Bata expects 1/3rd revenue to come from smaller markets in couple of years

New Delhi: Leading shoemaker Bata India, which has reported a better performance in tier III to tier V markets, expects about 30 per cent of its revenue from these areas in the next couple of years, the company's MD & CEO Gunjan Shah said.

"A lot of expansion" of Bata India's franchise stores is happening in these smaller towns as the company "senses very clearly" their growth potential, Shah told PTI in a virtual interaction after the company's AGM.

Value-for-money products by the leading shoemaker, providing value to consumers, he said.

"Tier III to Tier V right now would be contributing to less than 20 per cent of our store's business, and our expectation is that it should cross about 30 per cent in the next couple of years," said Shah adding, "So we expect them to grow much faster." The company is "very optimistic" about the growth performance of its smaller towns, Shah added.

Bata Chairman Ashwani Windlass said in smaller "tier II, III, IV & V cities, the focus is solidly on value proposition, more than the bigger cities".

Bata India's revenue from operations was Rs 3,488 crore for the financial year ended on March 31, 2025.

Companies operating on the consumer side are having higher rural growth, with a steady demand in the last 5-6 quarters.

This is led by a combination of increased MSP (Minimum Support Price), better monsoon, and overall government initiatives. However, urban demand is also improving gradually, helped by factors such as softening of inflation, especially food inflation.

In the urban market, companies facing sluggish demand are trying to invest in growth by promoting attractive price points and discounts.

"So now this is obviously a calibrated stance that demand will come back and but I think the better proposition is to stay with the value proposition and that's what our focus is on," he said.

About the performance of smaller markets, Shah said, "Yeah! No doubt, rural is definitely doing better, and that's showing up in our tier-III to tier III towns' performance. Stores are doing better there." However, in general, the lower end of the market is still facing pressure, he added.

The company is tackling the situation "by basically making sure that we are providing a much enhanced range, even at times repricing our products, but providing great value to consumers".

Bata India has received "great response" from consumers wherever it has gone.

"We want to do more of it across all our categories," he said, adding that Bata has "just launched a pretty large classical campaign, Victoria Ballerina. It's our most curated collection of ballerinas, but all of them are priced below Rs 1,000 and that is to attract these consumers who are feeling the pinch of inflation." On the premium side, Shah said its brands HushPuppies, Bata Comfit Floatz, and Power Floats, which cater to the higher end of the consumer spectrum, continue to do well.

"We want to invest in those floats... HushPuppies is a flagship premium brand; it has already crossed about 150 stores, we want to cross about 200 stores in the near term, so it will itself become a pretty large brand by itself," he added.

Bata India has an expansive retail network consisting of over 1,950 stores, including those owned by the company and franchises.