Footwear major Bata is working on a strategic shift in its manufacturing model, sharply reducing in-house production while consolidating its outsourcing base to enhance efficiency, quality control and innovation leverage.
Managing Director and Chief Executive Officer Gunjan Shah said the company will continue tapering in-house manufacturing contribution, which has already declined from 30–35% four years ago to the mid-teens currently. The share is expected to reduce further as Bata strengthens its contract manufacturing ecosystem.
The strategy, Shah explained, is principle-driven rather than cost-led. Production involving intellectual property, automation, advanced technology and high capital intensity with lower labour dependency will remain in-house. The rest of the portfolio will increasingly be executed through contract manufacturers.
Alongside this shift, Bata is aggressively consolidating its vendor base. The company has reduced contract manufacturing partners from over 120 three years ago to about 60 currently, with an eventual goal of working with just 15 strategic partners. This rationalisation is aimed at reducing lead times, improving supply agility and, more importantly, cross-leveraging best practices, innovation capabilities and product development expertise across partners, he said at the latest analysts conference call.
“The larger benefit is building an extended manufacturing arm with stronger quality control and shared innovation platforms,” Shah indicated, adding that the transformation aligns with earlier workforce rationalisation and capital allocation decisions.
Operational Momentum Returns
The strategic recalibration comes at a time Bata reports early signs of demand revival. The company posted turnover-led growth of around 3% during the quarter, a welcome return to growth after a period of subdued performance.
The recovery has been supported by the scaled implementation of its zero-based merchandising project, now live across 400 stores, alongside a sustained increase in marketing investments. This marks the second consecutive quarter of double-digit growth in marketing spend, with visible impact on store performance metrics.
Operational metrics have shown tangible improvement, including better inventory turns, enhanced product availability and faster resupply turnaround times. A year-long effort to rationalise agent inventory has also significantly improved product freshness levels across channels.
Growth was broad-based across price points, with lower-priced offerings showing encouraging traction. From a brand standpoint, Hush Puppies, Power and Floatz delivered disproportionately stronger growth during the quarter.
The previously rationalised corner stores channel, which had been paused for restructuring, has staged a meaningful turnaround and is now delivering both growth and strong margin performance.
Expanding Footprint and Digital Push
Bata’s franchise network continues to expand and is poised to cross the 2,000-store milestone this quarter. Its Institutional & Distribution (I&D) business has also scaled rapidly, with KRO network reach doubling over the past year to over 2,000 touchpoints.
E-commerce channels , including marketplaces, Bata’s own website and omni-channel platforms — registered strong growth. The recently launched Bata app has gained traction quickly, contributing nearly 14% of the company’s direct-to-consumer business within six months of launch.
Looking ahead, Shah indicated that further strategic actions are lined up over the coming quarters, particularly around reimagining the product funnel , a pillar the company sees as critical to sustaining growth momentum.
With a leaner manufacturing model, sharper vendor consolidation and strengthening channel execution, Bata India is positioning itself for improved agility, margin resilience and scalable growth in the quarters ahead.