The Indian Footwear Industry is Stepping Into Greatness

In 1961, an absent-minded professor named Ned Brainard invented a substance that gains energy when it strikes a hard surface. He called it “Flubber” – a portmanteau of “flying rubber”. In the film of the same name, Flubber helps a basketball team dominate their opponents when inserted into their shoes. Walt Disney's science-fiction comedy emerged during the sneaker culture boom in the United States and “Flubber” brought the idea of magical shoes to life.
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In the 2020s, India’s footwear industry will have its flubber moment. Indians are upping their shoe game, increasing ownership from 1.9 pairs per capita in FY20 to an expected 2.1 pairs by FY25. Footwear has evolved from utility to identity, becoming as crucial to one's look as an outfit or makeup. The Indian footwear market, valued at $12 billion, is set to grow to $17 billion over the next three years at a CAGR of 15-17%.
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This is not just a ‘consumer demand’ story, it’s also a ‘one-time shift in supply ecosystem’ powered by a nation finding its feet (pun intended) in manufacturing - an opportunity that comes once in decades. Take a walk with us as we dive deeper into both.

Consumer View: Premiumisation & Digital Penetration Driving Growth
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Indians are buying more shoes than ever. As the sector grows, it is shifting towards branded players and increasing digital penetration. Mid & premium price points in the category are growing at 13%, compared to 8% for mass and economy price points. Metro Brands, for instance, has outpaced Bata, with 44% of its sales coming from products priced above INR 3,000, thanks to its fashion-forward brand positioning. This is poised to continue as Indian habits change to more active lifestyles.

Category is Gathering Regulatory Tailwinds
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On the supply side, BIS (Bureau of Indian Standards) compliance requirements are set to revolutionise the industry. By requiring all foreign manufacturers to obtain a BIS certificate for imports, this regulation aims to reduce sub-standard imports while encouraging local manufacturing. India's access to essential materials like EVA, TPR, and PVC (both domestic and import-driven), along with its growing manufacturing expertise, positions it well for this transition. Companies like Agilitas founded by Abhishek Ganguly capitalise on this opportunity with ambitions to transform not just the consumer landscape (through exciting brands), but also invest in modern manufacturing and product development protocols. Rising tides will lift all boats, but some opportunities shine brighter.

We are particularly excited about two major opportunities in the footwear market: sneakers and sport & athleisure (S&A) shoes.

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Opportunity 1: Sneakers & Casual shoes:

A quick downward scan will reveal that office floors and metro platforms are no longer the preserve of being stepped on by formal leather shoes. Footwear is going through a “casualisation” revolution in India and the world. Both Casual shoes and Sneakers are capturing significant market share and present great opportunities for an India-led brand.
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Sneakers are social currency and have become essential for self-expression. The pop culture proliferation of sneaker culture especially Nike’s Air Jordans and Dunks has made multiple pairs of stylish sneakers in eye-catching colourways a mainstay for the young and urban. This massive cultural shift in acceptance of sneakers as an occasion-agnostic footwear choice impacts an en masse shift in purchase behaviour. This has opened up two price point opportunities in Sneakers & Casuals.

A. Bridge Range Sneakers: Sneakers in the INR 2.5K-4K range are blowing up. This segment is attracting both established companies and innovative digital-first challengers. There is a significant demand for high-quality, design-focused sneakers appealing to millennials and Gen Z. While global brands like Nike, Onitsuka, and Adidas cater to the rich, the youth are looking for great designs and a strong narrative at an India-centric price driving better value for money while still offering a premium product. Companies building a design and narrative-led brand are best placed to capture attention - delivering great quality, and helping consumers signal ‘taste’ and ‘relevance’. Check out brands like Comet and Gully Labs.

B. Mass-Premium Sneakers: In the INR 1.2-2.2K range, Sneakers cater to a massive market of Indians looking to imbibe Western street culture. As demand from T1/2/3 cities burgeon, sneaker brands like Rapidbox and Sole Threads cater to this segment. Large players like Campus are focused on re-imagining their brand to cater to this segment of aspiring sneaker enthusiasts. This is a large SKU width + innovative design play, similar to fast fashion. These companies will need to invest in a robust backend supply chain, either through their own manufacturing or tight vendor relationships.

Opportunity 2: High-Quality Sports & Athleisure Shoes:

As sporting activities increase and consumer spending on sports gear rises, there is a growing need for high-quality performance footwear. Brands like ON and Hoka are innovating on the silhouette and midsole of shoes, challenging established players like Nike. Indian brands have an opportunity to create high-quality sports shoes, especially for running and walking, which cut across price points and consumer cohorts. Only three of the top ten S&A footwear brands in India are Indian, highlighting the potential for disruption.

Alpha Opportunity: Technical Innovation in Midsoles

A shoe comprises the upper, insole, midsole, and outsole. Creating a footwear business involves understanding the technical complexities of shoe manufacturing. Molds for the outsole are often made in China and imported to India, while other components are assembled locally. Material and product innovation has been key to the success of global brands like Nike, Adidas, and Puma.

‍In the Indian market, the midsole offers significant opportunities for innovation. Typically made from foam materials like EVA or TPU, midsoles provide cushioning and reduce weight through efficient energy return. Each major global footwear brand has developed proprietary midsole technology, such as Nike’s ZoomX and Adidas’ Boost foam. Emerging brands like ON and Hoka are also pushing the envelope with innovative designs. Chinese companies like Li Ning have developed advanced technologies like Boom, setting themselves apart in the global market.

‍India-first innovation? An India-first performance brand will require both capital and strategic execution but is likely to be rewarded with a commensurate size of the prize. Depending on where you are, you have either a ‘monsoon’ or an ‘extreme weather’ situation (and sometimes a mix of both).  Couple this with a young, Instagram-first population chasing their fitness goals at an India-centric price point and you may have a winning combination.

Footwear Channel Choices: Build Traction Online, Grow Scale Offline

Footwear brands in India at scale must build both an online and an offline presence. Leveraging e-commerce platforms optimises discovery, while distributor networks for MBO and LFS Sales drive scale. For sneaker brands, online growth is crucial for building trust and brand recall. Even traditional players like Campus and Bata are investing heavily in online channels to redefine themselves.

EBOs (Exclusive Brand Outlets) are another effective strategy for brand growth. Nike, for instance, has pursued a D2C strategy vs. wholesale for over a decade. Campus, Bata, and Metro Brands are also investing in EBOs to deepen customer engagement. Wholesale remains a lucrative pathway for rapid scale, with brands like Puma, Adidas, ON, and Hoka focusing heavily on this channel.

What about Marketplaces for footwear - online / offline? It’s an interesting space with a lot of Incumbents (domestic and international) making a play for THE footwear destination. A globally adopted model, it is making its way to India as Footlocker enters the country in partnership with Nykaa and Metro. This model was pioneered in the country by Planet Sports over a decade ago and may likely pave the way to a new approach to consumer sport buying in India altogether. Can an upstart innovate on business models/ positioning to create enduring value? Never say never 🙂.

The Indian footwear market holds immense potential, with consumer, regulatory, and technical factors poised to create big opportunities. Over the next decade, we see several large players aiming to capture more share of a growing pie. The space is ripe for up-starts and innovators to build exciting brands, as Indians continue to find their expression in their fashion choices.

We are excited about the innovation and growth opportunities in this sector. If you are considering building in the footwear space, we’d love to chat. Drop us a line at consumer@matrixpartners.in

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