Havaianas continues to reinvent itself in APAC amidst sustainability push
Recently, Havaianas, the Brazilian flip-flop brand, pledged to collect and recycle 10 per cent of the flip-flops it sells in the Asia Pacific region by 2030 as part of its ReCycle initiative. Havaianas said the move is part of a broader strategic goal towards achieving a more sustainable future. By 2030, all of the brand’s mono-brand stores in Asia will have collection boxes, making recycling flip-flops easy for customers. Earlier this year – despite the impact of Covid on cross-border trave
travel – Havaianas’ parent company Alpargatas reaped the rewards of a three-year-old international expansion strategy, reporting revenues of US$739 million, a 25.7 per cent increase over 2020. Outside of its home market of Brazil, net revenue increased by 41.5 per cent to US$227 million.
The story so far
In January 2018, the first corporate office for the Havaianas brand was established in Hong Kong. Before then, the brand did not have a presence in the APAC region. The products were being distributed entirely through independent networks in the region at the time.
“We opened a subsidiary in China in 2019. We have 10 people in China, 30 in Hong Kong, and around 285 stores in the APAC region. Our major areas of expansion have been in the Philippines, Indonesia and Thailand,” Robert Esser, Alpargatas APAC president, told Inside Retail.
Esser revealed that there are more than 4000 points of sales in the APAC region. The company has bounced back from the dip in sales during the pandemic, and is on track to deliver growth as the company returns to pre-pandemic levels of commercial success.
While air traffic and tourism have picked up in markets like Singapore and Hong Kong, the brand’s sales in markets like Bali and Phuket are still less than half of what they were during the pre-pandemic times.
“Our brand is very strongly linked to beach-going activities, tourism, resorts and holiday travel in general. So the fact that air traffic in Hong Kong is at 14 per cent right now, and with Singapore at 61 per cent, we still have challenges ahead of us,” Esser noted.
Interestingly, 2020 and 2021 were relatively good for the brand in China. The company has a robust presence in the online space in the country. Esser noted that the brand is sold on major platforms like Tmall and JD.com.
“We have quite a large market share in the flip-flop segment in China. We pretty much define that segment just like we do almost anywhere else in the world, in fact. Flip-flops are generally around $15 to $18, and we tend to be 50 to 60 per cent of the marketplace globally,” he said.
Esser said that in markets like the Philippines and Australia, the brand has around a 90 per cent market share.
The intangible factor
There is something inherently unique about the Havaianas brand. It has a huge range of licensed products that capture the zeitgeist of current trends, big-budget movies and entertainment franchises like Star Wars and Marvel Entertainment.
“This intangible element around the brand makes the whole experience significantly greater than the sum of the parts. The company itself is extremely old and authentic. It was founded in the 1880s, and it’s the oldest company on the Brazilian stock exchange,” Esser added.
Every pair of flip-flops manufactured in Brazil goes through at least 40 pairs of hands in a very labour-intensive process that is totally manual, and no automation is involved. High-quality rubber is used and built to be grippy in wet conditions.
“We’re now moving quite heavily into slides and sandals. Over the next two years, you are going to see a lot of slides and sandals coming out with very interesting designs and colours. In a lot ways, the brand is inherently one that makes people happy and smile,” he noted.
Esser observed that Europeans in particular have a very strong affinity for the Havaianas brand. When summer finally comes, most people want to use their favourite pair of flip-flops to frolic on the seashore and enjoy the good vibes.
Sustainability is key
Currently, the brand has a zero scrap manufacturing process, and in fact, it has had one for decades. Esser’s ultimate goal is to have collection boxes for flip-flop recycling in all stores. The goal is to recycle at least 10 per cent of the products it sells by 2030.
“The ideal goal for a circular economy would be for customers to simply return their flip-flops to a store when they buy a new one, and we use all the materials from the returned product commercially and profitably to make new flip-flops,” he said.
The brand sells around 270 million flip-flops per year the world over, with around 10 million being sold in the APAC region. So even recycling one per cent of the flip-flops it sells in the APAC region could still garner at least 100,000 pairs a year.
Last, but certainly not least, the brand has dabbled in the metaverse and the NFT space, and Esser believes these initiatives are just ‘baby steps’ as he believes that ‘offline activations’ are key to the brand as it tries to increase its market share the world over.
“Where we do a really good job is our offline activities. From the World Surf Leagues to the rainbow at Sydney’s iconic Bondi Icebergs pool, we’re all about unplugging, switching off and putting on a pair of Havaianas and walking outside,” he concluded.
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