NEWS FROM AROUND BATA WORLD WEEKLY DIGEST. Bata World Digest August 26, 2016 INTERVIEWS. Q & A with Luis Pinto

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1 WEEKLY INTERVIEWS Q & A with Luis Pinto Luis Pinto is country manager of Bata Mexico, and has been with Bata for many years. Bata World News interviewed him to hear about his experiences with the company, and his current projects in Mexico. BATA IN THE NEWS CORPORATE PRODUCT Bata in the News: History of the Bata Shoe Museum Bata Indonesia Hosts Product Knowledge Training Course Bata Best Sellers: Ladies Casual Shoes Popular in Vietnam We Are Bata People: Emmanuel Wullens Sends In a Selfie Participant Feedback from Bata Training Academy Courses in Malaysia Latam Asia-Pacific South Asia Bata Best Sellers: Alvaro Is Key Product in Peru Bata Malaysia Wins Prestigious Brand Award Bata India Adapting Store Expansion Strategy New Exhibition about Tomáš Baťa Opens in Prague

2 INTERVIEWS Q & A with Luis Pinto Luis Pinto is country manager of Bata Mexico, and has been with Bata for many years. Bata World News interviewed him to hear about his experiences with the company, and his current projects in Mexico. You joined Bata 37 years ago. How has the company changed over that time? around the world: that is exciting and challenging at the same time. work on it, and it s necessary to invest in it continuously. Yes, it was a long time ago. In my view the company changed from manufacturer orientation to commercial orientation, and that is positive because today we need to serve our customers with good products, a strong brand, very competitive prices and the best service. There are many competitors trying to do the same, but there are somethings we cannot change or forget along the way: that we are shoemakers par excellence. Which of the Bata Core Values would you say best describes your management style? What projects are you currently working on? What initiatives have you recently implemented? How are you enjoying your role as country manager of Mexico? Almost every day is a challenging situation. It s a huge, competitive market, with so many shoe companies, a protective market for local manufacturers, big retailers, all of which takes a lot of time to deal with. I have been here three years and time has passed very quickly, but it doesn't seem that way. I have developed a good relationship with the local team, which makes me comfortable and motivated to lead this team and try to improve the situation of the company. What is it about Bata that has kept you here for such a long time? I have had the opportunity to work for different companies, and Bata is special in terms of its company culture. I had the opportunity to study at Bata Technical school, where I learned shoe manufacturing and management of the shoe industry. Then I improved my knowledge through daily experience, growth inside the organization, and the diversity that provides the opportunity to exchange experience with many colleagues I believe that all of the Core Values are present in my management style, to a certain extent, but if I had to choose one, it would be Be Bold. What are the most important trends in Mexico at present? Mexico is a huge market, with a wide variety of product offerings. It is a great opportunity to organize and develop the company, as the market is very attractive for big retailers and catalog companies. Influenced by the USA market, they demand high standards of service, innovative products, branded products, and a fast supply chain: 80 percent of the local consumption is made locally. The trend is to be innovative if you want to be a leader in certain areas of the market. Are there any particular challenges you face in the region? How do you overcome them? As I mentioned before, big retailers or catalog companies in the country have enough power to create their own brand or label. We are in the wholesale business and need to be alert on how we promote our brand, making sure we have innovative products, competitive prices and a good service. We are lucky because the most important brand in the children's footwear market is Bubblegummers. The company developed an extraordinary marketing campaign over 18 years in the most famous children's TV show. We continue to We recently began to work on the development of local sourcing, utilizing machines and equipment from the Calpulalpan factory. We need to have good supplier support, and that is our main priority today. How important are e-commerce and loyalty club schemes in Mexico? It s important in the market, but not 100 percent for us, because we are in the wholesale business. It is more difficult to create a loyalty program as we don t have direct contact with the end user. We are working with e-commerce partners where we promote our brands, and we have a presence on social media and marketing channels, trying to create a relationship and loyalty with the followers of the Bubblegummers brand. What is the best piece of advice you have ever received about your job? The best piece of advice came from my parents: Be honest, persistent, empathetic and most importantly listen and learn from others. Be humble in success and do not show arrogance. How would you like to see Bata Mexico develop in the coming years? To become leader in the children's shoe sector, icons in the full-plastic market such as in safety gumboot footwear. We have the potential, knowledge and people, and I

3 Q & A WITH LUIS PINTO will feel very proud to hear that Bata Mexico is profitable and well-recognized in the Mexican footwear market again, because we work very hard in order to return the company to the right position.

4 BATA IN THE NEWS Bata in the News: History of the Bata Shoe Museum On August 11, the Toronto Star newspaper published an article by Carola Vyhnak about the origins of the Bata Shoe Museum, and founder Sonja Bata's struggle to make it happen despite mountains of red tape that threatened to block the project. Below is an edited version of the original article, which can be found here: You wouldn't want to walk a mile in Sonja Bata's shoes. With more than 13,000 pairs in her collection, you'd end up halfway around the world. And they're not all designed for easy ambulation, although all walks of life are represented, from 200-year-old chestnutcrushing clogs to Elton John's silver platforms. For the past two decades, the collection has been housed in the Bata Shoe Museum at Bloor and St. George Sts., but it was an uphill climb to get it there. Attempts to establish the first museum of its kind in the Western hemisphere became so entangled in red tape, Mrs. Bata contemplated putting it in Europe. But I'm a Torontonian, she told a Toronto Star reporter in I want to give this to Toronto it would be such a boon to the city. Shoemaking was a very important part of Canada and people should know about it. So she dug in her heels and five years later opened her privately funded fivestorey showcase. Mrs. Bata's passion for shoes kicked in during frequent business trips with Thomas, shoemaker to the world, who died in Some people buy yachts or Rolls-Royces. But my husband and I couldn't care less about that, she told the Star's fashion editor Bernadette Morra in Shoes are the most exciting artifact. They tell you more about human beings, the way they lived, their climates and their history. In 1979, the couple established the Bata Shoe Museum Foundation and Mrs. Bata began her quest to build a permanent home. Various locations were considered then rejected including Harbourfront and a proposed luxury hotel near Bay and Bloor Sts. But with three historic houses standing in the way, some councillors objected. At that point, Mrs. Bata's plans had been mired in bureaucracy for eight years, but Mrs. Bata had both feet firmly on the ground, maintaining that no public funds would be required for the self-sufficient museum. Plans were finally approved for a 39,000-sq.ft. building at Bloor and St. George, designed by architect Raymond Moriyama to look like a shoebox. In 1995, Mayor Barbara Hall proclaimed May 6 to 13 Shoe Week and The Bata Shoe Museum opened. Praising the 9 million US dollar building's spaciousness, sunlight and translucence, the Star's architecture critic Christopher Hume called the museum the best thing to happen to Toronto for some time. With more than a thousand items spanning 4,500 years on display, exhibits since then have ranged from Apollo astronauts' space boots to Inuit slippers made of duck skins and Shaquille O Neal's size 23 basketball shoes. A decade later, it was a pair of priceless bejewelled slippers that made the news when they took a walk in the hands of a thief. The footwear, once worn by Indian royalty and insured for 160,000 US dollars, was precious to Mrs. Bata, she told the Star's Haroon Siddiqui, because they gave a glimpse into the richness of that old culture, and also the glorious and superb taste of the people of Hyderabad. The theft sparked citywide sole-searching, thanks to a 25,000 US dollar reward offered by the Bata family. A month later, a photo shop recognized the stolen slippers in photos it had printed for a customer, and the culprit was caught. Shoes still give Mrs. Bata a lift although these days she's a tad fearful of heights. After a couple of broken hips, I don't have much choice, she told Toronto Life in But I'll always love a great pair of heels. They boost your confidence.

5 CORPORATE Bata Indonesia Hosts Product Knowledge Training Course From August 15 to 19, the Bata Training Academy of Asia Pacific organized a second session of the Product Knowledge training course in Indonesia. The course was run as part of the Bata International training program to improve product selection skills for buyers, as well as improving product knowled... The course was facilitated by Jim Livingstone, BTA facilitator, who was assisted by a number of the Bata Indonesia team including: Dekaberis Subahagia Adi Purnomo, chief design consultant; Ari Kusharjanto, chief designer; Kenny Viranda Julyan, creative designer; Dhani Wasistha Yudanarko, technical designer; Ahmad Danial, costing manager; Erna Setiawaty, chief chemist, and Lilik Budi Setiarto, factory manager. The Bata Indonesia management team was represented by country manager Imran Malik, HR manager Ricardo Lumalessil and production manager Hameed Qadir. The theory portion of the course took place in the Bata Indonesia offices in Jakarta, and the practical element was held at the company's Purwakarta factory, where participants had the chance to put what they had learned into practice and make their own moccasin shoes. A total of 13 participants attended the course from Indonesia, Malaysia, Singapore and Thailand. Product Knowledge is a highly participative and engaging four-and-a-half-day course that is designed to help buyers make better buying decisions by providing them with a solid understanding for every aspect of shoemaking, from understanding materials, the principals of design and shoe construction methods to various manufacturing processes. The aim of the course was to help participants demonstrate an understanding of different footwear materials, different components of a shoe and different construction processes, as well as an understanding of how to draw a shoe, different types of lasts, how to draw a pattern on the last, how to transfer the last design and draw the last on the pullover. Course attendees also learned about quality assurance and control processes, in terms of material testing and overall product quality, along with how to define material costs and total cost of product. Malik commented: Each buyer is responsible for their new articles and they have to prepare a description about the material, the construction of the shoe and two to three benefits for the customer and then communicate it to the sales people. This element is important, and that is why the course is very important for the buyer to learn about the product. This is an opportunity for everyone to be more open, and after this course you will be able to return to your respective position with better product knowledge than before: and that will contribute to the success of the collection. Michelle Yao Zhi-Han, a merchandiser from Bata Singapore, added: This is a very good course to learn about the manufacturing process. I like how hands-on the classes were, and that we got to visit the factory and see all the processes first hand. A valuable course for everyone in the footwear industry!

6 PRODUCT Bata Best Sellers: Ladies Casual Shoes Popular in Vietnam The casual ladies shoe from Bata Vietnam is already one of the most popular models in the country with its target market of fashionconscious young women. Despite the fact that it was only introduced in January of this year, early signs are very positive, as the shoe has seen a 95 percent sellout ra... The shoe features a soft PU upper and TPR outsole, making it easy to wear in a wide variety of situations. Its trendy design makes it attractive to the target market of fashion-conscious young women, and the model's excellent fit means that it can be worn all day without problems. The Bata ladies casual shoe is available from stores in Ha Noi, HCM City, Quang Ninh, Nha Trang, Da Nang, Can Tho, Binh Dương, and Dong Nai provinces. Vu Thi Kim Dung, vice director of Thanh Bac Pacific, commented: "The reason for the success of this shoe is the fact that it is the right product, at the right price, with the right timing."

7 PRODUCT Bata Best Sellers: Alvaro Is Key Product in Peru Bata Peru launched its Alvaro men's shoe in 2007, and it has since become one of the most important products in the country's range. With a simple yet classic look, it appeals to men across its target group as a perfect shoe for work or other situations when they want to look their best. The shoe is made locally in Peru, and sold in all Bata stores across the country. The target market is men aged 25 to 40, who typically wear the Alvaro with work outfits. The Alvaro's upper is made of full-grain leather, and the sole is PVC, giving the shoe a refined classic look. The materials and construction also offer excellent durability and comfort, while still maintaining a good price point. The recipe is working as the company sold approximately 8,300 pairs of the Alvaro in 2015, thanks to the quality of its materials, its accessible price point and its superior wedge. Joselyn Yong, retail manager of Bata Peru, commented: "Alvaro is a product of much value in the line of leather men's dress shoes as it offers many benefits such as durability, comfort and value."

8 CORPORATE Bata Malaysia Wins Prestigious Brand Award Bata Malaysia recently received a bronze award at the renowned Putra Brand Awards, also known as the people's choice awards, highlighting the fact that Bata is one of the most respected companies in the country according to consumers. The Putra Brand Awards is the premier brand awards in Malaysia, organized by the Association of Accredited Advertising Agents Malaysia (4As). It is endorsed by Matrade, the Malaysia External Trade Corp, and supported by the Branding Association of Malaysia, the Malaysian Advertisers Association and the Media Specialists Association. The award is chosen by consumers who patronize retail outlets in Malaysia, and awards are given across a range of different categories. In the apparel and accessories category, Bata was awarded the bronze trophy. Bata was the only shoe brand selected for the final, as silver and gold went to brands not related to shoes. Selection for the awards is based on five criteria: key challenges faced by the company in the current economic environment; volatility of the local currency impacting marketing efforts; how the company is positioning itself in terms of branding to remain relevant; strategies that have been put in place to boost the company s brand image and key success factor of the brand. Paolo Grassi, country manager of Bata Malaysia, received the trophy, which was presented by the president of the association, at a gala dinner held at the Majestic Hotel in Kuala Lumpur. He had the opportunity to mix with top representatives from the retail industry and other important guests, and exchange business ideas with a variety of industry players. Congratulating the team for their achievement, Grassi highlighted that despite the competition in the market, Bata has been the only shoe brand chosen by the consumers and winning such a prestigious prize. He commented: It s an outstanding achievement for all of us, and a great recognition for the job done in the last two years to improve our brand image and customer awareness. The trophy is now on display in the reception area of the Bata Malaysia head office.

9 MARKET TRENDS Bata India Adapting Store Expansion Strategy Bata India recently announced that it is in the process of altering its policy of opening 100 stores annually, deciding instead to concentrate on boosting store profitability. It will also look to open up new sales channels in order to strengthen online sales. The footwear manufacturer is also focusing on improving productivity at its manufacturing facilities, while introducing marketing initiatives such as creating wedding and festive collections. Uday Khanna, non-executive chairman and independent director, told shareholders that in view of the increased challenges from international footwear giants and local players, including the unorganized sector, the company has changed its strategy of opening 100-plus stores every year, and is now concentrating on samestore growth. Rajeev Gopalakrishnan, President of Asia South, commented: Deeper and wider penetration of high-growth markets through differentiated product lines, focusing on style, comfort and wow pricing, as well as increasing the productivity of the manufacturing units are the key tenets of the company now. Gopalakrishnan also expressed his positive opinion of the new winter collection, which will help boost margins. He continued: The company s key focus is to grow in double digits and scale up margins going forward. I am sure that it is going to improve, because the collection we are launching in the autumn is also going to feature extremely good products, particularly focused on women. This is with better margin, better product, better price and better styling. So, you will definitely see this is also going to add in the next two quarters in terms of our profitability. He added: Also when we say premium, it is looking at our internal brands like 'Bata the Brand' itself. We are premiumizing in the top stores, with a complete leather-shoe collection with leather outsoles and improvements like that. However, in terms of ladies, we are moving into more contemporary styles, better price points and more fashionable shoes which are going to be part of the ladies contemporary range. In addition to its partnership with major ecommerce players, Bata India is also trying to boost its own online sales by offering differentiated products. It is aiming to increase the share of its digital business from 1.5 percent of total sales to 5 percent in three years.

10 INTERVIEWS We Are Bata People: Emmanuel Wullens Sends In a Selfie Emmanuel Wullens works for Bata Peru, and recently took a selfie with his team to give the rest of the Bata world a glimpse into their daily working lives. Bata World News spoke to him to learn a little about his role and what he enjoys about his job. How do you fit into the Bata world? I'm the IT manager for Bata Peru, and we work hard to be a strategic team, helping our users to achieve their objectives. Who is in your selfie? From the left: Jhonny Baca, David Mendoza, Carlos Quinto, Cesar Garcia, David Gutierrez, Daniel Mendoza, and Sonny Saenz. What does it show? What is the story? It shows the Peruvian IT team taking a break together with a nice team spirit. What do you like most about your job? I like the fact that I can be part of almost every project, and can work with each department, learning from everyone. Want to send in your Bata selfie? Just a few photos you take of yourself, alone or with colleagues, to bwn@bata.com. Show off your creativity! Photos must be horizontal, and be sure to use the largest file size allowed on your camera or phone.

11 CORPORATE Participant Feedback from Bata Training Academy Courses in Malaysia Tommy Z. Khairully works for the Bata Group and recently attended a training course at the Bata Training Academy in Kuala Lumpur, Malaysia. Bata World News spoke to him to learn his opinions about his participation, and what he found most useful about the course. What is your role at Bata? And what did you most enjoy? I am operations review manager for the Bata Group. The various activities during the training, such as the roleplay during the Bata 5 Step section. Which training course did you attend and why? I attended Improved District Performance, in order to get more knowledge and understanding about the company and retail operations, such as the Bata 5 Step, customers and product knowledge. Did you meet a lot of new Bata people on the course? Yes, I met a lot of new people, especially district managers and area managers from Bata Malaysia and Bata Indonesia. What was the most important part of the program in your opinion? All the subjects during the training are important, but the most important part of the training is on how to understand the customer, including the Bata 5 Step and product knowledge. What was the most surprising thing you learned? Product knowledge! This part was the most surprising for me: learning about shoe types, styles, characteristics, footwear materials as well as their benefits. To know and understand the product is an essential sales skill, as it allows you to present the benefit accurately and persuasively. Customers are more likely to trust sales people who show confidence in themselves and what they are selling. What would you like to say to the course organizers who prepared and ran the course? Thank you for the great job! It was a great training experience for me, the contents are sufficient and balance between theory and practice.

12 Powered by TCPDF ( CORPORATE New Exhibition about Tomáš Baťa Opens in Prague On August 2, a new exhibition, The world of Tomáš Baťa, opened at the Grevin Museum in Prague, thanks to collaboration between the museum and the Thomas Bata Foundation. The exhibition, which will last until the end of October, offers a unique opportunity to take a photo with a wax figure of Tomáš Baťa in a replica of his office. Visitors can even try on a replica of Bata s distinctive hat. The exhibition also offers a collection of international Bata posters, contemporary advertising material and interesting presentations about lesserknown details of Tomáš Baťa. Pavel Velev, Director of Thomas Bata Foundation, commented: "I am very pleased with this project because Tomáš Baťa is not a celebrity you would normally expect in a wax museum. I believe this is a great way to bring Tomáš Baťa closer to people." Gabriela Culik Koncitikova, co-creator of the exhibition, added: "Baťa s legacy is also presented in a playful way for children to color in a cartoon called 'How Tomáš Became the King of Shoes,' or play a game of 'Pilot Tomas Bata,' which is an exact replica of a game from the 30s. Visitors also have the opportunity to try to make a shoe using a boot tree. The Grevin Museum also has another connection with Tomáš Baťa beyond his wax figure and the new exhibition. The museum is located in a building designed by renowned Czech architect Josef Goncar, and the building was previously a Bata shop.