Footwear&Accessories Verticals Students Submissions


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Submitted by - Md. Ishad Ali & Abdul Rahim Students of Vikas Sharma - Visiting Lectuer on Retail Verticals at Accman Institute of Management

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Footwear&Accessories Verticals Students Submissions

  1. 1. <ul><li>The history of footwear goes back many thousands of years. </li></ul><ul><li>History of the shoe starts in 10,000 BC, that is, at the end of the Paleolithic period (paintings of this time in caves in Spain and in the south of France make reference to the footwear). </li></ul><ul><li>In the Egyptian hypogeus (underground chambers used to multiple funerals), whose age is between 6 and 7 thousand years, paintings were discovered representing the various stages of the preparation of the leather and the footwear. </li></ul><ul><li>In cold countries the moccasin is the protector of the feet and in hotter countries the sandal is still the most used. </li></ul><ul><li>The Egyptian’s sandals were made of straw, papyrus or of palm fiber. </li></ul>
  2. 2. <ul><li>In Mesopotamia it was common raw leather shoes tied to the feet by straps of the same material. </li></ul><ul><li>The boots were symbol of high social status. </li></ul>
  3. 3. <ul><li>In Rome the footwear indicated the social class. </li></ul><ul><li>This four leather tapes Shoo tied with two knots and the traditional footwear of the legions was the short boot that uncovered the toes. </li></ul>
  4. 4. <ul><li>In the middle age, men as well as women wore leather shoes whose form was similar to the ballet slipper. </li></ul><ul><li>Men also wore high and short boots tied in the front and in the side. </li></ul><ul><li>The most current material was the cow skin, but the upper quality boots were made of goat skin. </li></ul>
  5. 5. <ul><li>The king Edward (1272-1307) was the first to uniform the procedures. </li></ul><ul><li>The first reference known of the manufacture of footwear in England is of 1642 when Thomas Pendleton provided 4,000 pairs of shoes and 600 pairs of boots to the army. </li></ul><ul><li>In the middle of the 19th century the machines that helped in the confection of the footwear began to appear, but only with the sewing machine the shoe started to be more accessible. </li></ul><ul><li>In 20th century big changes in the footwear industries began to happen as the change of the leather by the rubber and synthetic materials. Mainly in the female and infantile footwear. </li></ul>
  6. 6. <ul><li>Pendleton's employees made the shoes from the beginning to the end, but in the modern industry the process is divided into many and distinct stages as: </li></ul><ul><li>Modeling: creation, elaboration and accompaniment of the models in the manufacture process; </li></ul><ul><li>Warehouse: act of receiving, storage, classification and control of the leather and other materials </li></ul><ul><li>Cut: operation of cut of the different parts that compose the &quot;cabedal&quot; (upper part of the footwear). In the cut special blades and/or knives are used to pressure the metallic molds in the leather surface and/or other materials </li></ul><ul><li>Chamfer: leather preparation to receive the sewing </li></ul><ul><li>5. Sewing: junction of the parts that compose the &quot;cabedal&quot;(upper part of the footwear). In many companies this sector is subdivided into preparation, chamfer and sewing; </li></ul><ul><li>6. Pre-manufactured: manufacture of soles, shoe heels and slippers. Many companies don’t have this sector because there are specialized factories that produce these materials </li></ul><ul><li>7. Distribution: it controls the volume of production, revises the quality of the materials and distributes them to the sections of assembling and final touch (finishing); </li></ul><ul><li>Assembling: set of operations that join the upper part of the footwear with the sole </li></ul><ul><li>Finishing: final operations linked to the presentation of the footwear as brushing, painting and cleaning </li></ul><ul><li>Assembling and finishing: in many companies these two sectors are organized in assembling line, that is, work rates replaced in line and the elaborating product incorporates the partial operations of each worker until the end of the line, where the product results finished; </li></ul><ul><li>11. Expedition: packing, boxing and sending to the destination market. </li></ul>
  7. 7. <ul><li>U.S. footwear industry has been severely affected over the past decade; imports account for about 90 percent of shoes sold in the country. </li></ul><ul><li>The U.S. accounts for about 40 percent of footwear imports. </li></ul><ul><li>In 1998, Americans spent approximately $38 billion to purchase more than 1.1 billion pairs of shoes. </li></ul><ul><li>Since 1976, imports have grown at an average rate of 5.6 percent a year. </li></ul><ul><li>More than half of the footwear deficit is with one country -- China. </li></ul><ul><li>China accounts for about 68.3 percent of all footwear imports into the U.S. Brazil is second with 8.3 percent of the market. </li></ul><ul><li>The low cost of labor in China makes it a very attractive place for foreign shoe manufacturers to build factories. Since 1986, U.S. imports from China have increased by a staggering 2,700 percent. </li></ul>
  8. 8. <ul><li>Most of the companies are concentrated in Istanbul and Izmir, where there are almost 40,000 to 50,000 shoemaking companies. Almost 50 % of the total number of companies are active in Istanbul. </li></ul><ul><li>Konya, Ankara, Gaziantep, Manisa and Denizli, Adana, Malatya and Çorum (Iskilip) are the other important shoe production centers. </li></ul><ul><li>The production capacity of the 33 leading companies in the sector is 328,100 pairs daily. </li></ul><ul><li>Turkey's shoe production reached 153 million pairs in 2001. Almost 25 % of the production consists of leather shoes. </li></ul><ul><li>The share of the shoe parts industry in the total shoe industry production is around 5 %. Production is very diversified. </li></ul><ul><li>30 % of the production inputs are imported. </li></ul>
  9. 9. Countries 2000 2001 2002 Saudi Arabia 15723 17354 18774 Russian Federation 19455 12343 11258 Israel 6831 9171 9432 France 5415 7690 9140 Germany 6400 5913 7461 Ukranie 4226 10286 6202 Libya 3997 2687 6188 Netherland 3194 3787 5471
  10. 10. England 1 299 3 079 5 300 Poland 5 154 5 995 4 950 Greece 2 383 3 318 4 543 Hungary 3 830 3 515 3 011 Romania 2 109 1 861 2 687 Belgium-Lux 1 948 1 844 2 668 Italy 916 1 210 2 254 Others 31 304 36 063 32 017 TOTAL 114 184 126 116 131 356
  11. 11. <ul><li>The Footwear Industry is a significant segment of the Leather Industry in India. </li></ul><ul><li>India ranks second among the footwear producing countries next to China. </li></ul><ul><li>India produces more of gents’ footwear while the world’s major production is in ladies footwear. </li></ul><ul><li>In the case of chappals and sandals, use of non-leather material is prevalent in the domestic market. </li></ul><ul><li>The major production centers India are Chennai, Ranipet, Ambur in Tamil Nadu, , Mumbai in Maharastra, Kanpur in U.P. , Jalandhar in Punjab, Agra and Delhi. </li></ul>
  12. 12. Region Large & Medium Scale SSI Household Tamil Nadu 64 31 7 Delhi & up North 4 8 25 Agra, Kanpur 9 34 14 Calcutta 1 3 19 Bangalore 6 3 4 Mumbai 3 11 Others 13 10 32
  13. 13. Region Leather shoes Non-leather Shoes Leather Shoe Uppers Leather Sandals Non Leather Sandals Tamil Nadu 26 5 54 1 0 Delhi & up North 10 77 4 1 60 Delhi & up North 45 0 32 62 0 Calcutta 12 0 2 3 0 Bangalore 3 3 4 0 0 Mumbai 4 2 1 32 0 Others 0 13 3 1 40 Total 100 100 100 100 100
  14. 14. <ul><li>The estimated annual footwear production capacity in 1999 is nearly 1736 million pairs (776 million pairs of leather footwear and 960 million pairs of non-leather footwear). </li></ul><ul><li>Shoes manufactured in India wear brand names like Florsheim, Gabor, Clarks, Salamander and St. Micheal’s. As part of its effort to play a lead role in the global trade, the Indian leather industry is focusing on key deliverables of innovative design, consistently superior quality. </li></ul><ul><li>The availability of abundant raw material base, large domestic market and the opportunity to cater to world markets makes India an attractive destination for technology and investments. </li></ul>
  15. 15. <ul><li>IMPORT </li></ul><ul><li>In 1999, the global import of footwear (leather and non-leather) in terms of value was around US$ 43278 million, accounting a share of 63.42% in the total global import of leather and leather products. Out of this, import of leather footwear alone accounted for US$ 26379 million and non-leather footwear US$ 16899 million. </li></ul><ul><li>EXPORT </li></ul><ul><li>India’s export of Leather Footwear touched US$ 331 million in 1999-2000, recording an increase of 3.29% over the preceding year. India thus holds a share of 1.25% in the global import of leather footwear. The major markets for Indian Leather Footwear are the U.K., the U.S.A., Germany, Italy, France and Russia. </li></ul><ul><li>Nearly 71% of India ‘s export of Leather Footwear is to Germany, the U.S.A., the U.K and Italy. </li></ul><ul><li>In 1999-2000, export of leather footwear from India constituted 21% share of its total export of leather and leather products. Nearly 33 million pairs of various types of leather footwear were exported during the year, out of which shoes / boots constituted 90%. </li></ul>
  16. 16. Export projections for the next two years: (Value in million US$) Product 1998-99 1999-2000 2000-2001April-Feb Leather Footwear 320.25 330.80 348.96 PRODUCT 2001-02 2002-03 Leather Footwear 453 506
  17. 17. <ul><li>Puma </li></ul>
  18. 18. <ul><li>Reebok </li></ul>
  19. 19. <ul><li>Adidas </li></ul>
  20. 20. <ul><li>Nike </li></ul>
  21. 21. <ul><li>Gold star </li></ul>
  22. 22. <ul><li>Gucci </li></ul>
  23. 23. <ul><li>Armani shoes </li></ul>
  24. 24. <ul><li>Provogue </li></ul>
  25. 25. <ul><li>Campus </li></ul>
  26. 26. <ul><li>Bata </li></ul>
  27. 27. <ul><li>Liberty </li></ul>
  28. 28. <ul><li>Fashion accessories are items used to complement the whole outfit. </li></ul><ul><li>They include colorful range of bags and purses, ties, belts, shawls, scarves, handkerchiefs, suspenders, caps, hats, footwear, fashion eyewear and watches. </li></ul>
  29. 30. <ul><li>The fashion accessories industry is on the verge of complete metamorphosis. </li></ul><ul><li>The global clothing accessories industry generated total revenue of approximately US $74.9 of the overall industry value. </li></ul><ul><li>The accessories industry growth in 2006 initiated fierce competition in the sector. </li></ul>
  30. 31. <ul><li>The bags and purses industry is an important segment of the fashion accessories industry. </li></ul><ul><li>Bags are made up of many fabrics like cotton, denim, polyester, nylon etc but most of the bags and purses are made up of leather. </li></ul><ul><li>Globally, the top eight countries manufacturing and exporting bags and purses includes China, India, Vietnam, Pakistan, Philippines, Germany, Hong Kong and Indonesia. </li></ul>
  31. 33. Category 2005 2006 Briefcases/ executive cases 5,782 5,487 Handbags 12,707 26,190 Travelling bags 9,867 10,737 Others 4,773 1,612
  32. 34. <ul><li>The global watch market, currently valued at US $ 26.5 billion dollars, </li></ul><ul><li>China exhibit significant growth of 9% and 7% respectively, but in sharp contrast, the Japanese players experienced a period of stagnation. </li></ul><ul><li>The largest manufacturers of watches are China, Hong Kong, Thailand, Australia, USA, India, Greece and Peru. </li></ul>
  33. 35. <ul><li>Steep increases in raw material prices, </li></ul><ul><li>Over capacity and competition, </li></ul><ul><li>Changes in consumer buying power in key markets, </li></ul><ul><li>Emergence of new markets, </li></ul><ul><li>Increasing consumer consciousness and </li></ul><ul><li>More vigilant governments and regulators </li></ul>
  34. 36. <ul><li>Fashion jewelry is nothing but a replica of jewelry crafted out of materials like ivory, lac, leather and semi precious stones and can be further classified on the basis of material and type of end products like necklace or rings. </li></ul><ul><li>Fashion jewelry by material includes jewelry made of materials like aluminium jewelry, brass jewelry, lac jewelry, leather jewelry, ivory jewelry, silver plated jewelry, beaded jewelry, stone jewelry, terracotta jewelry, etc. </li></ul><ul><li>Fashion jewelry is also known by the names like costume jewelry, designer jewelry, imitation jewelry etc. </li></ul>
  35. 37. <ul><li>The Jewelry industry can truly be termed as a global industry, </li></ul><ul><li>Because raw materials are derived from Australia, Africa, Russia and Canada, manufacturing takes place in China, India, Italy and Turkey </li></ul><ul><li>The largest retail markets of jewelry are USA, Europe, Far East, Middle East and Asia </li></ul><ul><li>The three most important activities related to this industry are mining, polishing and retailing. </li></ul><ul><li>This industry has underwent many changes since the beginning of this millennium and this is due to a lot of factors affecting the industry like a steep rise in raw material prices, changing consumer patterns and imposition of a lot regulations by the government. </li></ul>
  36. 38. <ul><li>The sale of fashion jewelry is mainly concentrated in eight of the world’s largest markets, which together constitute three fourths of the total sales of jewelry. </li></ul><ul><li>USA is the largest market for fashion jewelry and had a share of 31% of the total global fashion jewelry sales in the 2006. </li></ul>
  37. 40. <ul><li>The other important markets are China, India, Japan, Middle East, Italy, United Kingdom and Turkey. </li></ul><ul><li>India and China have shown a great rise in sales during the past five years </li></ul>Market Trends in 2006
  38. 41. <ul><li>Some of the factors hindering the growth of the fashion jewelry industry in the world are: </li></ul><ul><li>Due to a shortage in the supply of raw materials, there is a steep hike in the prices which has led to a great competition among the countries where polishing takes place. This has led to a shortage in the supply of polished semi-precious stone and thereby creating a shortage for manufacturers of finished jewelry and thus the whole supply chain is affected. </li></ul><ul><li>Changing fashion trends and increased consciousness of the consumers has resulted in competition among the major manufacturing nations, and also shifting of the industry to low labor cost countries. </li></ul><ul><li>Retailing sector has also been affected due to competition from other luxury goods, declining investment in the sector (largely in the developed economies) and increasing consumer sophistication. </li></ul>
  39. 42. <ul><li>Based on the above trends the projections for growth of jewelry industry are as follows: </li></ul><ul><li>The growth in sales of the industry as a whole will slow down and the world will notice the emergence of new markets. The global fashion jewelry sales will grow at the rate of 4.6% annually and is estimated to reach US $ 185 billion by 2010 and US $ 230 billion in 2015. China and India together will emerge as equivalent to the US market in 2015. </li></ul><ul><li>Jewelry fabrication services will also show sluggish demand and will move to new centers. The CAGR of global fashion jewelry fabrication is estimated to be 5.1% by 2015. China and India will be the new centers for jewelry fabrication. </li></ul><ul><li>Lowering margins in profit and debt levels in the industry will help to build up the fashion jewelry industry. </li></ul><ul><li>By the year 2015, the fashion jewelry industry will witness the emergence of a number of giant markets, which will be the industry leaders of the future. </li></ul>
  40. 43. Projected global fashion jewelry sales (2010,2015), USD billion
  41. 44. <ul><li>The future of fashion jewelry industry lies in the developing countries and primarily China and India. </li></ul><ul><li>The African countries producing raw materials will also benefit from the expansion of these markets. </li></ul><ul><li>Thus on the whole the future for the industry is bright but still certain steps need to be taken by the key players to increase supply of raw materials and reform the supply chain. </li></ul>
  42. 46. <ul><li>Presented By: </li></ul><ul><li>Md. Irshad Ali </li></ul><ul><li>Abdul Rahim </li></ul>