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Gajendra OSG

Gajendra OSG

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Mexican Shoe Market presentation
Mexican Shoe Market presentation

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Published by: Gajendra Singh on Mar 13, 2013
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Market Research report for Mexican Shoe Market/Emyco

Gajendra Sisodia GSO

3. micro and small companies account for the bulk of enterprises in operation (roughly 89%) and employ some 600.mx/english/11-2012/businessTips/index.000 footwear manufacturers in Mexico.300 of which are located in the state of Guanajuato Source: http://negocios.000 people •There are approximately 8.promexico.•The footwear industry is of enormous importance to the Mexican economy.html .22% of Gross Domestic Product (GDP) in 2008 and 1% of manufacturing GDP.gob. accounting for 0. •Once again.

20. •Of the 250. followed by Canada and Japan.•The footwear industry is of enormous importance to the Mexican economy. accounting for 0. •The main international market for Mexican-made shoes is the US.000.000 pairs of shoes the country manufactures. . while imports stand at 60.22% of Gross Domestic Product (GDP) and 1% of manufacturing GDP.000 are exported.

The León area has a variety of educational. a highly-skilled workforce and good communications infrastructure. •Economies of scale. • Manufacturers also have access to international fairs. • Educational infrastructure. where their products enjoy a high degree of prestige.Local inputs of leather and synthetics reduce the transportation costs (and time) for obtaining raw materials •Shared suppliers. training and research centers all supporting the leather and footwear sector.•A well established supplier chain. • Affordable and the industry has a long-standing tradition in certain parts of the country like León. •Local raw materials. . Guanajuato.

•Chinese footwear imports talking the market by storm. .•International economic crisis could eventually affect sales on the domestic and international markets. demand continues to grow on both.

just-style. which will take effect on 1 May and run until December 2014. •The agreement. Source: http://www.com/news/mexico-signs-footwear-import-deal-with-china_id113922. aimed at governing imports of Asian footwear entering Mexico.aspx .•What we are seeing today is a shift towards strategic alliances for the subcontracting of production processes. •Mexico and China have reached an agreement. which is particularly appealing to investors. aims to prevent cheap footwear flooding the Mexican market.

Both brands remain very popular in Mexico.Emyco: Company Background •The company was founded in 1926 by Felipe Martinez. who took advantage of abundant leather supplies and skilled metal craftsmen in the central Mexican city of Leon to lay the foundations of the country's shoe manufacturing industry. along with the use of its brand in Mexico. where Florsheim's best-known client is President Felipe Calderon . "I felt the company needed to become international and to produce leisure shoes. shoemaker Florsheim to open a chain of Florsheim stores in Mexico. •1967 : Deal with the American maker of Hush Puppies to distribute the shoes in Mexico. also named Felipe Martinez. • His son. •1972: Emyco reached an agreement with U." says Martinez. •1990: Emyco bought the chain from Florsheim. joined the firm fresh out of university in 1964 with big plans of his own.S.

• It takes 140 different assembly-line procedures . • Every finished shoe is inspected. • Its main factory.500 employees work. •As a privately held firm. where more than 1. sprawls across several acres of former ranchland on the southern edge of Leon.•To maintain its competitive edge. But the Leon Chamber of Footwear Industry says big outfits like Emyco earn a net profit margin of about 7 percent on an average pair of shoes. Emyco doesn't disclose financial information. . Source: Mexican Shoemaker Relies on Sex Appeal. to manufacture a single pair of shoes. which suggests the company made a net profit of about $25 million in 2008. Not Bank Credit| Institutional Investor (Mar 2010): n/a. only one or two of them performed by each worker . Emyco invests heavily in technology and quality control.

accounted for just over 90 percent of the 6 million pairs of shoes it sold in 2009. •Although Emyco sells shoes through the American department store chain Macy's. at an average price of $70 a pair versus $50 in Mexico. the company isn't a big exporter. Not Bank Credit| Institutional Investor (Mar 2010): n/a.•Difficulties the company faces in defending and growing its market are emblematic of the challenges facing the country's medium-size enterprises. Source: Mexican Shoemaker Relies on Sex Appeal. . •The domestic market. where Emyco owns 110 retail stores.

launched to help the company bounce back from a 15 percent drop in sales in 2009. •"Our women's shoe production is completely booked until May." says Martinez. the lead singer of the British band the Ting Tings. wore "Sexy Walk" high heels at the recent Grammy awards ceremony. and Emyco got a boost when Katie White. •Orders were up 50 percent in the first quarter compared with a year earlier. .•A case in point is Emyco's "Sexy Walk" shoe line for women.

Supply chain woes: Store locations of Emyco .

Window of opportunity in tight financial times •According to the local chamber of commerce. Emyco often negotiates with a leading department store chain. while supplier credit accounts for 65 percent. the city's 967 shoe factories depend on banks for only 15 percent of their financing on average. •A large business like Emyco has the bargaining power to extract better financing terms from its clients than from the banks. . Liverpool. offering discounts if the retailer pays early for shoe orders. For example.

The science may be debatable. making the body relax and releasing pheromones that attract men. •On the same lines using competence of Emyco they should develop some high end products targeted at youth.Enter into youth segment(15-25 yrs): •Company designers claimed that granules on the "Sexy Walk"' inner soles activate reflexology pressure points. . but the marketing is certainly working for Emyco.

•In the process brand values of the premium range should duly be protected and should not be allowed to get diluted. .Come out with lower price range footwear series: •Open below premium segment footwear stores and pass on the aspirational value to those who can’t afford the high price range shoes.

Form value proposition solution on these fronts: •Business •Economical •Technological .

They should take advantage of the time and expand aggressively in domestic markets. •Foreign markets should be focused on next priority .China import treaty •Till 2014 China treaty is valid .

. Latin America Countries.Focus on untapped markets: •Markets where ethnic footwears are much in demand should be targeted aggressively •Brazil. Western Europe can be such locations.

Thank You !! .

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