India is becoming a favorable market for fashion retailers. Factors like increase in income levels, improvement in consumer behavior, increase in demand from Tier 3, Tier 4 cities and rural markets, increase in youth spending led to growth in the Indian footwear industry.
India’s retail market size was ₹55 trillion in 2020, growing at a CAGR of 5% over the last 4 years. According to industry economists, fashionable footwear will contribute more than 25% of the market by 2025. The global footwear market is valued at over USD 220 billion. India has become a focal point for fashion and lifestyle businesses over the years due to rapidly increasing disposable income.
Although India is the second largest footwear producer, it is still under-penetrated with per capita consumption of around 1.7 pairs per year compared to the global average of around 3 pairs.
The Indian footwear industry was seriously hit by the COVID-19 pandemic due to the closure of outlets, preference for work-from-home, and change in consumer behavior towards discretionary spending.
Consumers were apprehensive about stepping out of their homes even after the lockdown was lifted, leading to a 14% decline in the size of the retail market in 2020.
The increasing penetration of smartphones and internet connectivity is further propelling footwear sales as e-commerce is the fastest-growing channel in India and is expected to reach USD 350 billion by 2030.
According to industry economists, the retail market is expected to grow at a CAGR of 11% to reach Rs 91 trillion by 2025.