Kerala-based VKC Group took some bold bets to become one of the largest homegrown footwear manufacturers. It is now banking on overseas tie-ups to leave a global footprint
VKC Noushad hopes to sponsor the Indian cricket team one day. If Nike could, Noushad certainly sees no reason to think otherwise. The 50-year-old is the managing director of the VKC Group, a Kerala-based footwear maker—among one of the largest homegrown manufacturers. “We are targeting the masses,” Noushad tells Forbes India over a Zoom call from Coimbatore. “We will definitely be looking to sponsor the Indian team one day, but as a common man’s brand.”
The group, founded by Noushad’s politician father VKC Mammed Koya, runs a business that comprises over 20 manufacturing units spread across eight states. It operates 14 brands, and counts Bollywood superstars, including Aamir Khan and Ajay Devgn, as brand ambassadors. From a paltry revenue of ₹50 crore in 2005, the group boasts revenues of over ₹2,100 crore annually today.
The VKC Group comprises three entities—the umbrella brand that traces its root back to 1984, and two divisions run by Noushad and his brother VKC Abdul Razak. While the siblings take care of the company’s flagship products—VKC Pride, VKC Lite and VKC Stile—jointly, they have also clearly demarcated their business. Division one is run by Noushad and comprises the Walkaroo brand that contributes 50 percent to the group’s turnover. Razak runs division two that comprises brands such as Blue Tyga and Vestire.
Almost all the brands are focussed on footwear, and businesses are now being diversified into apparel and school bags, among others. “We are focussed on the democratisation of fashion,” says Noushad. “The Indian customer is demanding the latest products and fashion compared to earlier times. We want to cater to that… the opportunity is massive. If we don’t do that, the market will be taken over by multinationals and Chinese products.”
India’s footwear industry is highly unorganised with nearly 15,000 micro and small industries, according to the Council for Footwear, Leather & Accessories (CFLA), an industry body set up under the aegis of the commerce ministry. India is the second-largest producer of footwear in the world, accounting for 13 percent of the global footwear production, after China (about 67 percent).
“Whenever we fail to bring an element of technology or fashion into our business, or if we miss key trends… import happens very fast,” says Noushad, who is also vice president of the Confederation of Indian Footwear Industries. “As an association, we are trying to bring new technologies to India to ensure that we all grow together.”
Wood to Footwear
The VKC Group started as a wood and timber business entity in Kerala in the late 1960s.
With his two friends, VKC Mammed Koya started a company that supplied raw materials to matchstick industries. Taking the initials from their surnames, the company was named VKC. Koya is currently a legislator in Kerala and was the former mayor of Kozhikode.
The company started with manufacturing matchsticks and though business flourished for a decade, it had to deal with stiff competition thereafter. “Initially, there were only two industries in our area,” says Noushad. “By 1984, there were 162 units, and we realised we would have to shut it down because it wasn’t going to be sustainable.”
Around the same time, Kerala began to see a huge demand for ‘Hawai’ chappals. That prompted Koya to venture into the footwear market by manufacturing ‘Hawai’ chappals since the Southern state had a robust rubber industry. The company set up one unit near Kozhikode to cater to the North Kerala market and Koya went to the Rubber Research Institute of India in Kottayam to understand the business. He also took up numerous trials at the institute to build the right quality of rubber sheets to manufacture the chappals.
“There were a few pain points that my father wanted to solve,” recalls Noushad. “While slippers were being used for daily use, there were also labourers working in construction or farming. They needed something sturdy and we offered that along with unique colours and packing. From then on, there was natural growth and acceptance in North Kerala.” The company started producing about 600 pairs of chappals a day.
Back then, labourers in Kerala came from adjoining states, including Tamil Nadu and Karnataka, and many were instrumental in introducing the product to other states. Around the same time, Koya began educating his children about the footwear industry. Noushad studied chemical engineering at the Thrissur Engineering College before going on to do his master’s in polymer technology. It was a time when the industry began to see excess capacity as manufacturers ramped up production. Noushad, meanwhile, underwent training at the Rubber Research Institute, and spent time in New Delhi and Batanagar, West Bengal, to understand the business.
By 1994, Noushad decided to focus on virgin quality polyvinyl (PV) footwear in Kerala, which had begun to replace rubber slippers. “I was quite fascinated by the business, and even enrolled for a PhD at IIT-Madras, before quitting to focus on the business,” he says. Technology, however, was fast-evolving and, by 1998, Noushad began focusing on microcellular polymer footwear with Taiwanese machinery to stay ahead of the market.
“We were still a small business with an SME mindset, with 50 people,” says Noushad. “We were afraid to deal with complexities. We started small units for every technology.” By 2000, air-injected PV with synthetic leather had caught on, and the company set up two additional units. “We were only in Kerala… but we had different brands based on different technology,” explains Noushad. The group had a revenue of ₹20 crore by the end of the millennium.
The Big growth
By 2003, the company started an EVA (ethylene-vinyl acetate)-injected unit, a technology for soles that makes them soft, flexible and weather-proof. “That was a turning point in our business,” says Noushad. Around the same time, he had visited Coimbatore in pursuit of expanding the family business that had largely remained within Kerala. The company started with one unit. “Initially it was extremely tough. In Kerala, we had good distributors. But in Tamil Nadu, dealers were keen on more margins and higher credit. They would take our products and didn’t sell them. We were in trouble,” he adds.
“ The indian consumer demands the latest fashion, products. We want to cater to that...the opportunity
is massive.”
VKC Noushad, chairman, Division 1, VKC Group
(This story appears in the 26 February, 2021 issue of Forbes India. To visit our Archives, click here.)