‘Lower price points gaining traction after GST cuts,’ Gunjan Shah MD & CEO Bata India
Bata India sees demand at the belly of the market bouncing back after the GST reduction on products up to Rs 2,500 from the earlier 12% to 5%. MD & CEO Gunjan Shah tells Viveat Susan Pinto that he sees a structural demand correction in the near term due to the GST cuts. The footwear retailer, which has over 1,970 stores, has also put in place a three-pronged strategy to drive growth. Excerpts:
While Bata’s Q2 earnings were impacted by GST-related disruption, what has been the scenario post September 22? How much of a rebound are you seeing in sales?
We have seen a noticeable uptick in sales after September 22. Demand at lower price points, which was sluggish over the last two years, has been gaining traction with the GST cuts. We were also quick to pass on the GST benefits to consumers across 80% of our product portfolio, which is priced under Rs 2,500. Almost 40% of this portfolio is priced under Rs 1,000. So, the GST cuts have made footwear even more affordable at lower price points. The shift from unorganised to organised footwear will also accelerate with the GST reforms.
You’ve charted a turnaround plan for Bata. What is it about?
The transformation plan is predicated on three pillars — fresh products, store revamps and supply chain push. Product refresh is based on consumer behaviour and insights. For instance, we see office sneakers as an evolving space and a big focus area. Casual footwear is another big area of focus. And the third piece is about hybrid collections. Store revamps are led by zero-based merchandising, where we are aiming to keep our inventory pipeline tight. We have already revamped 250 stores and aim to complete 400 by the December quarter of FY26 and 800 by mid-FY27. On supply chain, we are looking to make it more agile, so that we can respond faster to consumer needs.
