German denim brand Mustang has entered India via an exclusive retail tie-up with Shopper's Stop, which has already launched the brand at its outlets in Hyderabad and Mumbai, and intends to take it to Delhi and Bangalore shortly. Mustang's entry into India is a part of the company's effort to move beyond its core markets of Germany and East Europe. Mustang Group CEO Theo Birkmeyer was in Mumbai to unveil the brand at the Juhu property of Shopper's Stop. He spoke to Viveat Susan Pinto. Excerpts:
What took you so long to get into the Indian marketplace? Your rivals such as Levi's and Wrangler are already here.
We prefer studying a market before getting in. We felt this was the right time to get in. So here we are. India is an important market. So is China. We've opted to come to India with a partner. In China, we are going alone. Operations there will be launched by April next year. So yes, we are moving fast. At the moment, we do not have an Indian subsidiary with whom our local partners can deal with in procuring merchandise. We intend taking care of that by launching an Indian subsidiary next year. Though it seems we are late, I think we are making up for it by moving fast. That should help us.
What is the price range at which Mustang will be available here?
Mustang is a mid-to-upper-mid-market brand. Our pricing in the markets where we operate reflects this brand positioning. We are not likely to deviate from this in India too. Our entry-level price will be Rs 1,500. Our core offering will be in the Rs 1,900-range and our premium offering in the Rs 2,400-to-Rs 2,500-range. We will have both men's and women's wear. But the accent is clearly casual wear. We do not operate in the formals or semi-formals space.
Do you have any plans to get into the formals or semi-formals space in the future?
Not at all. That is not what we are good at. Denim is what we specialise in and we would like to stick to that. The acceptance of denim as something that can be worn on formal occasions has gone up considerably across the world. It’s fashionable to wear denim for formal occasions. I see this trend picking up in India as well. That excites me because this segment has potential here.
Any plans to increase your hubs as you expand your global footprint?
Yes. As we expand our footprint in Asia, we will set up a second hub in Singapore. Currently, the only hub we have is in Hong Kong, where we've set up a sourcing and distribution company. On the European front, we intend making Russia our hub. Currently, our home turf of Germany takes care of requirements in the region. But we do not intend stopping there. The East European markets such as Romania, Poland, Hungary, Ukraine can be serviced out of Russia too. We intend setting up a hub in Russia shortly.
What is the proportion of business coming out of Germany. Do you think your globalisation strategy will help derisk your business sufficiently?
Germany contributes to 45 per cent of our business at the moment. The rest comes from exports to allied markets. The proportion should change over time though. We expect the contribution of exports to go upto 70-75 per cent in the next few years. So Germany will be an important market, but one among others. So if you are asking me whether the dependence on Germany will go down over time, to a certain extent, yes. It will continue to be a key market for us though. Don't forget, we were formed way back in 1932 in Germany. Our brand awareness in that market is as high as 89 per cent. So the importance of Germany in our scheme of things cannot be ruled out at all.