India’s shoe industry holds lessons for Aba
Aba is Nigeria’s major footwear manufacturing hub, estimated at over N120 billion. The activities and value of the industry are big enough to affect Nigeria’s economic development and encourage trade relationships with other countries.
There are lessons Aba shoemakers can pick from their Indian counterparts.
Just like Nigeria, India, one of the fastest growing emerging markets, has its shoe manufacturing hub located in various areas in the country. In 2017, the country was among the top 12 exporters, shipping out products valued at $1.7 billion in 2017 and accounting for approximately 2.7 percent of the total global footwear output.
The government of India recently established the Indian Footwear Leather and Accessories Development Programme (IFLADP) that grants 20 to 30 percent subsidy for micro, small and medium enterprises for capital expenditure purposes which include building a plant and buying machinery.
Furthermore, to encourage the business owners, Rs2,600cr is set aside as a special package for fuelling the leather and footwear industry, while no less that 300,000 people are trained on government sponsorship annually.
But funding has been a major issue to Aba artisans. Banks are not interested as they complain that Aba artisans do not have good business models.
The Indian shoe industry focuses on supplying domestic demand with citizens patronising locals more than imported products.
India’s footwear industry is driven by technological innovation, which helps to improve efficiency and output. Ducere Technologies in India invented a technology known as ‘LeChal’ with which it produced sports shoes with GPS. The shoes are Bluetooth-enabled and they can connect to the smartphone with the software to use for free, just as Google Maps on the cell phone or mobile device, according to Innovation Hacking Lab, an online information web.
The shoes often vibrate and inform the user about directions, providing information on the distance walked, the calories burned and the number of steps taken along the way.
Krispian Lawrence, co-founder, said in July 2018 that the product also helps the visually impaired.
“We understood this idea and we realised that it could really help the visually impaired or people with other needs because it works without any audio or physical distractions. It feels very liberating because you do not have to look at your phone or be tied to anything. The shoe works instinctively. Imagine if someone touches your right shoulder, your body reacts naturally to turn right, and that’s how LeChal works,” Lawrence said in an interview with AFP News, quoted by innovationhackinglab.com.
The company had an initial investment of $250,000 in 2011 and raised $2.5 million until 2013.
This is the kind of innovation needed in Nigeria’s industrial hub, analysts say.
Experts say Aba shoe industry is still laced with hand-made artistry, which mostly requires much human labour and accommodates less technology.
“The role of government in innovation cannot be too stressed,” said Ike Ibeabuchi, a Nigerian manufacturer.
“The private sector can drive it, but government can help in terms of funding and the right environment,” he said.
Indians patronise Indian shoes, though there is no restriction to purchasing imported products. Compliance to the Executive Order 003 established by the president must be strengthened by Ministries, Departments and Agencies (MDAS).
The Order requires MDAs to grant preference to local manufacturers of goods and service providers in the procurement of goods and services to the extent of about 40 percent. This is meant to enable local firms to expand, create jobs, especially for the youth, and generate wealth.
Products from Aba are gaining traction in the military, but more is needed to encourage domestic consumption regardless of the influx of foreign products.
“But it is also about quality,” said Onyeka Charles, a Lagos-based surveyor.
“Give us good quality and we will pay,” he added.
Furthermore, branding and marketing strategy must be indigenous and domesticated. Findings reveal that artisans in Aba brand their products ‘made in China’ in order to boost market reach and improve patronage locally and globally. While it might serve its function, it kills the prospects of boosting Nigerian- made products and their impacts on local economy.
Shoemakers will need to work on rebranding and repackaging their products for higher and wider consumer attraction/acceptability.
“Branding is important because it helps to change the perception of consumers who think that Aba products are inferior,” said Amanchukwu Nwankwo, a shoemaker in Aba.
The industry is in need of foreign investors and partners in order to foster the much desired growth, development and recognition.
Ken Anyanwu, national secretary, Association of Leather and Allied Industrialists of Nigeria (ALAIN), told BusinessDay in Aba that entrance of foreign investors and partners would enable the industry to compete globally and make funds for expansion easily accessible.
With the presence of foreign investors, stakeholders in the industry will be exposed to trainings that will inspire innovations and new designs, including exposure.
More so, in 2017, the Indian Parliament passed a bill to promote the footwear industry and raise its standard to the international level.
It came up with the Footwear Design and Development Institute Bill to establish and declare the Footwear Design and Development Institute as an institute of national importance for promotion and development of quality and excellence in education in this area.
It therefore raised a standard for those aiming to export their shoes.
Analysts see this as a welcome development, but add that implementing it in Nigeria will require engaging all the stakeholders, while providing fool-proof incentives for artisans.
For example, Indian government followed it with assistance to export-oriented factories. Experts believe that Nigerian can achieve that when it is ready to compete.