Mango’s new India strategy: open five new stores, rework pricing

Mango, the well known Spanish brand, known worldwide for its nightwear, casual wear, and sportswear among others is now aggressively looking at a global expansion plan. The brand plans to open three new stores a week all over the world in the coming year. At the moment,

the brand has 1,392 stores across the world. “Spain is our biggest market with 280 stores, followed by France, with a 100 stores,” says Isak Halfon, Executive Vice President, International Franchise & Expansion, Mango.
The Rs 10,000 crore global company entered India in 2001, with a franchisee partnership with Major Brands. This year, Mango is looking to add five new stores in India. “These will come up by the first half of 2010. We are looking at Mumbai, Kolkata and Chandigarh for these stores. At Rs 50 crores, India contributes only .47 per cent of our global business. With these five new stores, we hope to reach Rs 100 crores this year,” says Halfon.
Halfon says store opening in India has been slow because of issues relating to higher rentals and landlords changing their terms too often. He feels retailing in India is yet to stabilize. “Business is scattered to malls and high streets unlike in West Asia where most of the business for big brands comes from malls. Moreover, India also has to improve its infrastructure a lot,” explains Halfon.
To build its customer base in the country, Mango is now studying the Indian market seriously. “Understanding the Indian pricing, we have reduced our prices by around Rs 300. A basic jeans for women now starts at around Rs 1,700. We have also changed our policy towards our franchisee. Earlier, he had to buy the stocks from us, now it’s on consignment basis. He pays for whatever is sold and the unsold goods are not his responsibility,” Halfon says. This has given confidence to the franchisee partner and though this is the first season after the change, Mango registered a sales growth of 20-25 per cent.
In 2010, the brand is also looking at being present in large format departmental stores as well. “The idea is to increase awareness about the brand by opening flagship stores and attain ‘critical mass’ by having more stores and larger presence,” he explains. Halfon feels with the new pricing, changed policy for franchisee, rational size of new stores and opening more stores, 2010-11 could well be the turning point for Mango in India.