Global brands slash prices to woo small-towners
International fashion brands such as Mango, Guess and Puma are also changing their pricing strategy to cash in on the price-sensitive consumers in smaller towns.
By Shruti Sabharwal & Urvashi Jha, TNN |
BANGALORE: “Lower Prices Are Here To Stay” said the new branding campaign of Marks & Spencer, a few months ago. However, it is not just Marks & Spencer, which has lowered its prices by 35% in the last few months. Other international fashion brands such as Mango, Guess and Puma are also changing their pricing strategy to cash in on the price-sensitive consumers in smaller towns. Sources say these brands have rationalised prices in the range of 10-15 % in last the 18 months, particularly at the entry price points.
When the international brands forayed into India they positioned themselves at the higher end of the market. However, these retailers are now expanding their product portfolio at the entry price point segment to generate volumes. Depending upon the category, the entry pricing is now anywhere between Rs 300-899. All these brands operate in the premium category which is around Rs 1,400 crore and growing at 30%.
Also, having achieved considerable visibility in the metros the international brands are aiming to achieve critical mass by expanding their presence in tier II cities. “We are introducing cheaper footwear and apparel as we increase focus on the bottom of the pyramid.
These products, however, will not be sold through our standalone stores, they will only be available through our distributors. A basic T-shirt will start at Rs 499, compared with Rs 599 in our stores,” Puma Sports India MD Rajiv Mehta said. Puma plans to introduce a new canvas footwear range with competitive pricing of Rs 999. Similarly, women’s footwear is being priced at a range of Rs 399 to Rs 1,000.
Esprit too maintains that it has always had an attractive price positioning in India. However, industry sources say that Esprit has reduced its prices by about 10%. “Right from the beginning we have absorbed the high import duty in our profitability. Our products were never overpriced .
The prices we offer in India are on par with what we offer in Asian countries. Therefore we see no necessity for reducing the prices,” Esprit country head Manjula Tiwari said. Esprit operates stores in tier II cities like Ludhiana, Pune and Chandigarh besides metros.
“These international retailers have realised that Indian consumers are price conscious. In India consumers want to own the brand but at the same time they want value for money,” said Technopak associate director Asish Dhir.
When the international brands forayed into India they positioned themselves at the higher end of the market. However, these retailers are now expanding their product portfolio at the entry price point segment to generate volumes. Depending upon the category, the entry pricing is now anywhere between Rs 300-899. All these brands operate in the premium category which is around Rs 1,400 crore and growing at 30%.
Also, having achieved considerable visibility in the metros the international brands are aiming to achieve critical mass by expanding their presence in tier II cities. “We are introducing cheaper footwear and apparel as we increase focus on the bottom of the pyramid.
These products, however, will not be sold through our standalone stores, they will only be available through our distributors. A basic T-shirt will start at Rs 499, compared with Rs 599 in our stores,” Puma Sports India MD Rajiv Mehta said. Puma plans to introduce a new canvas footwear range with competitive pricing of Rs 999. Similarly, women’s footwear is being priced at a range of Rs 399 to Rs 1,000.
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Another reason for lowering prices is the growing competition with the entry of more international brands. The existing players are aggressively wooing consumers across all segments to beat competition. “Lower entry price points also helps in roping in new consumers in metros, who can then move up the value chain within the brand,” United Colours of Benetton MD Sanjeev Mohanty said. “Considering all our manufacturing is done within the country our price positioning has been sharp from the beginning,” she added. Esprit too maintains that it has always had an attractive price positioning in India. However, industry sources say that Esprit has reduced its prices by about 10%. “Right from the beginning we have absorbed the high import duty in our profitability. Our products were never overpriced .
The prices we offer in India are on par with what we offer in Asian countries. Therefore we see no necessity for reducing the prices,” Esprit country head Manjula Tiwari said. Esprit operates stores in tier II cities like Ludhiana, Pune and Chandigarh besides metros.
“These international retailers have realised that Indian consumers are price conscious. In India consumers want to own the brand but at the same time they want value for money,” said Technopak associate director Asish Dhir.
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