Bata intends to expand into approximately 500 urban areas predominantly through the establishment of franchise shops over the next five years.
Bata India Expands Presence in Tier 3 and 4 Towns
Bata India, a leading footwear company, has announced its expansion strategy for the next five years, focusing significantly on growing its presence in smaller towns. The company aims to leverage franchise stores to deepen market penetration in tier 3 and tier 4 towns, where there is rising demand for affordable and quality footwear.
The strategy aligns with broader Indian market trends where rural and smaller urban centers are experiencing increased purchasing power and demand for branded products, driven by improving infrastructure and rising incomes. Bata India's expansion plans are expected to balance durable and value-for-money footwear with fashion-forward options, catering to price-sensitive consumers in these regions while gradually introducing premium offerings.
Traditionally strong in tier 3 and 4 towns, Bata India intends to accelerate store rollout and local market adaptation through franchise stores. This approach minimizes capital expenditure and operational risks associated with company-owned stores. The product mix in such towns usually leans towards value-for-money and durable footwear, as consumers prioritize affordability and utility. However, Bata is increasingly including casual and semi-formal footwear to capture growing lifestyle aspirations.
The company sees a significant potential in India's growth, particularly in smaller towns. As of now, Bata India has over 600 franchisee stores across India, up from around 100 stores five years ago. The expansion ratio for the next two to three years is expected to be approximately 80% franchisee and 20% company-owned stores.
Despite a 71% year-on-year decline in its consolidated net profit for the first quarter of the current fiscal year, Bata India remains cautiously optimistic about a demand revival, particularly during the upcoming festive season. The decline in profit and flat revenue are attributed to sluggish consumption momentum during the quarter, which was impacted by weather pattern changes, preponed rains, and geopolitical disputes.
The flagship brand of the company, Bata, constitutes around 70% of the revenue. The company aims to make the Floatz brand a ₹800 crore brand in the next five years, with the brand already reaching the ₹100 crore mark in less than four years. Bata India is also looking to grow its exports, aiming for double-digit contributions to its revenue over the next three to five years. Power is currently a ₹500 crore brand for Bata India.
The company's revenue from operations for Q1FY26 stood at ₹941.85 crore, slightly lower than the previous year's Q1 (₹944.63 crore). Bata India remains hopeful that some temporary sluggishness in demand will go away, and initiatives taken by the government to encourage consumption will filter through.
- Bata India's expansion strategy over the next five years focuses on growing its presence in smaller towns, particularly tier 3 and 4, by leveraging franchise stores.
- The company aims to cater to price-sensitive consumers in these regions with a balance of durable and affordable footwear, along with fashion-forward options.
- Bata India expects to increase its store rollout and local market adaptation through franchise stores, which minimizes capital expenditure and operational risks.
- In the next two to three years, the expansion ratio is expected to be approximately 80% franchisee and 20% company-owned stores.
- Despite a declining consolidated net profit, Bata India remains optimistic about a demand revival, particularly during the upcoming festive season.
- Bata India is also looking to grow its exports, aiming for double-digit contributions to its revenue over the next three to five years.
