Moreover, with improvement in living standards across the globe resulting in wealth

generation and increased purchasing power, the demand for fashion and products made from
natural materials including leather has increased, leading to high trade volumes, better
revenues and increased employment opportunities.
While leading companies such as Nike, Adidas, Bata, Puma, Aldo, etc. have significant
market share, they are expected to face stiff competition in the coming years. Therefore,
mergers & acquisitions and joint ventures with local players to expand product portfolios
have gained prominence. Moreover, local producers in developing countries are focusing on
reducing their cost of production and increasing profitability for sustainability.
Men's shoes are generally not subject to rapid fashion changes; however, this is not the case
with women footwear which gets discarded before being worn out. With one of the key
features of leather being durability, women footwear, therefore, may not be required to be
made of leather. As a result, footwear made of other materials is expected to gain more
prominence, especially in the Indian context, where the percentage of market captured by
women footwear has constantly been increasing over the years.
From a manufacturing technology perspective, seamless integration of functional
analysis/biomechanics, material science and comfort related parameters in CAD/CAM
software is expected. In addition, augmentation of AR/VR to provide a better customer
experience is already underway.
There has also been an increased focus on smart and tech-enabled footwear. This has led to
an increase in development of new materials and processes that are allowing production of
the next generation of footwear with functional behavior resulting in development of
innovative materials and processes to enable this. This along with increased awareness
through new multimedia channels has opened a number of options for consumers compelling
manufacturers to focus on design and development of footwear which are not only
comfortable and trendy but also sustainable and equipped with modern technologies.
The focus on innovation in the shoe sector has evolved in a slow but efficient way, driven by
the changing demands of the customers at retail. This has acted as a trigger for more creative
innovations of materials and methods of construction to meet the appropriate demands. A
recent example of this evolution in market demand for segmentation is the development of
shoes, labelled by the public, as “Sports” footwear. These were originally dominated by big
multinational brands, whose success was based on new styling linked to material and process
innovation linked to product performance in the market.
Interestingly this category of footwear has also moved from purely footwear to be worn for
sport to a fashion item of footwear linked to similarly innovative clothing covering all age
groups. This demand has released opportunity for new brands to appear to satisfy global
demand. 25 years ago, this segment of the “Sports Shoes” market was dominated by the “big
3” – NIKE, ADIDAS, PUMA. Now this segment has attracted at least a further 20
established brands with global presence and billion-dollar sales. India has developed its own
clusters making “sports shoes” using some of the processes developed by the big
international brands.
3D printing and smart shoes offer the individualized experience through at-home printing or
for printing at a local store and personalized feedback, respectively.
The footwear sector is undergoing a transformative phase wherein in addition to design and
comfort, features on aspects related to functionality are also gaining prominence in the minds
of the consumer. We believe this to be an important element which will redefine the industry
in the coming years the same way smartphones and especially smartwatches have done.
Major innovations by key players
Existing players – • Adidas - focusing on foot biomechanics • Puma (with MIT Design Lab) -
developing biologically active shoes which adapt to the wearer • Apple - products that can
detect damage to feet.
Emerging player – • Xiaomi (primarily a smartphone maker) with its MiJia smart shoes that
capture speed, distance, weight, etc
. • Digitsole offering personalized feedback to analyze health, fatigue, posture, etc.
• Zhor tech’s shoes - shoes for construction workers which count steps, detect fatigue and
evaluate posture, alert supervisors in case of accidents, etc.
• Lechal footwear - designed for visually impaired.
KEY POINTS
• Jointly exhibiting Industry 4.0 for the footwear sector
• Research & Development & Innovation (R&D&I) in sustainable materials/components for
footwear
• Customized training programs in Orthopedic footwear
R&D in digital manufacturing, additive manufacturing, nanotechnology, leather and textiles,
chemical substances in footwear.
• R&D in model and process optimization, Biomechanics/optimized fit/wearing comfort

CHALLENGES
some of the generic challenges faced by traditional footwear clusters include - • Competition
from established footwear brands which have set standards and quality benchmarks • Lack of
availability of finance to run the business as credit system is prevalent • Marketing of
footwears produced as low price is obtained for selling the footwear in the local market •
Raw material availability • Low awareness about government schemes • Occupational Safety
& Health concerns as working conditions are below international standards Some of the
major challenges faced by modern footwear clusters are – • Competition from international
footwear clusters in Vietnam, China, Germany, Portugal • Lack of access to latest
technologies as compared to that of in international footwear clusters • Lack of R&D in
various aspects of footwear manufacturing • ICT promotion is an area that lags behind •
Tariff rates and trade barriers are a negative impact • Low protection of intellectual property

4 major areas which require support from a technology and overall infrastructure
standpoint
. • Leveraging the latest technological advances in the manufacturing value chain - Treatment
of raw material for leather products in tanning operations - There are challenges across the
value chain and treatment of the raw material in tanning operations leads to sub optimal
quality and usage of processes detrimental to the environment. We believe this is a critical
area to address since it not only impacts the footwear sector but the overall leather sector.
• Encourage upward movement within the leather footwear value chain - Within the leather
footwear sector, there is considerable infrastructure, although elementary at the cluster level,
to support it. However, self-design, production, branding and distribution account for a very
small part of Indian leather footwear sector and need to be increased.
• Create supporting infrastructure for non-leather footwear products manufacturing - Despite
the growing demand for non-leather footwear (estimated at ~30% of total footwear
production in Agra20), there is limited infrastructure to support it, leaving the cluster
unprepared to deal with future trends. Also, the sector needs to be geared towards the rising
demand for women’s footwear (highlighted above)
• Incorporating technology within the footwear itself (Smart shoes) - As highlighted earlier,
the market for smart shoes is expected to expand significantly, however, the Indian footwear
sector is currently not ideally positioned to participate in the growth.

Recommendations
In cognizance of the identified challenges, the following interventions are proposed to
prepare the Indian footwear sector for future challenges –
• Incorporating technology within footwear
• Encourage upward movement within the leather footwear value chain
• Recommended technologies in footwear manufacturing
• Create supporting infrastructure for non-leather footwear products manufacturing
• Leveraging the latest technological advances in the manufacturing value chain
• Indian leather & footwear sector- to enhance its competitiveness
• TC as an enabler for innovation • Skill development for small unorganized sector
• Improvement on performance testing and compliance testing facilities
IMPACT OF COVID
COVID-19 has challenged the footwear sector to review the way it designs, makes, and sells
its products. There is a dire need to work upon the below factors: • Reduce cost - by using
reliable fast data on real costs of prime materials and labor • Reduce time - by speeding up
the development of new products • Reduce waste - by recycling, reduce inefficient operations
to produce more effectively in all sections • Reduce stock levels - by finding alternative ways
to reach markets and customers through digital channels
CONCLUSION
Costing is an inevitable function when building product ranges, analyzing competitiveness,
establishing a pricing policy, evaluating products (styles) manufactured and marketed in the
past (e.g. during the last season, year). This activity may look like part of the financial control
of the business, in reality it is very closely related to technical aspects of the manufacturing
process. No producer entering into (free) markets can afford to base his decisions with regard
to product development and sale on guesses or rough estimates. Success of shoe (and other
leather-based products) manufacturers in developing countries depends on how careful they
are in reducing their production costs and in selecting feasible styles for sales.
Indian footwear sector must be capable to supply its own large domestic market with cheaper
but younger, fashionable shoes in higher volumes. India’s knowledge and expertise in the
domestic footwear sector has developed a narrow vision due to its dependence on
“traditional” leather shoes. It now needs the opportunity to target and introduce other
technologies using non leather materials, coupled with the advantage of seeing rising labour
costs in other competing International manufacturing hubs like China. This puts India in a
strong position to increase its share firstly in its own domestic footwear market. Once it has
cemented these changes as standard practice, it can then exploit these new technologies to
overseas buyers.