--By TC Correspondent
Over the years, the number of buyers for footwear products manufactured in Nepal has registered a healthy growth, observed industry insiders. They attribute this development to advancements in manufacturing technology, delivery of quality products and meeting consumer expectations.
The domestic market is witnessing a change in the buying pattern of customers in recent times. Slowly but surely, more number of people are beginning to get used to different brands of shoes produced locally, in an apparent departure from their love for foreign branded products earlier. “We had to convince hard to sell our products to the customers a few years ago. However, things stand changed today as they have started to trust Nepal-made shoes which have made our job easier,” said a salesperson at a leading shoes store.
The domestic footwear industries that manufactured mostly leather products for long have also started to produce sports and casual shoes among others. Manufacturers opined that the buyers’ increasing confidence in them encouraged them to diversify their product portfolio. “We are about to install a new plant to manufacture ladies footwear and also looking to expand the product line-up in the casual and sports series,” said a leading manufacturer.
Retailers too believed that consumers who preferred foreign brands earlier are increasingly shifting towards ‘Made in Nepal’ products.
Shikhar Shoes claims the company’s production output is close to 300,000 pairs of shoes annually. The company said that the domestic market consumes all that it manufactures. The company is planning to roll out a new premium brand targeting high-end customers in the near future. However, it depends on the results of a feasibility study it is carrying out. Products from Shikhar Shoes are priced in the range of Rs 350 to Rs 4,000. One of the largest manufacturers in the domestic market, business for Shikhar Shoes has been overwhelming in the past couple of years as it has been able to deliver quality products at affordable prices. The company has installed a new technology for the first time in Nepal called the ‘Conveyor System’ that enables production of large quantity while reducing time for manufacturing.
Base Footwear, another prominent player in the domestic market that manufactures BF Dear Hill footwear products, has been witnessing huge success. A manager at the company said, “Most multi-brand retail outlets in the country now proudly feature domestic footwear products.” He claimed that the company’s annual production is around 200,000 pairs. Its products are in the price range of Rs 450 to Rs 3,500. Base Footwear manufactures products ranging from school and college shoes to party shoes, casual shoes and sports shoes. The company has recently started manufacturing football boots as well. BF Dear Hill, the first Nepali footwear brand to receive international standard certification 9001:2008, is also enjoying good business by luring customers with its fashionable, comfortable and durable products.
Goldstar has become a household name in Nepal. This brand was launched after a studied research of the market. Foot specialists and experts working with various shoe companies were brought as consultants to design the product and draw up a business plan. Experts were unanimous in their beliefs that given the often-difficult terrain in most parts of Nepal, a shoe had to be sturdy, light and cheap. The company believes that there has been a massive shift in the acceptance of the domestic products, which is a positive sign for the industry. It claims that its annual output of over eight million pairs of shoes is not adequate to meet the demand from the market. While 70 per cent of Goldstar shoes are exported to India, the rest is sold in the domestic market.” Goldstar aims to increase its export potential to a number of countries and is a proud recipient of the ‘Best Exporter Award’.
Despite the reasonable penetration in the domestic footwear market, stakeholders said that various problems had prevented the domestic footwear industry from making faster progress. They pointed out issues like unfair customs duty on raw materials and unavailability of skilled labour among others. Domestically, manufactured products have the potential to outshine foreign products if the government provides them appropriate support, they said.
The flooding of the market with low-quality and cheap Chinese products is wearing out the scope for the Nepali footwear industry. Stakeholders claimed this is primarily due to the porous border and lack of strong policies.
“Because of unfair customs duty — high on raw materials and low on shoe import — production of Nepali shoes turn out to be more expensive. This has compelled customers to think twice before buying home manufactured shoes,” said an official of the Leather Footwear and Goods Manufacturers’ Association of Nepal (LFGMAN). Around 70 per cent of raw materials for shoes made in Nepal are imported from India, China, Thailand and Taiwan.
Industrialists claimed that apart from the open border and duplicate products, labour problem has hit the industry hard. Manufacturers said that they face threats from the labours and their respective trade unions regularly. While the industry is growing steadily despite the workforce crisis, such threats certainly hamper the sector.
Withstanding a number of challenges, the Nepali footwear industry is still emerging as a promising business sector — growing at an annual rate of 15 per cent. Latest fashionable designs coupled with fine craftsmanship have led to domestic shoes starting to offer an alternative for international brands in the market that cost way expensive. Besides, of course, some Nepali manufacturers have started to explore the potential of exporting ‘Made in Nepal’ products to the international market.
The customers’ attraction towards Nepali footwear products is on the rise and the market has been consistently registering increase in demand. This has encouraged existing manufacturers to maintain quality while the number of new manufacturers too has increased significantly. There are 500 shoe manufacturers in the country and 10 medium scale footwear industries. According to LFGMAN, Nepali footwear products account for 60 per cent of the total shoe market in the country.
Even though the economy is experiencing a difficult phase currently, local shoe manufacturers see a bright future for the industry provided they receive adequate support and a good platform to market their products.