A Eureka moment can happen to anybody, anywhere. This is believed to be particularly true for scientists and entrepreneurs, who often stumble upon new ideas accidentally. For Delhi-headquartered Asian Footwear founder and CMD Rajinder Jindal, the Eureka moment (at least in terms of choosing the nomenclature for his maiden venture) came when he was visiting the popular Chattarpur Temple near Mehrauli with his wife in 1994. On the way, he noticed the name ‘Asian’ written on a roadside outlet and decided to adopt it for his footwear venture. He was then working as a junior engineer in a government department, but had already decided to become an entrepreneur (he hails from a business family in Haryana’s Sohna) as he found the routine of a regular job quite stale. He had also taken some preliminary steps to set up a footwear business (his elder brother was in PVC production). That visit to the temple, and spotting the name ‘Asian’ as a brand, was taken as divine guidance.
His sports shoe-centric venture has today taken shape and typically reflects the old adage that slow and steady wins the race. After nearly three decades, the company seems to have found its way to turning those small steps of the early years into something much bigger. With most domestic footwear manufacturers scaling up their fast-growing sports shoe offerings, Asian is believed to have made it to the mid-tier bracket and, along with companies like Action and Relaxo, has become a formidable name in the R700-1,500 product segment. The company has upped the ante in brand building and marketing, led by ‘Captain Cool’ Mahendra Singh Dhoni as its brand ambassador. Equally important is the validation Asian Footwear has received in the marketplace, with the private equity arm of Motilal Oswal picking up a considerable stake in the company in 2022. In recent years, the company has moved at a brisk pace, as if it has found a new spring in its step, and is now targeting the Rs1,000 crore mark and an IPO. As the top brass maintains, the next 2 years will be critical in achieving the big leap for which the company is now well prepared.
Building brick by brick
Bahadurgarh, on the outskirts of Delhi in Haryana, is a well-known manufacturing cluster. It is particularly notable for its large-scale footwear park, comprising manufacturers (including contract manufacturing partners of major companies) of all scales and sizes. The location serves as a major footwear hub, particularly catering to consumers in northern India. For logistical reasons, it is also a convenient base for establishing a robust supply chain to parts of western India.
Within this cluster, one comes across the prominent presence of Asian Footwear’s manufacturing unit, which currently has nearly 15 assembly lines. It is clearly the fulcrum of Asian Shoes’ manufacturing base, which comprises over a dozen units of varying sizes in and around Delhi. The unit specialises in sports shoe production, the mainstay of the company.
“Right from the beginning, we were inclined to specialise in the sports shoe segment, even though we have capabilities in school shoes, sneakers and even ordinary slippers. But sports shoes are the driving component of our business, and this strategy received a shot in the arm when we launched this plant around 2010. Since then, our business has moved to a new trajectory,” Rajinder Jindal recalls.
Around the mid-1990s, the company started from a 100-square-yard facility in Delhi’s Tri Nagar, a locality in west Delhi. According to the head of the company, although the beginning was modest, its focus on quality and innovation put it firmly on the growth path. “Though we were quite small then, we did many things that were new. For instance, we were among the first manufacturers to produce dual-colour sports shoes in the country,” he points out. He adds that between 1995 and 2000, Asian Shoes was trying to establish itself in the marketplace with its school and sports shoe ranges. Having built a modest base, the next decade was devoted to the gradual expansion of its portfolio across product lines such as PU, EVA, open footwear and the kids’ range. Simultaneously, it expanded capacity by adding new units while also establishing a strong dealer network across India.
Current positioning
A company like Asian Shoes has also been a direct beneficiary of demonstrating resilience in a market that has grown by leaps and bounds over the past few decades. According to a report, India has emerged as the world’s second-largest player, after China, in the global footwear manufacturing segment and currently accounts for a 13 per cent market share. While the annual Indian footwear market is estimated to be worth $11-12 billion, the share of athletic or sports footwear is estimated at 25-30 per cent. This segment has maintained a healthy CAGR of 11-12 per cent and, by the end of this decade, the Indian footwear market is poised to cross the $17 billion mark in annual sales.
These statistics and current trends clearly indicate positive momentum in favour of footwear products, with sports shoes among the leading categories. When it comes to the sports segment, as market observers point out, there is a clear categorisation. The premium brigade is led by the likes of Adidas, Nike and Puma. Among the prominent names in the mid-tier segment are Bata, Relaxo, Action and now Asian as well.
“We are mostly operating in the Rs700-Rs1,500 category,” says Aayush Jindal, CEO of the firm and the second generation now at the helm. Having joined the company around the middle of the last decade, the IIT Delhi alumnus now holds operational and strategic command of the company. Overall, the company offers a wide portfolio comprising sports shoes, sneakers, canvas shoes, school shoes, Phylon sandals and an EVA footwear range.
In a market defined by intense competition and much stronger players, Asian has stepped up by making calculated moves. On the footwear side, it was among the first batch of companies to align with online marketplaces, having been listed on eBay and Snapdeal as early as 2010. It later moved to Flipkart and Amazon over the next 5 years as these platforms emerged as the leading channels catering to the huge volume of Indian consumers. In a marketplace like India, Asian Shoes adopted an almost contrarian sales strategy by focusing more on the online segment, while relying on wholesalers and multi-brand outlet partners for its offline business. It was only in 2022 that it launched its first exclusive brand outlet.
Meanwhile, after Aayush came on board, the company claims to have made major advances in product technology by introducing Hyper Cushion (E-TPU), Nitro Capsule Technology, Memory Foam Cushioning, knitted uppers and advanced moulding systems in production. Simultaneously, a clear-cut brand-building strategy also emerged with the signing of nationally recognised brand ambassadors. First came Virender Sehwag in 2019, followed by Mahendra Singh Dhoni, who became the new face of the company in 2023.
“It has really helped. If you look at these personalities, while they are popular across the country, someone like Dhoni has a special appeal among young customers in non-metro markets since he comes from that kind of background,” says the chairman.
As a result of all these factors, Asian Shoes’ products are now available through about 30,000 multi-brand outlets nationwide. The company has a monthly manufacturing capacity of over 15 lakh pairs, an SKU portfolio of more than 2,000 products, and has recently launched a unique quick-commerce initiative called Asian Flash, under which it is committed to delivering products within 60 minutes across 100 PIN codes in the country. Overall, the company has a presence across 28 states.
“We are strong in northern India and also in Maharashtra and Gujarat,” says Rajinder Jindal. The company is believed to have witnessed a major spike in its topline, and Jindal confirms that it has crossed the R700 crore mark.
The springboard effect
With sports shoes contributing nearly 80 per cent of its revenue, Asian Shoes has, in recent years, emerged as a more prominent name in its segment. One of the factors attributed to this is the investment by the private equity arm of Motilal Oswal, amounting to Rs225 crore for a significant minority stake, believed to be in the range of 16-18 per cent.
“We have made investments in nearly 55 companies across four key verticals: consumer businesses, financial services, healthcare and manufacturing. Our deal with Asian is the only investment we have made in the footwear business,” says Vijay Dhanuka, MD & Co-Head (Private Equity), MO Alternates. Asked what prompted the firm to invest in Asian Footwear when there are several other notable names in the mid-tier segment, Dhanuka explains the rationale. “The consumption of footwear is still low in the country, but it is growing. There is a marked transition from unorganised to organised players, and this segment has maintained a CAGR of 8-10 per cent for many years. Secondly, we liked the fact that a qualified second-generation leadership team had shown the commitment to take the company to the next level.”
However, Motilal Oswal acquired its stake with a specific recommendation that the company move quickly to strengthen its offline presence. “When we infused funds, Asian Shoes was almost a pure-play online business, earning nearly 75 per cent of its revenue through this route. But we advised the company to expand its offline presence, and it has made swift progress on this front. Currently, the offline-to-online ratio is 60:40,” he explains.
Motilal Oswal’s arrival appears to have given a new direction to Asian Shoes’ growth strategy. The company has committed Rs 100 crore towards brand building and retail expansion. Having launched its first exclusive outlet in 2022, it has rapidly expanded to 75 EBOs (exclusive brand outlets) within 3-4 years. It has also launched initiatives such as Quantum 2.0 – MS Dhoni Signature Collection, marking its entry into the premium sneaker segment. Dhoni’s popularity has further been leveraged through the Go Chase brand campaign across television, OTT, digital, print and out-of-home (OOH) platforms.
The company has also announced a pan-India retail expansion targeting one lakh multi-brand outlets, particularly in Uttar Pradesh, Andhra Pradesh and Uttarakhand.
“Our own outlets are likely to double by the end of this fiscal,” says Aayush. Most of this expansion is planned for Tier-II and Tier-III locations. The company is all set to unveil a new large-scale manufacturing unit near its Bahadurgarh hub. The top management maintains that its flagship sports shoe range will be further strengthened through the introduction of specialised utility footwear.
“In categories such as trekking shoes, cricket shoes and others, you will notice additions to our portfolio,” says Rajinder Jindal. Aayush is quick to point out that the focus will remain on raising quality standards by offering superior products at competitive price points. “Look at our Hyper Cushion brand, which is the fastest-growing segment for us. Across the industry, this is among the most comfortable footwear you will find under the Rs3,000 price point,” he remarks.
Meanwhile, the marketplace is abuzz with speculation that the company has begun exploring the possibility of an IPO. Aayush confirms that this forms part of its medium-term strategy. “We will be aiming for it within a two-year time frame,” he says.
Broadly, the indications are that the process will begin after the company crosses the Rs1,000 crore topline mark, which could take another couple of financial years. Among its existing verticals, Asian Shoes also intends to strengthen its presence in the kids’ footwear segment – one of the categories with which it began its journey.
“Kids’ footwear is an area on which we are focusing because we have realised that there is a huge gap in the market for high-quality, comfortable kids’ footwear in the Rs1,000-2,000 price segment,” he says.
For the home-grown brand, there could well be several more factors adding a spring to its step in the years ahead.