The children's footwear market - Italy

1.2 The world and European market

The world shoe market:

Evolution and forecast of footwear sales World, ****-****, billion dollars Source: ****

The graph above shows the evolution and forecast of footwear sales by value (***) over the period ****-****. The market is growing fairly steadily over the period.

The forecast shows a steady growth trend for footwear sales in the up to ****, with a market value of $***.* billion by ****. Over this forecast period, the market value grows at a CAGR of *.* percent. The year **** was a drag on the forecast made before the Covid-** crisis, in fact there was a -**.*% drop in production.

The top end of the market accounts for about **% of the global footwear market, and Italian companies reacted very well to the **** crisis: in fact, they recovered much faster than lower-end footwear.

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Top ** global footwear manufacturers World, ****, millions of pairs Source: ****

The chart above shows the world's top ** shoe manufacturers. The huge production gap between China (***) is immediately apparent. Italy is also in the ranking, as the only European country that emerges among the top world players.

European market for children's footwear production:

According to Prodcom data, the European children's footwear production market is valued at ***.* million euros in **** in value terms, representing ...

1.3 A very strong production of footwear for all

Italian footwear production has always been one of the most important in the world. As seen in the previous part (***), Italy is the **th largest footwear producer in the world, and consequently its turnover is very high.

In addition, what contributes significantly to high production is the name of Made in Italy, which always makes the whole world dream. In fact, Italy's high-end footwear achieved sales representing more than *.* billion euros, the highest component of all.

From the graph below, it is clear that the companies' sales halved between **** and ****, and this decline has not been made up in ****, where sales are still well below the **** results. The market expects to reach pre-pandemic numbers at the close of the year ****, but no concrete timeframe can be defined, considering the difficult international situations.

Turnover of footwear companies Italy, ****-****, in billion euros Source: ****

Despite a high turnover for the €*.* billion footwear market , the specific sector of children's footwear realizes a much lower turnover. In fact, **** figures reported by Il Sole ** Ore indicate that it is well below *** million euros.

1.4 The trade flows of footwear

Italian footwear trade with the rest of the world suffered greatly from the Covid-** crisis, and even today this market is marked by a difficult recovery (***).

As for footwear exports, there are consistent improvements that give positive signs for recovery. In fact, compared to ****, exports mark a +**.* percent overall and in terms of quantity a +**.* percent. Italy's main trading partners have all had a positive recovery, marked by almost double-digit increases.

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Exports and imports of footwear Italy, ****-****, in billions of euros Source: ****

The graph above shows the evolution of Italian footwear exports and imports with the world. As can be seen, the **** crisis strongly impacted the market.

Footwear Exports Italy, ****, in % Source: ****

Footwear imports Italy, ****, in % Source: ****

Of the **.* billion euros in exports realized in ****, the luxury footwear segment (***) counted for as much as **.* percent, a figure that strongly helped the economy and the Italian footwear sector recover after the sharp decline in ****.

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2.1 The habits of Italian households

Italian household purchases by commodity segment show the following results:

Increase in Italian household spending compared to **** Italy, ****, in % Source: ****

The main segments of the footwear market show clear signs of recovery, in the case of women's and sports shoes and sneakers even in double digits. Children's footwear has also made a good recovery, showing a *.* percent increase over **** household purchases. Despite this, levels are still well below ****.

Footwear consumption by Italians Italy, ****-****, in millions of pairs Source: ****

The children's footwear segment is one of the segments that suffered the least in ****: in fact, together with the sports footwear and sneakers segment, it experienced a decline of -**%, a number far lower than others, such as men's footwear, which experienced a decline of -**%.[***]

According to the Fashion Consumer Panel in **** the purchasing behaviors of Italian households have changed a lot compared to ****, in terms of consumption and spending. In detail:

Behaviors of Italian households Italy, ****, in % Source: ****

In concrete volume terms, the -**.* percent less footwear purchased corresponds to ** million fewer pairs.

The reduction in the average price spent is explained by the absence of the need to buy footwear for going out, and therefore staying at home did ...

2.2 The clientele of companies

In the children's footwear industry, the customers directly concerned are children (***). However, it is not they directly who buy footwear, but it is families. For this reason, this section will analyze the amount of children in Italy, and the number of families on the territory.

If we take into consideration the whole Italian population, so all ages mixed up, the consumption is as follows:

Italian household consumption by age of consumers Italy, ****, in millions of pairs Source: ****

It can be seen from the graph above that male children are the category that consumes the most footwear in Italy, while for females this is not the case, but they are still the third category. Thus, it can be understood that children are a very important clientele for the market, because they tend to consume more footwear, due to more frequent wear and tear.

Another important fact to note from the graph is the homogeneity of consumption between male and female children: it is therefore understood that it is a common demand, and not targeted only to a specific category.

Italian children:

Children aged * to ** years Italy, January *, ****, in whole numbers Source: ****

The graph above shows the breakdown between male and female children ...

2.3 Where Italian households buy

Purchases of footwear made by Italian households are divided according to the following sales channels:

Italian household consumption: sales channels Italy, ****-****, in % Source: ****

The graph above shows percentages of total sales. Chain stores are the favored ones in the Italian market. At the same time, it is also the distribution channel that suffered the most from the **** crisis, losing just under * percentage points.

It can also be seen that online sales have significantly increased their distribution, rising with just under * percentage points to be the second most important purchasing channel after chain stores.

Key characteristics for purchase Italy, ****, in % Source: ****

The data result from a **** survey by Eurispes on the habits of Italians. According to the statistics in the graph above, it turns out that for more than one-third of the population(***) the main factor is comfort, and this is even more true when it comes to children's footwear: in fact, the qualities essentially sought after by parents are:

Coodness to the child's foot Ease of putting it on and taking it off Safety

3.1 Footwear manufacturing companies in the country

Children's shoe production is closely linked to footwear production, as the same companies produce women's, men's and children's shoes.

Cribis ' **** report reveals some peculiarities about the composition of Italian companies operating in the footwear sector. The findings highlight the following compositions:

Composition of companies in the footwear sector Italy, ****, in % Source: ****

The manufacture of machinery for industry, refers to equipment for processing leather, hide, and other materials for footwear.

Thus, on the Italian territory, companies mainly operate in retail trade, and again according to the same report mentioned above, the breakdown of companies in this sector is as follows:

What kind of legal companies are the firms in the sector:

Finally, in ****, according to Istat, the number of companies operating in the sector were:

Footwear manufacturing companies: * *** (***) Footwear trade companies: ** *** (***) Footwear trade intermediary companies: ** *** (***)

From surveys conducted by Cribis, the legal form of Italian companies in the sector is:

Legal form of companies in the footwear sector Italy, ****, in % Source: ****

The legal form chosen, in most cases, does not allow for much international openness. In fact, **.* percent of companies have a low level of internationalization. In addition, since they are often companies founded several decades ago, one can also note ...

3.2 Employment in the sector

Employment in the footwear industry has suffered greatly from the Covid-** crisis. In fact, the number of employees has been declining since ****.

Number of employees in the footwear sector Italy, ****-****, in whole numbers Source: ****

After a significant increase between **** and ****(***). The industry's workforce is in sharp decline due to Covid-**, and the economic performance of businesses still far from pre-pandemic levels does not suggest that employment will soon return to the same previous level.

The following two graphs show the breakdown of firms by number of employees, and the distribution of employees across firms:

Distribution of firms by number of employees Italy, ****, in % Source: ****

Distribution of employees in companies Italy, ****, in % Source: ****

From these two graphs it can be concluded that the majority of Italian companies have few employees, and this is also consistent with the legal form of the companies (***).

3.3 The dynamism of Italian companies

Italian footwear companies are an important engine for the country's dynamism. In this part, the most dynamic regions will be highlighted. The paramenter used will be each region's contribution to international trade (***), measured as a percentage.

Thus, from the results on the **** performance of Italian companies, we find the following breakdown:

Footwear exports by Italian region Italy, ****, in % Source: ****

Veneto is the most dynamic region, this is not surprising given the high concentration of companies of all types in the region, and the great dynamism of northern Italy. Then next we find Tuscany, which from a national perspective is a major producer of leather and leather goods.

The main companies in this sector are: Eram, Kats Shoes, XO Footwear, Tej Shoe Tech, Calix Footwear, Crocs, Action, Disney, Acebo's, Kavyee Footwear, Bata Shoes, Nilson Group, Gorav Shoes, Sobhagya footwear, Gorilla, Superhouse Group, Azam Rubber Products, HS Sales Corporation, Indman, Campus.[***]

4.1 The requirements of children's footwear

There are several components of footwear in general, but children's footwear must possess special qualities so as to fit the child's foot. This is because children undergo constant changes to their bodies, and because they are in constant movement. So the footwear must allow them this movement. The characteristics are:

The sole must be flexible, to accompany all the movements of the child, and also give him stability The upper (***) must be soft, so as to avoid irritation to the skin of the foot The toe part should be roomy enough to allow the movement of the toes of the baby's feet, so it should not be too tight The shoe should be high enough to give stability to the ankle as well, so as to limit pain or accidents Preferably, the shoe should be able to close with a hard tab to prevent it from opening easily, and also to make it easier for the child to put on and take off the shoes. If not, the laces should have many holes to increase the stability of the foot in the shoe The footbed should be normal, to give support

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4.2 Average prices per pair

The graph below summarizes the price ranges of footwear. The graph differentiates the quantity bought and the value over the total Italian footwear market. The change between the two percentages immediately stands out for the footwear categories over €**,***. In fact, from this segment on, value has more weight on the market than quantity. This can be explained by the small number of households that can afford to spend that much on footwear, and of the value per pair of shoes in the somewhat more high-price category.

Italian household consumption by retail price range Italy, ****, in % Source: ****

Average pair prices of children's shoes Italy, ****-****, in € Source: ****

Between **** and **** there was then a change:

Children's shoes: +*.*%, so prices increased Children's slippers and slippers: -**.*%, prices thus decreased

4.3 The most commonly used materials

Footwear is produced using a variety of materials, the most popular being:

Leather and leather Synthetic Rubber Fabric

Italian footwear manufacturing companies are also involved in the marketing of these materials, and others.

Exports and imports by upper material Italy, ****, in % Source: ****

These data presented in the graph above are from ****, thus the year of the crisis. Compared to ****, the export results are in slight decline. In fact, exports for the most popular materials for footwear production have been reduced, in detail: -**% for leather footwear, -**% for synthetic footwear, -**.*% for textile footwear, -*% for rubber footwear.[***]

The footwear production process:

There are four essential points for footwear production:[***]

Cutting. At this stage, you go to cut the material chosen for the shoe (***). Sewing. at this stage, the upper is assembled by various sewing machines. Assembly. at this stage, the sewn upper is assembled using a dummy that resembles a human-shaped foot, which differs according to model and size. Finishing. at this stage, the entire production process is finished, assembling the last pieces: the heel, heels, sole...

5.1 European regulation

For the manufacture and distribution of footwear, there are European-wide rules that manufacturers must follow.

All rules can be found at the following link.

Globally, the European standards deal with:

About equal purchase information On export control, brokering, technical assistance, transit and transfer of dual-use items On market surveillance and product conformity On the approximation of the laws, regulations and administrative provisions of the Member States concerning the labeling of materials used in the main components of footwear for sale to the consumer

All of these rules are inscribed in an excellent complementarity to the existing national system.

6.1 Segmentation of actors

• Decathlon Groupe
• Adidas
• Asics
• Benetton
• Diadora
• Fila
• Basicnet Group Kappa