Bacca Bucci stepped into the tank with an ask for ₹ 2.5 Crores for 1% Equity @ ₹250 Crore Valuation. Make sense.
The company's annual revenue is $5.85M as of Mar 31, 2023.
Good numbers. However, the brand did not have any differentiator.
Now what does that mean? Let's get into the layers to understand why Bacca Bucci didn't bag any investment.
A quick sneaker sneak peek!
The global sneaker market has seen exponential growth in recent years. There is a surge in athleisure trends. People out there are demanding comfortable yet stylish footwear.
Coming to India. It's a burgeoning market with a young and fashion-conscious demographic. Even the giants have been playing on this ground for years.
But does this mean there's no space for the newcomers? We'll answer this later.
Global Footwear Market
Sneakers are also a significant segment of this market. The sneaker culture is at rise. Particularly among millennials and Gen Z. These demographics have transformed sneakers from mere athletic gear to essential fashion statements.
Footwear Market in India
India's footwear market is one of the fastest-growing in the world. Roughly, the Indian footwear market generated a revenue of US$26.06bn in 2024. The market is expected to grow annually by 4.85%.
Is this an unorganised market? Not really.
You can find a mix of players. However, the unorganised players hold a significant share due. Reason being, we have a lot of small-scale manufacturers.
Coming to the organised sector. Even this one is rapidly expanding, because of rising disposable incomes. One factor can be urbanisation too. Followed by an increasing fashion consciousness among consumers.
Sneaker Market in India
Let us tell you, it's massive.
There's a good uptick here. The country's young population is all behind sneakers. There is also a growing fitness awareness. One can even say that there is an influence of global fashion trends too.
According to recent reports, the sneaker market in India is expected to grow at a CAGR of 7.85% over the next five years. And we are sure it will.
Who is dominating the market?
Obviously the international brands like Nike, Adidas, Puma, and Reebok.
But there is ample space for new entrants too. If you are up with innovative designs, superior comfort, and competitive pricing - you can get in.
What is the Market Share of Shoe Brands in India? (A rough picture)
1. Nike: We know, you know - they are doing it right and massive. Nike is known for its innovative designs and high-quality products. The brand holds a significant share of the Indian sneaker market. It comes with a strong brand equity. And the marketing campaigns are also going well.
2. Adidas: Yet another major player. The brand is known for its performance-oriented and stylish footwear. Adidas till date has collaborated with celebrities and designers. The brand is quite appealing to fashion-forward consumers.
Puma and Reebok are also doing well, and they even got a good chunk of the market share!
Now, let's talk about Bacca Bucci!
Bacca Bucci is a homegrown Indian footwear brand.
It came into existence when Natwar Agrawal, a CA by profession, failed to find stylish, durable shoes at reasonable prices.
Then and there, in a four wall hostel room, he decided to set up a shoe brand.
They didn't name it Bacca Bucci first. It happened later, previously it was just another random listing on the site.
Aim? To deliver top-notch products at pocket-friendly pricing. Natwar then met Anuj Nevatia and Bacca Bucci was born.
Are they just into shoes?
Not really. Similar to all other brands out there the brand is offering casual, formal and athleisure shoes. Starting from sneakers, boots, moccasins, and flip-flops, to performance sports specials, you name it, they have it.
Other than shoes, Bacca Bucci even offers accessories like tees, belts and wallets.
The Shark Tank Episode: What Went Down?
Pitch Details:
- Ask: The founders of Bacca Bucci asked for ₹ 2.5 Crores for 1% Equity @ ₹250 Crore Valuation. It was quite a significant investment in exchange for equity.
- Presentation: Everything went awesome. Both the founders pitched the right way. That is - the showcased their product range, shared their vision for expansion, and explained the traction over years (from the launch year 2014, to what happened during COVID, how the sales increased, and how they stepped into the sneaker market).
- Shark Reactions: The sharks acknowledged the brand’s achievements. They had to. But concerns were even raised on the valuation of the brand. How will they differentiate? How will they compete? What's the actual potential of the brand?
Why Didn't Bacca Bucci Secure a Deal? Our honest two cents!
1. Valuation Concerns:
One of the primary reasons for the sharks' reluctance was the high valuation. What we know is - a brand's valuation must align with the brand’s current financial performance. Also, the market conditions and how rapidly the brand will or might grow.
If the financials (revenue, profit margins, etc.) did not justify the valuation, it is risky for investors, normal and sensible maths.
2. Scalability Issues:
Scaling up operations to compete with giants like Nike and Reebok, is honestly not everyone's cup of tea. You have to be best with your supply chain. Your distribution network must be awesome. If you are unclear about both, your brand could be a red flag for the investors.
Questions about the ability to scale production without compromising quality could have been a concern.
3. Market Competition:
Competing against established brands like Nike and Adidas requires a strong unique selling proposition (USP). Sharks, during the pitch felt Bacca Bucci lacked sufficient differentiation. It could be both in product or brand appeal, and it's quite a concerning factor.
Established brands invest heavily in marketing. We all know the Nike campaigns, they “just do it” right and best. Bacca Bucci’s marketing strategies and budget appeared inadequate to create significant brand awareness and loyalty to sharks, and it's understandable.
4. Financial Health and Profitability:
Profitability is a critical factor for investors. Bacca Bucci’s profit margins were thin. The business was profitable, but somehow it didn't attract investors.
Now what can Bacca Bucci do?
1. Reevaluate Valuation:
The team can conduct a detailed financial analysis to set a realistic valuation that reflects their current performance.
2. Work on the Supply Chain:
Invest heavily in supply chain efficiencies. The brand should establish strong distribution partnerships.
3. Differentiation and Innovation:
Focus on creating unique products and a strong brand identity. For example, NIKE Air, and Reebok classic leather shoes. The brand should innovate in terms of design and technology. And that's how they will be able to capture the audience's attention quickly.
4. More Marketing Efforts:
The brand is doing good. But to compete with global giants, Bacca Bucci has to work on their marketing efforts. The brand awareness is still a little less. Influencer partnership right now can help the brand go a long way!
Journey Before and After Shark Tank
Pre-Shark Tank
Before appearing on Shark Tank, Bacca Bucci had already established itself as a promising player in the Indian footwear market.
The brand were known for their innovative designs and affordable pricing. They got a a loyal customer base. They are present on various e-commerce platforms, hence there's a steady sales throughout the financial year.
Post-Shark Tank
While Shark Tank did not result in a deal, the exposure significantly boosted Bacca Bucci's brand recognition.
The feedback from the Sharks helped founders to refine their business strategy. Post-Shark Tank, the brand has continued to grow. The brand has reported 60% revenue growth in FY 2023. They have already expanded their product line, started selling t shirts, trekking shoes, and more. In the years ahead, Bacca Bucci will even open its first ever exclusive outlet.
Right now Bacca Bucci calls itself an affordable brand. But in the coming years, you can see premium products in the brand's product line. And also offline retail, let's see how it all shapes up!
Vision and Goals of Bacca Bucci
Short-term Goals
In the short term, Bacca Bucci aims to:
Expand its product line to include more innovative and sustainable footwear options.
Strengthen its presence in Tier 1 cities while continuing to cater to Tier 2 and Tier 3 markets.
Work on its digital marketing efforts to increase brand visibility and online sales.
Long-term Vision
Bacca Bucci is here to stay. The founders stepped into the market with a vision to make Bacca Bucci a leading global footwear brand. That's why their long term goals (the founders mentioned in the videos online) are:
Expanding internationally, starting with markets in Southeast Asia and the Middle East.
Establishing physical retail stores in key urban centres.
Collaborating with international designers and influencers to create exclusive collections.
Integrating more sustainable practices into the production process to become an industry leader in eco-friendly footwear.
The future of sneaker culture in India looks promising. Disposable incomes are rising. Fashion awareness is spreading like a wildfire. Bacca Bucci, after its shark tank entry (even by not getting a deal) gained traction. People now know the brand. The brand is well-positioned to capitalise on this hype. And we are quite excited to see how the brand will grow in the years ahead!