ECCO shoes enters local retail market

Denmark-based firm guns for top-three spot in brown-shoe sector within 5 years ECCO, a Danish footwear brand, opened its first local retail shop yesterday and announced it had plans for 39 more company-owned outlets as it seeks to reach domestic sales of Bt600 million within five years.
The Danish firm said it would also invest Bt1 billion over the period to double the production capacity of its local factory to serve its predominantly Asian sales expansion.
ECCO (Thailand) is also considering the possibility of franchising its stores as part of ECCO’s global policy, which was launched two months ago, managing director Kitti Chaiwattanatorn said.
Of the 40 planned company-run outlets, a dozen would be ECCO shops costing Bt10 million to Bt15 million each, while the remainder would be retail space in department stores under consignment contracts. The first shop was opened at Central Pinklao with another scheduled for September at Central City Bangna.
ECCO (Thailand) has only just embarked on domestic retail sales even though it was founded in 1994. Up to now, all of the output of its Ayutthaya factory has been shipped to centres in Denmark and the Netherlands for distribution mainly to the United States and Europe.
“ECCO has never distributed our products here before but now expects to become one of the top three players in the brown shoe [casual] market in five years,” he said, adding that the casual footwear segment is worth Bt5 billion a year.
Hush Puppies ranks first in the local casual shoe market with a share of about 10 per cent, followed by Dapper, Nine West and Clark.
“With our local production, we can sell our products at prices 20-40 per cent cheaper than our competitors. Most of their products are imported and the import tariff runs as high as 40 per cent,” Kitti said.
Prices of ECCO shoes sold here range from Bt1,000 to Bt3,000. Some styles would be imported from Italy next month to serve customers here.
ECCO targets domestic sales of 30,000 pairs this year with a target of 250,000 pairs in five years.
To serve ECCO’s policy of focusing on the Asia region after its success in the United States and Europe, the annual output of the finished product factory in the Saha Rattananakorn Industrial Estate in Ayutthaya would be increased from 3 million pairs at present to 6 million.
Globally, ECCO ranks seventh with 5 per cent of the world market behind international brands such as Clark, Timberland, Sketchers and Doc Marten.
Through deeper penetration into the Asian market, the Danish firm hopes to boost its sales by roughly a quarter this year compared to only 8.7-per-cent growth last year.
“The Thai factory will be the only facility that ECCO will expand over the next three years,” he said, adding that the parent company also operates a shoe parts factory in Indonesia, while a Chinese factory is run on a production-contract basis by a local company.
Nareerat Wiriyapong

About Gregers Møller

Editor-in-Chief • ScandAsia Publishing Co., Ltd. • Bangkok, Thailand

View all posts by Gregers Møller

Leave a Reply

Your email address will not be published. Required fields are marked *