Bringing Bata back

BATA, the shoe-maker is still around - Singapore is in fact home to its Asia-Pacific and Africa operations. Yet the name Bata today probably doesn't ring a bell with most young Singaporeans who, where footwear is concerned, are drawn rather more to the marketing power of Nike and Adidas - sportswear giants that came into the business after Bata. Older Singaporeans will know Bata. They literally grew up with it. Nearly every kid in the 1960s, '70s and '80s wore, or dreamt of wearing, a pair of white Bata canvas shoes to school. They were the Bata generation who lived by the brand's tagline: "First to Bata, then to school". Bata was so much a part of Singapore life that it's often mistaken as a homegrown footwear company. Those who thought they knew better said it was Malaysian. Others swore Bata was from Canada. The people who got to meet the company's executives were told it originated in Czechoslovakia in central Europe, today's Czech Republic.

In Singapore on a recent visit, Alexis Nasard, Bata's new boss, tells BT the company was indeed started in the Czech Republic in the late 19th century but is now headquartered in Lausanne, Switzerland. The Bata family who started the company still owns it, though day-to-day running of the business is now left to professional managers.

The family migrated to Canada during World War II - which probably explains why some people think the company is Canadian - and many of the members born there have subsequently uprooted and moved to other countries.

This itch to keep moving to new places perhaps reflects the "very enterprising and pioneering" spirit of the Bata family - something that Mr Nasard, who was named CEO in April this year, cites as he explains why the company expanded its business overseas so early - long before other European companies did - and went so far. Asia, especially in the 1930s, was a long way from Czechoslovakia. Yet in 1931, Bata had already set up shop in Singapore.

These days, every company which wants a global footprint is present in Singapore. Venturing overseas is no big deal in this globalised age - and Bata no longer has the global markets all to itself; it has to fight - and fight hard - for its share. Competition has ramped up, as the man laments during a short chat at Bata's store in Peninsula Plaza, with a retinue of his executives in tow.

In any case, the market pioneer doesn't stand out anymore in an overcrowded market. So it isn't surprising that Bata is no longer the household name it used to be in Singapore.

"We're liked and respected but over time, we lost a bit of the swagger (with young people)," says Mr Nasard. "Many perceive us now as a traditional brand - and that's a perception we want to change."

Losing its appeal with the young is especially hard on the company, not just because they represent future customers. "Young people are becoming increasingly engaged in footwear, owning more shoes," the Bata CEO says. And that's an important trend you don't want to ignore.

Image, of course, isn't the only problem. Mr Nasard points to the changing consumer landscape. Formal and even athletic shoes are on the way out, while leisure footwear like sneakers are catching on - and the trend is underscored by the man himself, who is wearing a pair of sneakers.

Indeed, men are growing more fashion-conscious than they used to be, according to Mr Nasard. Men no longer are happy with just any pair of shoes as long as they fit; they now demand something trendy. Women - who once had to choose between comfort and looking sexy, but not both - want both these days.

Growing market

All these point to a bigger but more complex market for footwear. "It's a growing market that's also becoming more dynamic," Mr Nasard notes. "It's also more competitive in terms of more players, but the nature of competition has also changed. With the evolution of e-commerce, there are also different channels of selling brands. The landscape is more fragmented."

The bigger boys in the business have given Bata a hard time. In 2007, Bata was driven to shut all its stores in Canada, where the company first appeared in 1939. In April this year, after restructuring the operations in Switzerland, Bata closed its remaining 29 retail outlets there and switched to e-commerce and to selling its shoes through multi-brand retailers. The shift in the shopping habits of customers to buy online and from fashion retailers in an already-crowded Swiss footwear market - along with a strong Swiss franc that's pushing shoppers to shop in neighbouring France, Italy and Germany, where currencies were weaker - proved too much for Bata to maintain stores in the country.

At the same time, Bata was also reportedly planning to pull the plug on its 70 stores in France, after piling up losses. The company had been doing business there for 90 years.

Mr Nasard, whose appointment came while Bata was still making the cutbacks, must have been hired to fix the problem. (He's not saying he was.) While he's not known for being a turnaround artist, the 50-year-old arrived with nearly 24 years of experience in consumer goods - six at Heineken and 17 at Procter & Gamble. Mr Nasard came also as a senior adviser at McKinsey & Company, a position he held since January 2015, and still does.

Despite the consolidation in its business, the new CEO says Bata remains among the world's top 10 footwear producers, at least in sales revenue. Indeed, according to the Guinness world records, Bata, which has been in the business since 1894, has produced over 14 billion pairs of shoes - the biggest number ever.

The company also boasts a long heritage in shoe-making. While Bata's business strategy has changed over the past 122 years, it has clung to its values "anchored in improving lives, serving consumers with passion and being brave and bold in tackling opportunities", says Mr Nasard.

And underlying all this is "an obsession with the product, shoes, which lies at the very heart of everything we do", he adds.

Regaining relevance

Bata's shoes have long been known to be comfortable and affordable. This has helped it keep its share in some markets, like India where Bata is more popular than bigger global brands such as Adidas, Reebok and Puma, according to consumer polls. "Nike and Adidas are better known (globally) because they are selling not only footwear, but also a (wide) range of accessories," Mr Nasard notes. "They also leverage on very high-profile celebrities which further enhance the awareness of them."

Bata does not rely on global personalities, but makes use of local stars, especially in Italy and Columbia.

"They're more relevant to consumers and a lot less commercialised," Mr Nasard explains. "Many of the global celebrities are sponsored by 15 to 20 brands. (While) they get the awareness people want, they (people) don't get the association with the brand. (But) if you have a local celebrity who's inspirational, whom people like, who have values common with the brand, the returns on investment are much higher."

Bata has a presence in 70 countries and, according to him, it has done "extremely well" in penetrating emerging markets.

"We've a solid and profitable presence there, but we've lost a bit of relevance in developed markets," Mr Nasard says. "We used to be one of the top brands in Europe, but now no longer so. We're still strong in places like Italy and central Europe but we lost a bit of our cache in the rest of Europe."

He says Bata needs to recover its market share in Europe because "it's very important to have a balanced presence".

What about the US, the world's biggest market?

"We've never been present in the US," Mr Nasard says. "We're not going in, not in the short run... Our brand awareness there is very low. It's better to develop where your brand awareness is high - and there's plenty of opportunities for us in these markets. The list is very long."

He stresses that the company is determined to pursue a balanced growth profile between developed and developing markets. This is to sidestep the risk of putting all its eggs in one basket. Also, while many believe emerging markets are the future, Mr Nasard indicates that it would be foolish to abandon the developed world. He points out that the latter still represents 60 per cent of world GDP.

Keeping a balanced growth profile is critical for "brand-equity purposes", he maintains. "The way we will win in Europe will be through adopting a differentiated strategy ingrained in a competitive product offering, and offering consumers a seamless shopping platform both online and off-line. We will keep fuelling consumer desire by constantly offering cool shoes that people want, behind 'surprisingly affordable' pricing."

The Bata chief thinks physical stores are still here to stay, even as more people are switching to online shopping. But the stores have to play a new role, one that offers an inspiring shopping experience that's fun and easy, backed by great service.

"The store also will need to be a complement to the online shopping experience, and vice-versa," Mr Nasard says. "The invention of the VCR did not kill movie theatres. It made them better."

But the product must first be right. "There can be no proper shopping experience if we are not able to offer consumers shoes that people want - and we are committed to that," Mr Nasard emphasises. After that comes the visual concept and the ambience and, quite importantly, the ease of navigation, "as people increasingly want to discover what they need in a quick and easy way", according to him.

"Last, but certainly not least, comes service," Mr Nasard says. The bar for service must be raised now that it's very convenient to shop online, to browse and compare prices. The service offered in brick-and-mortar stores has to go beyond the sales staff bringing the customer shoes to try and offering advice, he says.

Thus product, people and service will be Mr Nasard's key priorities in Bata going forward.

"Product is king," he says. "You can be efficient, effective, do whatever you like on retail, organisation. If your product doesn't deliver, you don't go anywhere."

But people, even men, want more than just a pair of basic and easy-to-wear shoes. The shoes must also look good. And what looks good to the buyer today is unlikely to be so tomorrow.

"We need to keep raising our game in product design to ensure that we offer consumers cool, contemporary designs which give unsurpassed comfort," Mr Nasard says. "We also need to keep sharpening the structure of our collections to optimise our in-store offerings."

Of course, Bata is also working on the image of the brand through "sharp marketing segmentation, sharp positioning", he adds.

"We want to be increasingly a brand which is sexy, comfy and cheeky," Mr Nasard said. "We want to surprise customers with our product offerings, our marketing initiatives... I'm not going to tell you a lot about this, because I also want to surprise you as a consumer."

What he does let on is - yes, no doubt about it, bringing the "swagger" back to the brand will be something that's very important for Bata.

ALEXIS NASARD

CEO, Bata

1966 Born in Beirut, Lebanon

Education

1984-89 MSc (Engineering), St Joseph University, Beirut

1989-91 MBA, UC Berkeley's Haas School of Business

2011-15 Executive programmes, Harvard Business School

Career

1992-2009 General manager, Procter & Gamble

2010-2015 President, Western Europe and global chief marketing officer, Heineken

Since 2015 Senior Advisor, McKinsey & Company

Since April 2016 CEO, Bata