The luxury brand, which launched its childrens wear recently, has not budged from its top-end positioning even in Tier 2 cities
A few years ago, Mohan Murjani gave up the franchises of Gucci and Jimmy Choo in India as sales failed to match the expected demand for luxury goods in India. But things have changed since then.
Murjani, who brought Tommy Hilfiger to India in 2004 in collaboration with Arvind Brands, seems to have struck gold finally, as the premium fashion brand’s sales have been rising 50 per cent annually. Reason: increasing incomes even in Tier 2 cities and Murjani’s refusal to dilute the brand’s premium image, unlike some of his competitors.
Company officials say the positioning for all its products is clear: if any global brand wants to be successful in India, it will have to provide a truly international offer to consumers – same price, same collections, same store interiors and same international service standards. In short, global luxury brands have to deliver the global brand promise to Indian consumers consistently, without any local dilution.
That’s the positioning Tommy Hilfiger is clinging to even in its latest foray into childrens wear – no wonder, all clothes have the brand’s “Classic, American Cool” signature.
The target consumer is clear: regular users of Tommy Hilfiger who were buying clothes for their children from abroad as they are not happy with offerings from local brands. In the second stage, the company would target consumers upgrading from local brands to international quality offerings.
The estimated childrens wear market in India is Rs 3,000 crore and is growing at 30 per cent annually. “The segment has finally reached a threshold opportunity,” says Shailesh Chaturvedi, CEO and Director of Tommy Hilfiger (India). After doing its research on the segment, the company saw a large gap at the premium end of the kids segment, Chaturvedi adds.
Tommy Hilfiger plans to open 100 shops in the childrens wear segment, which would be a mix of exclusive brand outlets and shop-in-shop across the top 24 cities in the next two years.
“We were clear from the beginning that our stores would offer imported children wear. The response to our products and our growth in the category clearly reaffirms our strategy and the vibrant demand for this segment,” Rao says.
The premium positioning doesn’t mean the fashion brand will restrict its presence only to the top cities. For example, the company is already present even in places such as Benaras, Indore, Nagpur and Dehradun where it is growing at 50 to 60 per cent year-on-year. “The purchasing power in the smaller markets has improved significantly,” Rao says.
That belief has led the company to bet big on its accessories business as well. Tommy Hilfiger plans to set up over 500 accessories stores (clothes, perfume, watches) in the next five years.
For apparels, the plan to is to almost double the number of stores from the current 1,000 in 98 cities as a McKinsey study suggested that revenues of apparel companies in India will more than double to $55 billion.
Tommy Hilfiger was launched in April 2004 and has a turnover in the range of Rs 160 crore. The company is now looking at a 60 per cent growth for the current year. Going forward, the company expects its children’s range to contribute as much as 10-12 per cent to the overall business while footwear could contribute about eight per cent. The balance will come from apparel and accessories.
