India’s footwear industry is at a critical juncture. Influenced by changing consumer preferences, brands operating in this segment are increasingly adopting technological advancements, exploring new sales channels, and embracing eco-friendly practices with recycled materials and vegan leather.
A prominent example is Bata India, which is in talks with quick commerce companies to offer its products via a 10-minute delivery service as the company navigates a challenging business environment.
Next, Delhi-based Bacca Bucci is building an affordable yet premium footwear brand, while Hyderabad-based Neeman’s is focussed on crafting sock-free, odour-free and comfortable shoes for daily wear.
The common thing between the two new-age brands is both are banking on sustainability to lock horns with giants in a market expected to reach an estimated INR 1.91 Lakh Cr by FY28 2028.
Amid the hustle, Prateek Singhal and Ahmad Hushsham are channelling their passion into creating maximum comfort for Indian feet. Launched in February 2021, their startup Yoho specialises in lightweight orthopaedic footwear made with cutting-edge technology. The brand currently offers 40 SKUs, each designed to tackle specific problems faced by consumers.
It sells its products on its website and via ecommerce platforms, including Amazon, Flipkart, Myntra, and Tata 1mg. Per its founders, the startup saw its revenue surge nearly 300% from INR 6 Cr in FY23 to INR 20 Cr in FY24.
So far, the startup has raised INR 20 Cr ($2.3 Mn) in a Pre-Series A funding round, led by SoftBank Investment Advisers’ CEO Rajeev Mishra, Rukam Capital, and Paytm’s Vijay Shekhar Sharma, among others.
It primarily competes with footwear brands such as Sketchers, Solethreads, Neeman’s, Bata, Comet, Doctor Extra Soft, and Ortho+Rest in the footwear segment.
If The Shoe Fits, Wear it
With over 12 years of experience in the footwear and ecommerce sectors, cofounder of Yoho Hushsham has worked with brands such as BigShoeBazaar.com, BeStylish.com.
A native of Kanpur, Hushsham was also a founding member of Jabong (now shutdown). Other than playing a key role in buying and merchandising footwear and accessories for the online marketplace, he has also spent six years at Paytm Mall, working closely with Vijay Shekhar Sharma on various initiatives, including fashion and international payment expansion.
However, his heart has always been crafting comfortable footwear. While exploring opportunities in the industry, he sought to convince his friend Singhal, who was initially sceptical about the market. But then, they decided to take the plunge, thinking, “If the shoe fits, why not wear it?”
Singhal, who has over 13 years of experience in management consulting and growth-phase companies, began his career in pharmaceutical consulting in the US. After five years of consulting, he launched his AI startup, SetuServ, in 2013.
He then joined Zomato in 2015, where he became a core member of the team, which was developing the online ordering vertical for the company. After Zomato, he led Tata 1MG’s diagnostics business, spearheading the company’s transition into a separate entity.
By 2021, the cofounders decided to delve deeper into the crowded Indian footwear industry. The cofounders discovered that while the premium and budget segments were crowded, the growing middle layer in India lacked high-quality, comfortable footwear options.
“In the middle segment, there were hardly any players offering high-quality, comfortable footwear. However, brands like RedTape and Campus emerged, demonstrating strong growth in this area, with RedTape expanding 6X to become a INR 1,500 Cr business in 5-6 years,” Singhal said.
These were the two examples that broke the camel’s back and convinced Singhal to join the fray, as per Hushsham. Fuelled with inspiration, the duo of cofounders zeroed in on creating unique SKUs.
This was also the time when the cofounders identified a gap in the footwear industry. The gap was that only a few Indian shoe manufacturers were serving the Indian market.
“While Kanpur has 400-500 export-focussed manufacturers, only two to three of them cater to the Indian consumer market. Similarly, Agra has around 200-300 manufacturers, but a majority of them focus on exports, with only a few creating brands for the Indian market,” the cofounders said.
The cofounders were looking at a clear opportunity, paving the way for them to launch their footwear brand, Yoho. Currently, the startup works with contract manufacturers in Delhi NCR, Agra and Chennai.
Yoho’s Product Stack
After incorporating their startup in 2021, the cofounders launched their first product only after nine months. During this time, the cofounder said, they invested heavily in research and entered an extensive product development cycle.
“From day one, we focussed on comfort as our USP, aiming to match global brands like Skechers, Hush Puppies, and Nike. We were confident in our ability to offer comparable comfort at a competitive price point, without the constraints of maintaining global pricing structures,” Singhal said.
With this, the cofounders launched their first product, the Bubbles, a high-orthopaedic slipper, in April 2022. They then launched their second product, EVA sole slippers. This product featured a foam-like structure to reduce stress on feet, ankles, and joints. This was followed by their Birkenstock sandals, currently their most-loved product, as per the founders.
The cofounders said that while similar products in the market range from INR 10,000 to INR 15,000, Yoho’s version is priced at just INR 600. They, however, added that they are focussed on offering comfort than style.
As the founders moved forward with their venture, they identified another gap in the market. This was the challenge of ill-fitting shoes for sizes 12 to 15, impacting 1-1.5% of India’s population. To address this, the cofounders invested in overcoming manufacturing challenges and developing appropriate soles.
“Although this market segment is not huge, Yoho’s mission is to tackle real footwear problems,” the cofounders said.
Therefore, in February 2023, they launched a big-size range along with Lofos, Yoho’s range of loafers. “Our loafers are distinguished by their flexibility—they can be folded and stored in a pocket. They are wrinkle free. This design resolves the issue of bulky shoes that restrict foot movement, offering a more comfortable alternative,” the cofounders said.
Earlier this year, they launched their latest product, Blinc Sneakers. As per the cofounder, these are India’s first hands-free sneakers, developed in two and a half years with 500 prototypes tested across five countries.
“These sneakers feature a unique spring technology in the ankle area, allowing users to slide in without bending down or using their hands. They also include elastic laces that adjust once and require no further touching. The sneakers have garnered significant attention, with celebrities like Rajpal Yadav and Prateek Gandhi endorsing them,” Singhal said.
Initially launched with two SKUs, Yoho’s product portfolio has now expanded to 40 SKUs, he added.
Yoho’s AI Road Ahead
As technology is central to the startup’s strategy, the D2C startup is developing an AI foot-scanning technology, which is set for launch later this year.
“Currently, in India, there are standard sizes, like UK 6 and UK 7, but our new system will accurately determine foot size and shape, recommending the perfect fit and reducing the need for returns. This technology is expected to be ready in about six months,” Singhal said.
The startup generates 95% of its sales online, with its website accounting for 26-27%. It began its offline expansion just three months ago and is now present in over 100 retail outlets across South and North India.
With a user base of 25 Lakh customers, the company receives the majority of its traffic from Hyderabad, Bangalore, and Delhi. Currently, 30% of its traffic comes from metros, while the remaining happens in Tier II and Tier III cities.
For the ongoing financial year, the cofounders have set their eyes on significant offline expansion, targeting 500 multi-brand outlets (MBOs). They also plan to open at least two exclusive brand outlets in southern India. With this, the startup aims to reach a revenue of INR 200-250 Cr over the next five years.
However, the founders see several challenges ahead of them. For instance, as per Singhal, hiring top talent has been an uphill task for the startup. In addition, supply chain issues are a major headache.
Further, as far as branding is concerned, the startup is currently exploring cost-effective strategies, all while resisting expensive celebrity endorsements or traditional media marketing.
While the startup’s steps are in the right direction, the fact that it is operating in a highly-competitive market cannot be denied. Further, the domain of footwear is overcrowded by brand loyalists, aka evangelists, posing a threat to new-age brands like Yoho. Finally, the startup’s strategy to go slow on its marketing and promotions may not bode well for it, as for a lifestyle brand investing in vanity metrics is a growth imperative.
[Edited by Shishir Parasher]
The post Can This D2C Brand Challenge Campus & RedTape’s Dominance In The Indian Footwear Market? appeared first on Inc42 Media.