Footware Industry

Industry Overview

The Footwear Industry in Bangladesh has started since the colonial era, although its modernization took place only in the late 1980s. Bata Company established its manufacturing plant at Tongi in 1962.

The degree of vertical integration in the industry is very high because most of the footwear manufactures have their wholesale and retail channel. Therefore, the local market is dominated by small-scale retail manufacturers, only the organized retail manufacturer and distributor such as Bata (22%) and Apex Adelchi (6%) have sizeable market shares. Among the major exporters are Apex, Jennys, Landmark, Leatherex, Bay, etc. The local footwear industry is experiencing an annual growth rate of 21% annually.

The footwear sector has earned $335.51 million in export during the just concluded fiscal year (FY) 2011-12 against $297.8 million of a year ago, Export Promotion Bureau (EPB) data revealed, recording a growth of 12.67% and currently, the local companies make leather footwear worth around Tk 17 billion yearly, of which 40 to 45 per cent products are meant for shipment due to expansion of local companies and their continuous growth.

Classification of firms according to the four different roles they might play

The firms of the footwear sector of Bangladesh can be classified into four different categories according to their roles about their target market: leader, challenger, follower or nicher.

Market leader

The market leader Bata Company Ltd. has captured about 22% of market share. It has a huge number of outlets all over the country, which shows the company is more customers centric. Bata wants to make the shopping most convenient in terms of distribution. Therefore, it has huge influence in price changing, new product and promotions.

Market Challenger

Apex Adelchi is the second largest company with about 6% market share in the local retail footwear market. The company serves the market through 120 retail outlets called...