41 exclusive stores which are operating on franchised model. We have not open even a single store by our self yet, mainly because of two reasons, first being the 100% FDI we are not allow to run retail until we do 30% local production. Secondly, we feel that our expertise does not allow to go in core retailing, instead we want to focus on product development and brand building. All stores contribute 22% of our business. 25% business comes from e-commerce channel which includes our webstore(shopcrocs.in). About 33% of our business comes from key accounts.
How you managing your marketing spend to sell products on e-commerce market places like Flipkart, Amazon?
Marketing spend to sell online is negligible at this point of time for various reasons. The very first reason is huge footfall that these websites are driving due to heavy advertising. Also they are offering deep discounts by burning cash of their own. By virtue of these facts, the cost of sell (whether the investment in sale or driving traffic) is ridiculously low. For a brand like us we just have to spend on building a catalogue. Online is an easy way to sell as they are driving footfall and conversion by discounting which is one of the major factors of e-commerce success. So from brand per se there is not much investment on advertising to sell online.
How long it take to get a single SKU live on e-commerce webssite?
We do e-commerce worldwide so the pictures, description, etc. which are required to go online is already ready with us, we took it from our global operations. So, we just have to plug-in their system which does not take much time.
Kindly highlight the brand’s product folio. It is alike to international market?
India is the key market for the brand, so every new launch in India happens with international market. However, what is relevant for other market may not be available for Indian market; hence, the product offering could be bit different for Indian market. Few markets are cold markets where it snows for five months to six months of the year so such products will not be relevant for Indian market.
In terms of breadth of the assortment, we have 500 different options available for our Indian consumers. Although, the wider assortment is available online as we have space constraint in the physical store. So, online would have 500 different options at any given time. Our exclusive store carries around 300 unique options. When I say option, it means design which further becomes style and each style is available in at least two options. So when I say we have 500 options, it means around 300 designs in at least two colors, so it becomes about 500 unique options.
Kindly shed light on store profile and category count?
The average size of our store is 600 sq.ft carpet area. Largely, we categorize by the gender so we have men, women, kids and unisex( which can be worn by men and women) range, By product type, the number would be around 10 divided in three main categories including clog, flips, slides. During last year, we have extended our product category by introducing boots, wedges(women), flats (women), sneakers(men). The core category contributes around 80% of sale. We are looking grow our casual range beyond travel and beachwear. We are looking to increase wearing occasions by expanding our casual category. The idea is to acquire more consumers.
Any plans to foray sports category? Crocs has strong positioning in kids segment, what are the plans to capture youth segment?
Absolutely not! We cater more to athleisure kind of segment. No doubt, sportswear is the biggest market in India but 90% of the people who buys sport do not buy for any game, it is more for fashion. Athleisure segment addresses such factors. Any fashion forward person will not wear a sport shoe at a party. Athleisure gives an option to wear for casual or fashion rather than wearing sport. We are looking to make a mark in athleisure segment by launching relevant products As of now, a person looking for athleisure end-up buying sports as there are not many options available in this segment. There is a huge vacuum in this category that we are trying to fill-up.
Presently, largely our consumers are kids between one to 12 years of age group, then moves from 30 onwards as we known for comfort. We are not strong among teens that are why we are collaborating with fashion to drive that age group. Our existing core categories does not interest to this age group that is why we are looking to expand our casual range to become more relevant for that age group.
Shed light on starting and exiting price point? Also mention your average bill size?
We cater to premium niche segment. Averagely, we are priced between Rs.2000 to Rs.7000, and our average selling point for us is Rs. 2,999.
Kindly highlight the expansion plans?
We intend to add 55 new stores by the end of this year. Last year we added 35 stores. So, we would be touching about 90 stores by the end of this year. We are focusing a lot on South market especially the costal palette along with North Eastern market as both these markets are very relevant for brand like us.
Kindly highlight the omni-channel strategy?
As of now we are integrating our exclusive stores to our e-commerce site to start with. In second stage we’ll integrating our key accounts. We are using Magento platform to strategize omni channel operation. .
24 Nov 2015, Hotel Pullman, Aerocity, New Delhi.
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