The company, which does a Rs 3,500 crore business in the country, recently appointed India CEO Sandeep Kataria as its global head. Kataria, who had taken over as India head in 2017 and under whom Bata India's profits rose 46 per cent, tells Ajita Shashidhar how India's diverse footwear consumption habits have given him a unique understanding of customer needs across the globe. Edited excerpts:
It will be interesting to know what the pandemic has taught you ...
The pandemic has been a great learning experience. The first is the huge effort of the team to ensure that our stores are open and our supply chain fully functional despite working remotely. The huge collaboration has flattened the organisation in many ways. The other part is ability to take innovations forward. The organisation has shown tremendous agility. We have launched store-on-wheels to get close to consumers, and WhatsApp calling, through which our people have been able to reach out to Bata Club members and meet their requirements at home, apart from new collections such as washable footwear. The pandemic has shown us organisation muscles we were not aware of. It will put the company in a great position to go forward.
What did you tell your team when operations came to a halt and business began to shrink?
When the pandemic first broke out, the most important thing was to ensure that everyone was safe, and more importantly, aware of what was going on in the organisation. That was a period of over-communication, having town-halls with our managers across the country every fortnight, every functional leader reaching out to their teams at least twice a week to make sure they knew what was happening and how we were moving ahead. We said there would be phases, and the first phase was survival. Then came revival. We started reaching out to consumers. Then there was the revitalise phase, when we said we can see footfalls, so how can we expand our reach, how can we get closer to consumers? We are in the revitalise phase, getting sharper, getting our act on products and channels right. Our ability to bring in learnings from several markets and use some of those in India helped us plan for the future.
You talked about the pandemic helping you flatten the organisation. Can you elaborate?
When you are working in a physical environment, the number of people you can reach out to is limited. Let me give you an example. Pre-Covid town-halls had people only from our head-office in Gurgaon as we could accommodate only 100-150 people. When we went into the new world, all our 1,100 managers, across locations, could hear me at the same time.
Did those town-halls generate ideas for some of your recent innovations?
The ideas came from everywhere, from our team's experiences, from other markets of Bata. The idea for store-on-wheels came from an experience one of the managers had when his friend said his elderly parents in Bangalore needed footwear and if there was a way to deliver at their home. We started with a test in Gurgaon, but within three weeks, were active in 40 cities and putting up 170 stores every week. WhatsApp calling started in Indonesia where lockdown started earlier than in India.
What kind of innovations have you come out with in past few months?
There are three-four big innovations that we started to work on this year, two of which we did in the midst of the lockdown, and rolled them out in the beginning of the unlock phase. The first was the washable collection. We also launched the work-from-home collection, easy to put on, comfortable footwear. Though Bata is synonymous with comfort, we took it forward by saying we will also deliver to homes. We also said that footwear could play a role in how one turns up in the video call.
We also launched an anti-bacterial range. We had introduced this for children last year. It had a natural anti-bacterial agent. We forayed into masks too. Initially, we made masks for our factory workers and also supplied to Kolkata Police personnel close to our Batanagar factory and ESIC hospital workers and then ramped up production to sell in the stores as well.
Has the pace of innovations increased during the pandemic?
The innovation cycle has become shorter. The overall need is in line with the demand. I wouldn't say the overall pace or quantum has been too different but speed and agility has been higher. The innovations are based less on seasonal and fashion trends and more in response to consumer needs.
Rural and Tier II/III markets have shown higher resilience compared with metro markets for most businesses. What kind of trends is the footwear sector witnessing?
Demand came faster in Tier III/IV markets for us too because metro consumers worked from home for a longer period. But metro markets bounced back during the festival season. The interest in smaller towns is continuing. In towns with population of 50,000-3,00,000, where we have franchise stores, the interest is much higher. Our franchise partners are showing interest in opening second and third stores.
You mentioned that you entered into a lot of partnerships during the pandemic. Can you give us some details?
There have been several, one being taking our digital play to the next level. For example, we were able to put in a simple feature on our app and WhatsApp that helped buyers check their footwear size by using the smartphone camera. We were able to find a start-up which developed and integrated the feature with our website.
An omni-channel strategy is a must-have today. However, companies with traditional DNA have been finding it difficult to switch. How has been your experience?
We were omni-channel prior to Covid. If you were a digital native, you could use bata.in, where we have 5,000 articles, or one of the marketplaces. If you were a digital adopter and a little hesitant to make card payments, you could do assisted ordering in stores. The pandemic allowed us to launch a WhatsApp-based ordering system. We were able to reach out to not just digital natives but also adopters. We went further down to digital novices (who are not comfortable with digital) for whom we had store-on-wheels. Our people were able to book orders through their tablets. Consumers could also use our tablets to choose.
Is business back to pre-Covid days?
We are moving up every week, slowly but steadily. A lot of our categories are back to pre-Covid numbers but there are other categories such as school shoes (40 per cent business) which are still impacted. Overall, in value terms, we are at 75-80 per cent of last year. We should get into growth towards the end of quarter one.
A lot of people think Bata is an Indian brand. It is also better known as a school shoe brand. Are you doing anything to change these perceptions?
We are extremely proud of the first part. I don't think I would want to change that. Bata's strength has always been that it is seen as a local brand in all the 70 countries where it operates. That's how we have developed the brand. We have looked at demand in respective markets and that has reflected in our products. In India, for instance, we sell a lot of open footwear like chappals and sandals, whereas in the Czech Republic, open footwear is a minuscule part of our offerings. People's belief that Bata is an Indian company is a huge strength for the brand.
Yes, it's a brand we have worn to school, but it's also a brand one buys when one starts working. We realised our customers saw us as a school shoe brand and we needed to bring a wider variety of products. Our campaign tried to change perceptions. Consumers came to check out merchandise at our stores and website. This added to our profitability.
What is the perception of Bata in the global market?
There is lot of love for the brand in the 70 countries we operate in. The brand universally stands for comfort, durability and great value for money. What we need to do even globally is to make sure that we reach out to millennials. We are market leaders in most of the markets where we operate.
What are the lessons from the Indian market that you intend to take with you?
The past three years have given me fantastic introduction to the footwear industry. The best part about the Indian market is the diverse learning. Right now, we have cold in hills in the North, while temperatures in several other parts of the country are high. The footwear needs are quite different. This will help me understand the diverse needs of consumers in various countries.
What kind of investments are you planning to make in India in the months to come?
The investment decision will depend on needs through the year. It will depend on market conditions and the way demand picks up.