Skechers eyes tier II and tier III cities in next leg of expansion

Skechers, the US-based footwear and apparels company, is looking to beef up its presence in the tier II and tier III cities of India as part of the next leg of its expansion. The company that entered the Indian market in 2012 through a joint venture with Future Group will open 400 more exclusive outlets in India.

Rahul Vira

“Skechers already has 100+ stores in India and is an established brand in the metros and other big cities. Of the expected additional 400 stores, a majority will be in the tier II and tier III markets,” said Rahul Vira, CEO, Skechers South Asia Pvt. Ltd.

“A few years back, people from tier II and tier III cities used to go to nearby big cities to do their shopping. With technology and infrastructure being developed across these markets it has become easier for brands also to open stores. So, these markets have been there and they are very promising. From any brand perspective, it makes more sense to go where the customers are,” said Vira.

The footwear company intends to establish these 400 new outlets in the next five years. This year alone will see the addition of 25-35 more stores.

The company that is looking to do sales of over Rs 500 crore by the end of this year (the company considers the calendar year as the financial year) considers North and West as its strong markets.

“For us, the good markets are West and North just because of the way we started. We entered the metros and the big cities first. But you will see a lot of expansion happening in the southern part of the country, central India and the east,” said Vira.

Skechers has also started to market its apparels line on a trial basis. Both the apparels and the accessories line is expected to be launched sometime next year. Globally, the apparels and accessories business accounts for about 5 per cent of the company’s overall revenues. In India, the company is looking to first build the infrastructure, both internally and externally, before the big launch.

“Globally, our apparels business is not very old. In India, we first wanted to establish ourselves in the footwear category. We have been getting tremendous response on our footwear and therefore we have been able to create a large consumer base for that. Now the consumer is anyway coming to the store for the footwear. And when a consumer already has confidence in your existing product line, it is very easy for them to try or move on to other product categories as well,” said Vira.

Vira is quick to admit that they are not the largest player in a market that is valued at around Rs 6,000 crore but he maintains that the brand shows promise. In fact, Skechers has already surpassed Adidas to become the second largest athletic footwear company on its home turf, the US market, with a 5 per cent market share.

According to Vira, Skechers caters to a wide range of audience. Everyone from a three-year-old to a 50-year-old falls under their target group. They are also looking to tap online customers by adopting an omni-channel approach. Skechers.in is expected to go online in a couple of months. With a 5-6 per cent marketing budget, Vira said they have no one approach for marketing because of the diversity in their customer segments.

“We cater to a much wider and larger target audience. We cater to kids, so you can say that our target audience technically starts from three years in the kids’ category and goes up to 45-50. We have a broad spectrum of products lines that are available for this age group and therefore we have created different product categories to each of these segments. So, your product line changes for all these segments of consumers and for each of these we have different communication. We work with a different methodology to address each of these consumers segments,” added Vira.

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