Market Analysis for Footwear
Market Overview
Demand for footwear is met by both local production and imported shoes. In Malawi, there are five main players namely; Bata Shoe Company, Kabula Industrial Safety Specialists, Kitswear & Sales and Footwear Centre.
There is a high demand for industrial footwear (Safety shoes and Gumboots) since Malawi is an agrarian economy, with 30% contribution to GDP. Furthermore, the mining sector is expected to increase further by year 2016 when it will adopt mining as a complementary forex earner and is expected to contribute up to 20% to the GDP.
On the other hand the potential for Mauritian Dress and Casual shoes is rated to be low, although PEP Store found Manisa shoes to be of good quality with reasonable fob price. As in the case of textile and apparel market, the second hand shoe market plays an important role in Malawi impacting indirectly on the demand for dress and casual shoes.
Major factors that shall determine demand for industrial shoes are proximity to sourcing market and speed of delivery.
Market Size for the Import of Shoes
Malawi total shoes imports from the world 2008-2012.
Source: Trademap
As shown from the graph above, Malawi’s total shoes imports reached at USD 11.8 million in 2012 compared to USD 9.7 million in 2011, representing an increase of 22%.
Swot Analysis for Footwear Market
The market is competitive and already occupied by well established brands from China, South Africa, Zambia and Zimbabwe but Mauritian industrial footwear stand a good chance to appeal to importers looking for quality and willing to pay a premium. Mauritius operators should capitalise on the duty free access to reach corporate customers for industrial shoes.
Sourcing Markets
The main sourcing markets for Malawian footwear industry are China (80%), South Africa (10%) and Zimbabwe (3%).
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Source: Trademap, 2012
Demand Analysis – Key Importers
The major Malawian importers for Footwear can be segmented into:
Bata Shoe Company Ltd
Bata Shoe Company Limited in Malawi is part of worldwide Bata Shoe Organisation which is one of the leading footwear manufacturer and retailer. The company started its operations in Malawi in 1964. Bata Shoe (Malawi) presently has 31 retail shops located all over the country, 3 wholesale warehouses and a manufacturing plant.
A meeting was scheduled with Mr. George Mulenga, the Managing Director and Mr Grace Mvutho, the Senior Sales Executive of Bata Shoe Company Ltd to understand the market environment of the footwear sector in Malawi and to explore business opportunities for Mauritius’ industrial and formal shoes. During the course of the meeting, Mr. Mvutho stated that 60% of the company’s production accounts for the local market while the remaining 40% are imported from its sister company in Zambia. He further claimed that Bata Shoe Company Ltd holds a 25-30% market share in Malawi.
Pep Store
PEP is a South African subsidiary company based in Malawi. It offers a wide range of products including footwear. An interview was secured with the Logistics Manager, Mr. Wezi Joker’s Chilimira so as to present the samples from Mauritius. Mr. Chilimira claimed that footwear represents 30% of their product porfolio. He claimed that he is currently importing from China.
Kits Company
Kits Company is specialised in the distribution of safety and health equipment in the workplace. The company was contacted being interested to source safety shoes from Mauritius. Mr Kingsley Kamwendo, the Operations Manager of Kits Company said that his main clients are corporate firms and the government, mainly the army. He stated that his company deals with two types of consumer segments. The first segment will consider the price of product first followed by the quality while the second segment will be willing to spend more for higher quality and is interested in genuine leather. Mr. Kamwendo stated that he is currently importing from South Africa and China. He further stated that his company sold 5,000 pairs of safety shoes in 2012 and for the five months of 2013, they have already sold 2,800 pairs.
Kabula Industrial Safety Specialists (Kiss) Ltd
Kabula Industrial Safety Specialists (KISS) Ltd is involved in the distribution of industrial shoes and protective wear. The company currently imports from South Africa and Germany. Mr. Chris Gondwe, the Director of the company claimed that he used to import from China but eventually stopped as the quality was not reliable. He further stated that there is a huge demand for gumboots and the company normally buys 1,000 pairs per shipment. He said that the quality of the Mauritian shoes will depend on its durability but the industrial shoes look nice. Mr. Gondwe proposed that Mauritian suppliers can send him samples (around five pairs of safety shoes) for a trial purpose in order to assess the resilience of the shoes with regards to the Malawian environment. He has also shown a keen interest to import protective wear such as helmet and gloves if the prices are affordable.