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By
Reuters
Published
Oct 25, 2012
Reading time
3 minutes
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Wrangler jeans gear up for motorcycle riders in India

By
Reuters
Published
Oct 25, 2012

CHICAGO - VF Corp hopes the strategy will add $1.1 billion in revenue to its Asia-Pacific business over the next five years.


Wrangler F/W 2012/2013

India, with its burgeoning middle class, is a fast-growing market for international brands that want to capitalize on opportunities in Asia's third largest economy.

McDonald's Corp (MCD.N) recently announced its first vegetarian-only restaurant in the country in what many industry watchers say is a sign of how lucrative the market is and how much multinationals are tailoring to local demands.

Coffee chain Starbucks Corp (SBUX.O) also customized its menu for its first Indian store to include more local flavors.

"In India, they understand the western heritage that is appropriate for the brand because the Indian consumer is open to the film industry," VF Corp Chief Executive Eric Wiseman said in an interview, adding that many Indians are familiar with Westerns, unlike consumers in China.

China and India are the two hot destinations for American retailers, with the Chinese market much bigger. But many note that a large English-speaking population exposed to Hollywood and American pop culture makes the Indian shopper easier to target.

"The Wrangler position in India ... is targeted at the premium customer. The brand is aiming to tap into the potentially large segment of young consumers there whose lifestyles relate to jeans and motorcycles," Wiseman told Reuters.

A study by Wrangler in India found most people travel by two-wheelers in the country, as opposed to their American counterparts who drive cars.

Taking into account traffic and climatic differences, VF Corp came up with features like water-repellant material to safeguard mobile phones and wallets, and making the fit of the jeans more motorbike-riding friendly.

The new line of jeans costs about 15 percent to 20 percent more than the average pair of Wrangler denims, Wiseman said.

FROM HORSES TO HORSEPOWER

Wrangler was first sold in the United States in 1947 as "cowboy" jeans and is still a popular choice for heavy-duty wear. The price for a standard pair of Wrangler regular fit jeans for men starts at about $19, according to the company's website, making them an affordable buy.

Globally, the brand fetches VF Corp about $1.5 billion in revenue annually. In India, it currently brings in less than $50 million, CEO Wiseman said.

"It is critical to get local, local, local," said Michael Silverstein, senior partner at The Boston Consulting Group, and co-author of the "$10 Trillion Dollar Prize," a book about the emerging Chinese and Indian middle class.

Silverstein estimated there are roughly 300 million Indians who can buy a pair of jeans for the equivalent of about $20.

That is almost equal to the population of the United States.

Wiseman said Wrangler is developing more products along the same lines that will be introduced in India in the coming seasons.

Experiments in localization are still rare for clothing companies, mostly because they often do not have the scale or distribution capacity, said Peter Wahlstrom, an analyst with Morningstar.

VF Corp is among the few companies that manufactures much of its own merchandise so it has more control over gathering raw material and distribution.

Its India business is expected to grow at a rate of 22 percent annually, while the Asia-Pacific region is expected to increase by 17 percent.

Reporting by Nivedita Bhattacharjee

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