Daybreak - Bata's premium problem in a Prada-priced world

Episode Date: June 26, 2025

While Prada walks the ramp in Kolhapuris, here in India, Bata, the brand that once defined middle-class respectability, can barely find its footing. Bata which was once a household name, a back-to-school essential, a symbol of quality without fuss, is now finding itself squeezed. Too expensive for the value-hunting Zudio crowd and not fancy enough for the Birkenstock and Crocs-wearing folks.Which is why Sandeep Kataria’s recent resignation as global CEO feels like a full circle moment. After all, it was under his leadership that Bata tried to pivot from utility to aspiration. But was it ever really able to shake off its image as the brand of the “everyman”? And more importantly, should it have even tried?Here’s the deeper question: What do we, the Indian middle class, aspire to anymore? Is luxury about heritage and craftsmanship? Or just a European label and a five-digit price tag?Tune in. Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me, my interruptions, my analogies, and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too. It's for a special announcement. For the last few months, I and Sita Raman Ganeshan, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

We want to tell the secret sauce stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture, how they manage to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing, and extensive post-production.

Sita and I are still reeling from the intensity of our first studio recording. Intermission launches on March 23rd. To get alert, as soon as we release our first studio. episode, please follow intermission on Spotify and Apple podcast or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode. You know you're living in late stage capitalism when Prada tries to sell the good old 500-ru-cili kola buri chapples for 1.2 lakh rupees. They debuted at the Milan Fashion Week a few days ago with absolutely no context, an absolutely no context, an absolutely

Absolutely no credit. Just models wearing the iconic Indian sandals on the runway. You know, exotic but make it Italian. And this is fashion's long history of looking east for inspiration and then forgetting to look back. But while Prada walks the ramp in Kolapuris, here in India, Bata, the brand that once defined middle class respectability, can barely find its footing.

Bata was once a household name. It was a back-to-school essentially. a symbol of quality without fuss. But now, it's finding itself squeezed. Somehow it's too expensive for the value-hunting Zudio crowd. And at the same time, it just isn't fancy enough for the Birkenstock crock-wearing folks. Which is why Sandeep Kataria's recent resignation

as the global CEO of Bata feels like a full-circle moment. After all, it was under his leadership that Bata tried to pivot from utility to aspiration. But was it ever really able to shake off its image as a brand of the everyman? And more importantly, should it have even tried? Because here's the deeper question. What do we, the Indian middle class, aspire to anymore? Is luxury about heritage and craftsmanship?

Or just a European label and a five-digit price tag? Hello and welcome to Daybreak, a business podcast from the Kent. I'm your host Nick Dha. And I'm Rahel. And we don't usually chase the news cycle, but today we are. Every day of the week, we come to you with one new story that is worth understanding and worth your time. Today is Friday, the 27th of June. Bata's been in a bit of a funk for a while now.

And then earlier this month, things got worse. Its CEO, Sandeep Kataria, as we mentioned earlier, decided to step down. Now, Kataria was not just another executive. He ran Bata India for three years, turned the business around, and he ran Bata India. and even got promoted to the lead of the global parent company in 2020. Under him, Bata's India business thrived. In fact, its stock price doubled in value despite the impact of the pandemic. But somewhere along the way, the magic wore off.

And it showed up in the stock market. Bata's share price, which had surged during Kataria's early years, started losing steam. It's down 10% of the past five years. The Nifty 500 index has jumped 106. 70% in the same period. Now, you must be probably wondering what changed. The simple answer is, we did. Before we get into that, here's a quick history lesson.

Now, this surprises a lot of people, but here's the thing. Bata, despite being such a big part of our collective cultural memory, isn't actually Indian. It was founded more than a century ago in a small town called Zlin in then Czechoslovakia by a shoemaker named Thomas Bata. It's currently headquartered in Switzerland. But for more than a century, India has been one of its largest markets. It was the default choice for middle-class families everywhere. It was the place that you went to for your school shoes,

for your fancy going-out shoes, for formal shoes, for that first job. You know, Bata had you covered. It was affordable, reliable, and it was everywhere. But somewhere down the line, like most brands in this segment, Bata realised that just being the safe choice was not. Not enough. Like every mass market consumer company, it often talks about selling more quote-unquote premium products, perhaps as a way to break out of its rut.

For eight consecutive quarters, its sales have barely grown. Its quarterly profits now are among its lowest since the pandemic. But for a brand that is so fundamentally middle-class, dipping its stores into premiumization is no joke. It's not easy. You're not just asking people to pay more. for shoes, you're asking them to see you differently, to unlearn decades of muscle memory that said Bata means affordable, Bata means practical.

So now the brand is caught in a rather tricky situation. It's trying to be aspirational and sell to customers higher in the pyramid, but they just aren't taking the bait. Meanwhile, brands like Zudio and Mishu have entered the picture with dirty prices and never-ending variety. They've redefined value like only Bata could until about two decades. decades ago. So essentially, it can't look up or down anymore. And that's a pretty terrifying place to be in. Meanwhile, its main competitor, Metro brands, navigated the premiumization journey pretty seamlessly. Of course, it is important to note that its market value stands at about nearly $4 billion, which is more than double of barters. And now Metro shoes are

priced on average at about $2,500, and that is roughly 1.5 times more than butter. In the last two years, the revenue contribution of Metro's products that cost more than $3,000 has risen sharply from 46% to 55% today. That's also a product of its target demographic. You see, Metro's high-income consumers are less sensitive to price rises than Bata's, so they tighten their purse strings later in times of economic downturn. Little wonder then that Bata is trading at 65 times its profits over the last 12 months, while Metro is valued at 93 times.

Another thing that Metro has going for it is the fact that it's able to sell over 90% of its offerings at full price. An analyst told the Ken that the number is close to 70% for Bata. Now, call it luck or call it foresight, but Metro made another smart bet early on. It became the India franchisee for Crocs. Yes, those bulky, arguably ugly rubber shoes. But post-covert,

Crocs had a Birkenstock-style resurgence. Comfort became cool and Metro was perfectly positioned to cash in on that trend. In fact, part of that Big Bata remake was adapting its rain-proof, sturdy floats collection to prominently feature more crock-like mules and slides. And Bata's attempts to remake itself extend to decluttering its stores and offering fewer price points to choose from. But neither shoppers nor investors are playing ball yet. Today's shopper isn't just looking for functional footwear.

They're chasing brands that signal identity, taste, sometimes even status. And they're spoiled for choice. From D to C upstarts to global labels setting up shop in India. So, yes, Bata tried to move up the ladder from being practical and reliable to becoming aspirational. But maybe the bigger question is not whether it's succeeded. It is whether it should have even tried. Because here's the thing. The customer has changed fundamentally.

And we will be talking more about this in the next segment. So Rahel, here we are. Bata, the brand that helped the entire country to put its best foot forward is struggling to sell shoes to the very people that it once defined. Right. And then you have Prada, right? This luxury house that probably couldn't place Kolapur on a map. Right?

That's now selling a version of the Kolapuri chappel for the. over one-lack rupees. It's honestly such a perfect example of, you know, the strange world that we've built

for ourselves, a sandal that has been made by Indian artisans for generations, passed down through families sold in, you know, dusty bazaars

for like, what, 500 rupees? Suddenly now it's become high fashion and completely divorced from its roots and rebranded

by this European fashion house. And the irony cuts even deeper when you realise that it's actually not the chapal that Prada is selling, right? It's this illusion that it's exclusive and rare that's selling. But in reality, millions of Indians have been wearing a version of these exact shoes for centuries. Right? On the streets, on buses and schools at weddings, every single day.

Actually, Snigda, can you tell me about what comes to your mind when you think Bata? Oh my God. For me, you know, I remember I have memories with my grandkids. father going to that one tiny barter store, which was in my hometown called Kershong, to buy shoes. Every time I wanted to buy shoes, when I was younger, my nana would just take me there, like no questions. But later, you know, when I became a teenager, I wanted to be more fashionable. So then I started going to all these small Tibetan stores that we have and they sell Chinese stuff.

Yeah. Right. But obviously now I understand the irony of it all, right? The very brand that actually brought quality, accessibility and what, decades of design? evolution to Indians, now it can't make a premium line stick. And why? Probably because of people like me. And me. Yeah. Because, you know, in this current moment that we live in like foreign still sells as aspiration. Right. It's like we've been conditioned to believe that our own culture is only valuable when someone else, right? Preferably someone from the West tells us it is.

Yeah. And also charges us six figures for it. Exactly. It's not just about fashion. It's about this deep cultural amnesia, we forget our own value, our own design legacy until it returns to us with a different accent and, you know, this luxury markup. Yeah. And also, you know, you have to ask, what does it say? What does that say about our aspiration today? Like, we can't celebrate Kolapuris on a craftsman's foot in like Sangli, right, in Maharasia. That's close to Kolapur. But we'll happily be posting unboxing reels on Instagram the moment we get like some fancy product box. Man.

Honestly, it makes me think that the true cultural loss isn't just an appropriation. It's in what we forget to value while, you know, chasing this dream that someone else is selling us. Yeah. So, I mean, to conclude, but our struggle is not just about shoes. You know, it's about chasing this idea of premium that has been shaped by Western taste. Also trying to serve the middle class at the same time whose aspirations are shifting, you know, every single time there's a change in global trends.

Who knows tomorrow we'll see Kolapuri's with Labuboos hooked on to them. Oh my God, that'll be the day. Daybreak is produced from the newsroom of the Ken, India's first subscriber-focused business news platform. What you're listening to is just a small sample of our subscriber-only offerings. A full subscription unlocks daily long-form feature stories, newsletters, podcast extras. Head to the ken.com and click on the red subscribe button on the top of the Ken website.

Today's episode was hosted and produced by Rahal Philippos and I, Sinkda Sharma, and it was edited by Rajiv Sien.