It’s still not easy to do business in India: David Weinberg, COO Skechers

0
16
It is not easy to do business in India, a top executive at US footwear brand Skechers Inc said, hinting that regulatory changes and steep taxation favour local production.

“The ease of (doing) business has improved, but it’s not easy. It is an economy that wants to protect its place in the world from anything outside and try to build it inside, which is very, very difficult,” David Weinberg, global chief operating officer at Skechers told ET. “Some of the rules, because they change so quickly in terms of political environment and tariffs and taxes, can make it difficult.”

The government, in a push to encourage domestic manufacturing, has reportedly identified over 350 “non-essential” imports — ranging from toys and textile products to footwear and electronic goods — where it may hike customs duty and do a quality control on orders to reduce shipments.

The California-based brand sells sports, casual as well as formal shoes and is the third-largest global footwear brand after Nike and Adidas AG. It hopes to generate $1 billion in sales from India.

The company, which already makes apparel in India, said it was doing due diligence to make footwear in the country, not just for local consumption but also for global sourcing needs.

“Nobody makes it easy today, especially to go to a specific country, unless it’s something unique. And, what we offer is our unique vision of footwear, but it is still footwear,” Weinberg added.

The American brand, which entered the country in 2012 through a joint venture with Kishore Biyani-led Future Group, more than doubled store count to 267 over the past two years. In January, it bought its entire 49% stake in the JV for $82.5 million to make the firm a wholly owned subsidiary.

With a population of 1.3 billion people, India is one of the fastest-growing and largest international markets for Skechers — it sold 2.7 million pairs of shoes in 2018, a volume growth of over 80%.

Rival brands Reebok, Adidas, Nike and Puma have been around for more than two decades in India and are much bigger in size, by virtue of pushing their wares partnering cricket and other sporting activities.

Skechers, founded in 1992, has been positioning itself as a comfortable lifestyle and regular athletic wear brand at a relatively lower price tag.

“We came late to every marketplace including the United States. What we do differently is, we have built a very strong balance sheet. We are willing to invest from that balance sheet, it gives us confidence in investing at a much faster pace than our competition,” said Weinberg.

India is seeing a rising sports culture, more sports clubs across the country and increased emphasis on fitness.

Over the past few years, the country has also demonstrated an increasing appetite for non-cricket sports, such as kabaddi, soccer, volleyball, hockey and badminton. It now hosts professional leagues in most of these sporting disciplines, drawing participants from across the globe.