The footwear industry is one of the largest consumable and competitive industries in India dominating with numerous brands across all sectors. India is the second largest producer of footwear pairs in the world after China. New brands are evolving in the market in different footwear styles like sandals, flip-flops, shoes, and others. Some companies are even making footwear products with recyclable plastic, and waste materials.
Despite this, there are only a few brands with a long history and a significant market share. There are two of them: Relaxo and BATA, which is what we are going to talk about today.
Foot ware market size in India
As per Statista the foot ware market size in India is $27.1 billion dollars in 2023. And the footwear industry is expected to annually by 4.60% CAGR (2023-2027).
Foot ware growth
Relaxo vs Bata – About
Let us look at the Relaxo stock first
Relaxo
Relaxo is an Indian footwear brand that offers a diverse set of foot ware products for men, women, and children. the company was incorporated in 1984 since then it has become the industry leader in the footwear industry. Relaxo foot ware has some iconic brands such as Sparx, Flite, Bahamas, Boston, Marry Jane, and kids fun.
Revenue
| Date | Dec 2019 | Dec 2020 | Dec 2021 | Dec 2022 |
| Revenue | 2,292 | 2,410 | 2,359 | 2,653 |
| PAT | 175 | 226 | 291 | 232 |
BATA
Bata India is one of the oldest companies in India which was formed way before Indian independence has gotten. The company was incorporated in 1931 as Bata shoe company private limited near Calcutta. The company went public in 1973 as bata limited.
Bata has a retail network of 1,375 stores and 30,000 dealers.
| Date | Dec 2019 | Dec 2020 | Dec 2021 | Dec 2022 |
| Revenue | 2,928 | 3,053 | 1,707 | 2,387 |
| PAT | 329 | 326 | -90 | 100 |
Although both companies certainly possess equal numbers in revenue, the share performance is different.
Relaxo vs Bata – Ratios comparision
Differences
| Metrics | Relaxo Foot ware | Bata Foot ware |
| Market share | Relaxo is the no 1 brand in the market share | Relaxo is the no 2 brand in the market share |
| Revenue Growth | Although Relaxo foot ware has a revenue growth of 12.47%, | Bata foot ware has a revenue growth of 39.85% in one year. But its 3-year growth is very poor |
| Profit growth | -20.19% is the profit growth in one year. | Has a staggering growth of 211.75% in one year compared to the previous year. |
| ROE, ROCE | ROE and ROCE are 14% and 19.5% respectively. | ROE and ROCE are 5.65% and 13.22% respectively. |
| Liabilities | 2,382 cr ( Total liabilities as of 2022) | 3,419 cr ( Total liabilities as of 2022) |
| Dividend yield | 0.33% | 3.84% |
| Shareholding pattern | Promoters – 71.02% Public – 18.35% DII – 7.64% | Promoters – 50.16% DII – 31.58% FII – 4.86% |
Relaxo vs Bata – SWOT Analysis
Strengths
| Relaxo Footwear | Bata Footwear | |
| Strengths | 1) Strong brand reputation – Relaxo has a strong brand reputation in the market with its superior quality and customer service 2) Relaxo offers several brands such as * Relaxo * Sparx *Flite *Bahamas * Schoolmate * Elena 3) Relaxo foot ware offers its products at competitive pricing with superior quality. | 1) Bata has a rich legacy in the Indian market and it is one of the oldest brands in India. 2) Bata has a different set of brands such as * Bata * Hush puppies * Power * Bubblegummers * Weinbrenner * Marie Claire 3) Bata has a strong distribution network across India. Its retail network of 1,375 stores and 30,000 dealers. |
| Weakness | 1) Dependence on the Indian market – Relaxo doesn’t have a great market share outside of India. 2) Low Pricing – Most of the products produced by Relaxo footwear have competitive pricing. So, the margins are lower | 1) Low expansion – Similar to Relaxo, Bata has a very low expansion globally. 2) Limited product innovation – Bata stills lacks in product innovation and development. |
| Opportunities | 1) Increasing demand for footwear – There has a growing demand in the footwear industry, especially from the Genz and millennials 2) Online e-commerce – | 1) Demand for footwear – There has a growing demand in the footwear industry, especially from the Genz and millennials 2) More products |
| Threats | 1) Rise in competition – new brands are expanding their business by capturing the trending market. 2) Commodity prices – Due to inflation, prices of raw materials are rising which in turn damages the product margins. | 1) Rise in competition – new brands are expanding their business by capturing the trending market. 2) Commodity prices – Due to inflation, prices of raw materials are rising which in turn damages the product margins. |
Bottomline
Relaxo and Bata are two people’s favorite brands in India which have a strong product line across all the segments. Relaxo lost almost 33% last year whereas compared Bata lost 16%. Relaxo is facing some issues related to this prediction and profit margin. While both of the companies are debt-free, Relaxo has a better return on capital equity.