Why startup D2C Plaeto focuses on school shoes
Parents and teachers want kids to stand up, but little attention is paid to the black lace-up shoes bought every summer at back-to-school shopping.
“It’s usually about getting a pair of bigger sizes because kids’ feet keep getting bigger,” says Ravi Kallayi, co-founder and CEO of shoe startup D2C Plaeto.
But would they agree to be in their place, six hours a day, day after day?
The question sparked a quest and in 2020 led Ravi to launch Plaeto, a children’s shoe brand, with Sara Kilgore and Pavan Kareti, his colleagues and friends from his nine-year stint at sports shoe giant Nike, based in Portland.
Ravi, who holds an MBA from the University of Pennsylvania, was Nike’s African Market Program Director between 2012 and 2013. He and his co-founders worked on the designs and formula for their first shoe model.
“During this time, we were trying to find a way to make good quality shoes at affordable prices for the African market. We found a way, but the plan didn’t take off within the company,” he recalls.
But the idea lingered in Ravi’s mind; he quickly turned to the children. The team began to develop a few exclusive models, focusing on the “constantly growing feet” of children.
“Children have growing feet. And it is normal for parents to buy bigger shoes. But the strategy is not very good and could affect the feet in the long run as the placement of the feet is not correct while walking, says Ravi.
The 12-member team researched, collected data from over 500 children in India and spoke to around 100 parents.
Plaeto consulted materials and engineering scientists from India, Italy and Taiwan, and developed FitSystem, in partnership with FindMeaShoe, which uses artificial intelligence and machine learning to recommend the best shoes adapted to each child.
Their product line includes a Fitliner, which is like an insole and can be peeled off as the child’s feet grow, giving an extra ½ size and increasing product usage from two to six months.
Ravi says this product does not compromise on fit. The team also developed Plaeto 365, which has a midsole that provides support and comfort and enables long hours of play and racing for at least a year.
These products were launched in mid-2021 as the COVID-19 pandemic delayed sourcing, manufacturing, distribution, and other processes.
The startup also struggled to find third-party manufacturers because their specifications differed from regular shoes. Currently, the products are manufactured in Coimbatore.
The fact that schools were closed due to the lockdown meant sales were low. Ravi and his team decided to use the time to reach out to parents and schools, and started sessions to raise awareness of the importance of good footwear for children.
“It was not an easy task. We had to present our products to many schools and explain the importance of quality school shoes, because children wear these shoes for six to eight hours a day,” he explains.
A few schools allowed the startup to set up booths on their premises, which gave the team a foot in the door.
Plaeto began by selling through school links. It now sells on online marketplaces such as Myntra, Amazon and Flipkart, but the direct-to-consumer (D2C) channel comprises around 15-20% of sales. The rest of their sales come from school reconciliations.
The startup has partnered with around 30-40 schools in Bengaluru and Chennai, and plans to partner with at least 100 schools by the end of FY23.
The D2C brand had approached cricketer Rahul Dravid to be their brand ambassador, but he joined the company as an advisor. The former Indian cricket captain is not an investor in the company.
The path to follow
According to industry reports, the Indian children’s footwear industry is expected to reach Rs 131.1 billion by 2025 growing at a CAGR of 7.7%.
Plaeto currently competes with Liberty, Paragon, Bata, Nike and Puma, among other brands of children’s shoes.
The startup has so far raised $2 million from angel investors, including Mathew Cyriac, former managing director of Blackstone India; Kittu Kolluri of Neotribe Ventures; and Babu Sivadasan, co-founder of Jiffy.ai.
Going forward, the startup wants to focus on metropolitan cities and is considering Delhi, Mumbai, and Hyderabad. The company also sees demand from Tier II and Tier III cities.
By the end of 2022, the company aims to expand its D2C customer base in order to increase its sales from digital channels by 50%.