Hip Western Fashions Hit India
Topic Global Marketing
Key Words Foreign licensing, partnership, international economic environment, social-cultural environment, political-legal environment, entry strategies, international product strategy
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News Story 

Western fashions are hitting India at an ever-increasing pace. Until recently, the Hilfiger label, known in the U.S. since the 1980s for its sporty, all-American clothing, had not been available in Bangalore or any stores in India. Since 2004 however, Indians are increasingly wearing Hilfiger and other top American fashions as a result of global licensing contracts between American apparel companies and India's Murjani Group, a 77-year-old apparel, manufacturing, and shipping business. Today there are 10 Hilfiger shops in India; other Western fashion brands, from Gucci to Jimmy Choo, are set to enter the Indian market in the next year.

Murjani Group, an India-based company, established a marketing presence in India only recently. In 2000, after rapid growth occurred among India's consuming class, Murjani was quick to see opportunity and subsequently opened eight free-standing Tommy Hilfiger stores across six cities. Murjani, in partnership with some of India's most respected organizations, has since launched multiple licensed categories including eyewear, watches, shoes and fragrance.

Murjani Group's entry into its native market after 2000 appears to have been well timed. With India's GDP growing at 8% annually, the ranks of wealthy, well-traveled executives with income to spend on fashionable clothing are swelling. The estimated number of Indian millionaires is increasing by 13% each year; in 2006, the nation had approximately 83,000 citizens with liquid assets of more than $1 million, up from 71,000 in 2004.

Despite India's growth as an emerging market, some analysts wonder whether a country that is embracing globalization without abandoning its own cultural traditions will desire Western brands. Gucci, Calvin Klein, Jimmy Choo, and Tommy Hilfiger may be hot brands in the West, but some observers think that the West's fashion sense is too removed from Eastern living to have widespread appeal among India's over 1 billion citizens.

Questions
1.

Why do Western apparel brands like Tommy Hilfiger enter into foreign licensing agreements with India-based Murjani Group to sell merchandise to India? Wouldn't it be more profitable for them to set up their own retail operations in the country?

2.

Do you think the people of India will welcome Western fashions like Tommy Hilfiger, Calvin Klein, and others? Why or why not?

Source Reena Jana, "India: Bridging the Fashion Culture Gap; Apparel company Murjani Group is leading the charge, bringing Western labels such as Tommy Hilfiger and Calvin Klein to Indian shoppers," Business Week Online, Feb 5, 2007 pNA
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