One of many world’s largest footwear producers, Yue Yuen Industrial Holdings Ltd., has introduced its intention to take a position Rs 2,000 crore in India over the subsequent 5 years. The corporate, which makes footwear for international manufacturers like Nike and Adidas, plans to arrange a producing facility in Tamil Nadu and create 10,000 jobs.
The transfer is a part of the corporate’s technique to diversify its manufacturing base and faucet into the rising demand for athletic and informal footwear in India. In line with a report by Euromonitor Worldwide, the Indian footwear market is anticipated to develop at a compound annual progress charge (CAGR) of 9.6% from 2020 to 2025, reaching Rs 59,373 crore by 2025. The report additionally states that athletic footwear is the fastest-growing phase of the market at a CAGR of 13.3%.
What are the benefits?
By establishing an workplace in India, Yue Yuen hopes to profit from decrease labor prices, favorable authorities insurance policies and proximity to a big shopper base. The corporate additionally needs to leverage India’s strengths in leather-based and textile manufacturing and its expert workforce. “India is a strategic marketplace for us and we’re dedicated to contributing to its financial growth and creating job alternatives,” mentioned Andy Lee, Chairman of Yue Yuen.
What are the challenges?
Nonetheless, the corporate additionally faces some challenges when getting into the Indian market. One is competitors from native gamers corresponding to Bata, Relaxo and Paragon, which have robust presence and model loyalty amongst Indian shoppers. One other problem are infrastructure and logistics points that may have an effect on the effectivity and high quality of manufacturing. As well as, the corporate should adjust to the environmental and social requirements demanded by its international clients.