BATA SOUTH AFRICA: Strategy Step-Up Strengthens Bata Ambitions

Last year, a leading South African manufacturer, creating much-loved products for consumers around Africa, was consolidating and searching for opportunities post-pandemic. Michael Wyatt, MD at Bata South Africa – the famous maker of robust school shoes and industrial footwear, part of the international Bata Group – told Enterprise Africa that a strategy had been put in place to focus on core business while markets were tight.

Now, the company is busy stepping out again, emerging in a strong position, and targeting significant growth in its trusted markets alongside expansion in new sectors.

Currently the custodians of a number of South Africa’s favourite footwear brands, with a powerful manufacturing facility in KZN, Bata is an important player in the country.

“Our strategy was successful,” says Wyatt of 2021’s plan. “We delivered our budget and we delivered our numbers for the year – we actually overperformed against what we had set out. It was a successful strategy and it saw us through what we needed to get through.”

Today, he says, the company is thinking about the next steps forward. “We are working on a five-year plan from 2023 to 2027. That plan entails almost the complete opposite of what we spoke about before. Post-Covid, we are looking to expand the business aggressively in South Africa and Africa. There is a desire to broaden the business beyond school and industrial categories.”

STEPPING UP

Globally, Bata is a major footwear and fashion organisation. The group sells 150 million pairs of shoes each year, employees 32,000 people around the world, owns 21 manufacturing sites, and boasts more than 125 years of experience. The relative short-term challenge of the pandemic is far outweighed by the many years of success in Bata. Established in South Africa in 1947 and employing 500 people, Bata has strong ambitions for growth.

“We are working on our partnerships with key retailers in South Africa and Africa – that is the big plan,” confirms Wyatt. “There was no real negative news in the past 12-months. We didn’t have to go through any retrenchments or strike action, like other companies, as a result of a strong Covid strategy. If we had retrenched, we would be in a much more difficult situation now with having to search for new, inexperienced staff.”

From an already strong footing, Bata will look to climb into new categories, harnessing the strength of its existing lines to introduce retail partners to new brands from the global Bata portfolio. This will mean continuing to manufacture locally but adding importing and wholesaling of alternative products, away from the core markets of school shoes and industrial safety footwear with PPE.

“This plan involves us partnering with South Africa’s leading retail chains to win shelf space within these chains for Bata’s portfolio of brands, which we call the Global 7. This includes brands such as North Star, Power, Bubblegummers, Weinbrenner, Comfit, Toughees, and Bata Industrials. While doing this, we don’t want to lose focus on our core business and we are still very much focused on our core categories as well as being a local manufacturer. Post-Covid, there is a lot more emphasis and willingness to start reinvesting in systems and the back end of the business,” explains Wyatt.

New brands means a whole new level of support required to deliver for retail customers. Ordering, processing, logistics, marketing and more will all be boosted by investment into new systems, reducing the need for outsourcing and retaining strict control over quality.

“We are launching a new ERP system in Africa and we have just launched SAP HCM (Human Capital Management) for our HR department. We have launched a new warehouse management system, and we have launched a direct-to-consumer ecommerce platform.

“South Africa is now the regional hub for Africa for Bata in terms of IT. It is all about setting the business up for the next five years,” says Wyatt, adding that a new structure has been formed within the business including new leaders in sales and marketing, fresh designers in the footwear team, and a new head of sneakers to focus purely on athletic products from Bata.

PERFECT FIT

Coming out of a challenging two years, there are many hurdles that linger for businesses searching for growth. The economy is still slow, investor confidence is weak, and consumers are battling against inflationary pressure and increasing interest rates. Globally, political landscapes are changing, and logistics and supply chains remain challenged.

But Bata in South Africa was quick to put in place strict protocols to protect the business from external issues, and this focus has remained. Controlling everything within its remit, the company continues as a beacon of quality manufacturing in the country, and endlessly displays ethical and sustainable business management.

“We were very focussed on cashflow as we never knew what was around the corner. We will never lose sight of that, but the environment is now much more conducive for us to seize opportunities,” states Wyatt. “I think that the retailers themselves have changed their outlook and they are all coming out after Covid and facing global logistics challenges, inflation, the war in Europe. In South Africa, we had the riots in 2021 and the floods in 2022, we also have record loadshedding and a number of economic challenges to overcome, and within this environment retailers are looking for points of differentiation and they are all looking for opportunities. As a global retailer, we can offer our customers in Africa products, brands, and learnings from the rest of the world that they wouldn’t necessarily get from elsewhere or from other local brands. These partnerships will be key for us going forward and will be mutually beneficial as we are not interested in only wholesaling a brand; we really want to partner with retailers and offer them something different and exclusive while in return helping both to grow business.”

The country’s big retailers have boomed in the past 12 months, with reports suggesting that the top brands in the country grew by more than 20% collectively, opening new stores and building new digital capabilities to the delight of customers. If Bata can strike significant and sustainable partnerships with South Africa’s retailers – especially those active on the continent – increased market share should quickly become more attainable.

“The South African manufactured product is a huge part of it, but this strategy will also take into account more of an import arm as well. There are certain brands that we can’t manufacture in South Africa – for example, sports shoes as there are certain technologies that other countries have mastered. We will continue to offer a high percentage of our total output from local manufacturing but we will grow by bringing other brands in from Bata internationally,” Wyatt says.

As this strong and busy company prepares for an exciting period of long-term growth, it is now clear that all steps are moving forward and the road ahead is full of opportunity. A new strategy, a new structure, new technologies, and new partnerships will all result in further joy for customers around South Africa, and all over the continent.

“The last two years have been cautious and focused on our core business but we are now looking at an expansion model, with more risk, where we will invest in the brands, back end, staff, and lay the foundations for stepping forward through to 2027,” concludes Wyatt.