What’s common to Tibetan monks, American nurses, toddler, tourists on the beach and celebrity chef Mario Batali? They all wear flat, often blindingly bright rubber/plastic slip-on shoes punctured with holes. In fact, Batali is so fond of his clogs (bright orange and he wears them *everywhere*) that he ordered 200 pairs when he heard Crocs planned to discontinue them in his favourite colour — that’s in addition to the 30-odd pairs he already has. No one in India is quite that fond of Crocs, but Nissan Joseph, head of Crocs India, is hoping to get more and more customers interested in slipping into a pair of chunky clogs.
But not just anybody. For a company that’s named after a reptile and makes footwear that inspires hate websites, has made it to Time’s list of worst inventions and been called the ugliest shoes ever, Crocs is unapologetically premium, with prices for its fully-imported range going from ₹1,200 to ₹6,000. “If there are 25 million consumers in India, I am interested in only 3 million,” says Joseph. So far, most of that subset has been buying its Crocs in the metros — Crocs has 35 exclusive stores and is also available in 400 multi-brand outlets (MBOs) such as Lifestyle, Reliance Footsteps and Metro, an increase of eight and 100, respectively, over last year. Now, though, the American footwear brand is opening up to the idea of reaching deeper into India, to cities such as Nagpur, Guwahati and Gangtok. This year, the company will add 10-12 more stores and 100 more MBOs, says Joseph, and most of these will be in tier 1 and 2 cities.
The second part of the strategy is to partner with key e-commerce retailers. “They give access to 26,000 zipcodes across India,” points out Joseph. Currently, the online sales channel brings in negligible revenue, but the aim is to take this up to double digits soon. Here, too, Crocs is determined to maintain its plastic-but-posh positioning. It has pulled its products out of over several e-retail sites since they were offering steep discounts on retail prices. “We are very careful that they don’t use our brand online as a discount brand to acquire customers. That demolishes brand equity,” says Joseph. Now, Crocs will have exclusive tie-ups with only Amazon and Jabong, which will offer the complete range of 100 Crocs styles (no, it doesn’t sell just clogs) at prices similar to what the stores offer.
Not surprisingly, then, there’s no question of a differential pricing strategy for non-metro markets. “The time for that is not yet. When you go that round [reducing prices], you still have to preserve what makes you good and for Crocs, that is Croslite. If I took Croslite away to lower the price, I don’t have a reason to exist,” Joseph points out. Croslite is the proprietary foam resin from which all Crocs products are made. The closed-cell resin keeps out dirt and water and is resilient to compression. Crocs’ patent on it means it has no direct competition but fake Crocs are available everywhere, from street vendors to big stores.
Learning curve
The easy availability of croc-offs and the high pricing of the originals has meant Crocs hasn’t grown all that fast in India. The company was founded in Colorado in 2002 after acquiring the Croslite technology from a Quebec-based company. In a few short years, Crocs was an international rage (or fashion disaster run amok, depending on whom you asked) and it meandered into India in 2007 through a joint venture with Chogori India Retail (the Indian operation is now a franchise). Joseph agrees that Crocs’ progress here could have been faster. “We made mistakes in the Indian market, experimenting with style assortments and a developed-for-India product that didn’t work. We also tried to reach too many MBOs initially,” he says.
The biggest learning has been not to do everything itself. Unlike in other markets, in India, Crocs has partners for distribution, logistics and retail. The competencies and relationships required to run a store in Rajasthan are different from those needed in Tamil Nadu, explains Joseph. “As a brand, we could spend years building those competencies or we could find people with such competencies.” The difference is showing in the books, he adds: sales have doubled in the past two years and growth in Q4CY13 was 40% more than the previous quarter. Crocs doesn’t share country-specific numbers, but annualised retail sales in 2013 was over ₹100 crore, according to industry insiders. “We manage product, segmentation and marketing and then coordinate the logistics. So we truly are brand managers in India,” Joseph adds.
Not that the brand managers have been pushing the brand much in the past seven years. Crocs doesn’t advertise in India at all, although it is fairly active on social media. Entering smaller cities, though, seems to call for a shift in marketing strategy as well, so actor Yami Gautam has been roped in as brand ambassador — the first campaign should break in late May or early June.
Will presence and a star endorsement be enough to draw customers from tier 2 cities? Mukhtarul Ameen, chairman of Superhouse group, which makes Lee Cooper shoes, thinks it might work. “We are such a large country that even in a tier 2 city such as Kanpur, Crocs may find customers. The high price also means higher margins to sustain your business.”
