Footwear biz sprints to finishing line in leather export
Leather export seems to be on a growth overdrive. The footwear segment, the fastest-growing segment in the leather basket.
By Nandini Sivakumar, ET Bureau |
CHENNAI: Leather export seems to be on a growth overdrive. The footwear segment, the fastest-growing segment in the leather basket, recorded a 30.91% rise at $1,067 million till Feb ���08, compared to the same period in 2006-07, according to data compiled by the Indian Finished Leather Manufacturers and Exporters Association (IFLMEA).
For the past three years in a row, leather footwear has maintained a double-digit growth. With European countries losing the cost advantage, manufacturing has shifted to Asia, mainly to China, Vietnam and India, IFLMEA chairman Dr Zackria Sait told ET. This is one of the reasons for the uptick.
The growth of the leather footwear segment is twice as much as the total leather export growth (14.8%). Actual figures have, in fact, more than doubled in the past five years, from $423 million in 2002-03 to $1,067 million for April 2007-Feb 2008 period.
Earlier, leather garments used to be the fastest-growing segment. But for the past few years, footwear and women���s accessories (bags, belts and wallets) have taken the top two slots,��� he told ET. Garments are still a good business proposition, especially in the European countries, Mr Sait added.
Demand for leather garments has gone down mainly because of anti-leather protests, which Mr Sait dubs ���ridiculous and slanderous���. The industry in India does not thrive by killing animals for their skin. It is only dead animals that are skinned for leather.
���They should actually target the meat industry as that is the one that thrives on animal slaughter,��� he says. The leather component in leather goods varies with the product. While it forms 70% of the total product in wallets and footwear, it is slightly less at 60% for garments. In the total leather basket, the actual leather component is only around 50%, he added.
���Leather footwear is the engine of growth for the leather industry. Footwear comprises 65% of total leather exports worldwide, but is under 40% in India.
So, it is only bound to grow at a faster rate,��� Farida Group chairman M Rafeeque Ahmed told ET. The group has four leather shoe companies under it, all of them into exports.
Leather goods (which includes all products like bags, belts, wallets etc) hava also seen considerable increasefrom $335.36 million in FY03 to $713.65 till last February.
���Women���s handbags are the highest growing category in the luxury leather segment. Luxury brands advertise these heavily as these are the most profitable as well,��� leather handbag and accessories retailer Hidesign founder and president Dileep Kapur told ET.
But the appreciating rupee has affected the industry quite a bit. ���We���re in the middle of the selling season and have to maintain prices till October. But input prices have gone up. So, we have to bear the brunt,��� Mr Ahmed said.
But companies exporting goods under their own brand name have not been hit too much. ���Since its our own brand, we have some flexibility in revising prices, so we haven���t been hit as badly as other exporters,��� Mr Kapur said.
For the past three years in a row, leather footwear has maintained a double-digit growth. With European countries losing the cost advantage, manufacturing has shifted to Asia, mainly to China, Vietnam and India, IFLMEA chairman Dr Zackria Sait told ET. This is one of the reasons for the uptick.
The growth of the leather footwear segment is twice as much as the total leather export growth (14.8%). Actual figures have, in fact, more than doubled in the past five years, from $423 million in 2002-03 to $1,067 million for April 2007-Feb 2008 period.
Earlier, leather garments used to be the fastest-growing segment. But for the past few years, footwear and women���s accessories (bags, belts and wallets) have taken the top two slots,��� he told ET. Garments are still a good business proposition, especially in the European countries, Mr Sait added.
Demand for leather garments has gone down mainly because of anti-leather protests, which Mr Sait dubs ���ridiculous and slanderous���. The industry in India does not thrive by killing animals for their skin. It is only dead animals that are skinned for leather.
���They should actually target the meat industry as that is the one that thrives on animal slaughter,��� he says. The leather component in leather goods varies with the product. While it forms 70% of the total product in wallets and footwear, it is slightly less at 60% for garments. In the total leather basket, the actual leather component is only around 50%, he added.
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���Leather footwear is the engine of growth for the leather industry. Footwear comprises 65% of total leather exports worldwide, but is under 40% in India.
So, it is only bound to grow at a faster rate,��� Farida Group chairman M Rafeeque Ahmed told ET. The group has four leather shoe companies under it, all of them into exports.
Leather goods (which includes all products like bags, belts, wallets etc) hava also seen considerable increasefrom $335.36 million in FY03 to $713.65 till last February.
���Women���s handbags are the highest growing category in the luxury leather segment. Luxury brands advertise these heavily as these are the most profitable as well,��� leather handbag and accessories retailer Hidesign founder and president Dileep Kapur told ET.
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But the appreciating rupee has affected the industry quite a bit. ���We���re in the middle of the selling season and have to maintain prices till October. But input prices have gone up. So, we have to bear the brunt,��� Mr Ahmed said.
But companies exporting goods under their own brand name have not been hit too much. ���Since its our own brand, we have some flexibility in revising prices, so we haven���t been hit as badly as other exporters,��� Mr Kapur said.
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