What does 2023 hold? 2023 is likely to pan out as a good year for customers. There are a couple of reasons to believe so. The first and foremost is the improved affordability of products and quality improvement which can be attributed, in parts, to two reasons. One, cooling off of prices due to falling commodity prices internationally and two, improved supply of key raw materials due to gradual easing of external shocks leading to easy availability. This will help producers to pass on the benefits of falling raw material costs to the end customer.
Also, new technology and digital tools for designing will spur product innovation that will provide more choices to customers. On the whole, I see the level of customer satisfaction moving up significantly in 2023.
Opportunities and Challenges
A key challenge that the domestic footwear industry is facing is perhaps the legacy issue: its unorganised nature. Being an industry insider for a long time, for me, this remains as the chief challenge before the industry and perhaps its Achilles heel. In other words, the industry remains as scattered as it can get even as we are now in 2023.
In my view, the organised players should turn this challenge to their benefit by making inroads into hitherto untapped and underpenetrated markets, though it may take a while to get there. However, I am optimistic that with the right business strategy serious players can reach out to more and more customers by opening up new markets without losing sight of their key markets. Here, onboarding channel partners to reach out to more customers and open up new markets may be the key. The channel partners model is a time-tested market winning strategy and is now in vogue in almost every vertical in consumer-facing business. The industry must organise to give the customers the best – that is, long lasting and fashionable footwear at honest, low prices.
The other major challenge the industry may face is the possibility of rising cost of key inputs especially ones that are the derivatives of crude oil. However, this is one part of the cost that is beyond the control of industry.
(The author is MD, VKC Group.)
