INDIA: Bata's Chinese Shoe Imports Worry Rivals
Bata India Ltd, the oldest branded shoe company in India, is importing 170,000 pairs of shoes from China to India prompting rivals to press the Government to raise import duties.
Branded shoes account for only 20 per cent of the Indian footwear market. While India may be a powerhouse in cheaper footwear, Bata's own factories, among the largest in India, are not low-cost centres.
Over decades, the unions at Bata's leather footwear factory in Eastern State West Bengal, have frustrated the company's plans to modernise and mechanise processes. Its Bangalore factory in South India, where union relations are better, makes PVC and canvas footwear.
Bata denies that it will close its factories now that it has set up the import deal with China.
The move to import from China also dovetails very well with the market realities: Bata is a low price brand. Prices, even for pure leather shoes begin around Rs. 500 ($10.75) versus the likes of Nike, Reebok and others, which are much higher. So now Bata will sell the latest fashion shoes at the lowest prices.
Bata was originally a Czech multinational before World War II, currently headquartered in Canada. In India it has a huge network of shops as well as 'Bata' nameplate shops belonging to franchisees that only sell the Bata brand.
Bata's competitors have asked government to raise import duties, which currently stand at 70 per cent.
Bata's trial import of 170,000 pairs compares with the 90,000 pairs Nike sells in India in a whole year. With Bata's volumes, it can get two to four design changes every three or four months.
|In the old days of Licens-Permit-Raj, no consumer goods could be imported into India. Anything imported illegally was confiscated, and later auctioned. However, some intrepid importers found ways around the ruling. For example, one importer ordered his entire load of shoes to be split into two lots: all the left footed shoes were imported to his company in Calcutta. All the right went to another of his companies in Bombay. He was the only bidder at both auctions.|
By Navroz Havewala
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