L’Oreal owned ‘affordable luxury’ brand Kiehl’s has decided to offer a 15-20 per cent discount in India compared to the rest of the ASEAN countries.
“In India, we have strategically priced Kiehl’s products 15-20 per cent cheaper compared to the neighbouring ASEAN countries, to encourage Indian customers to buy products from us in India, and not when they travel abroad to Singapore or Bangkok or from duty-free shops at airports. Since most of our customers travel abroad 2-3 times a year, they like to compare prices of our products and are pleased to know that we offer great value within the country. In fact, our strategic pricing is at par with or lower than even the West Asia, Western Europe and the UK,” said Anurag Tyagi, Brand Manager, Kiehl’s India.
With an average MRP of Rs 1,950, Kiehl’s skin care range begins at Rs 495 (lip balm) going up to Rs 4,050 (anti-aging serum).
“Pricing has been a huge factor for us in gaining customer loyalty and in making sure that Indian customers are buying from us in India. As a company, we are invested in offering value for money to Indian customers even if we remain at the receiving end of the highly volatile currency fluctuations (especially the Dollar), high import duties (all Kiehl’s products are made in the US) and the high cost of real estate and other operational costs in India,” he added.
Kiehl’s launched its sixth store in December last year at Debenhams departmental store in Bangalore through a shop-in-shop format. The luxury brand has entered India through an Indian partner – Quest Retail. However in Bangalore, it has entered into an arrangement with Arvind Lifestyle.
“We are here for the long term and are not in a hurry to get profitable. In a developing country such as India, it is all about offering the right value proposition. The brand is on an investment mode and we have also developed India-specific products such as hair oils,” said Tyagi.
Kiehl’s would also be tapping into e-commerce as an additional distribution channel in the future. “At Kiehl’s, depending on our priorities for 2013, since we are still in the process of expanding our brick-and-mortar retail footprint, we may decide to pilot an e-commerce project either in collaboration with an etailer or perhaps even on our own local platform that we soft-launched at the end of 2012. E-commerce can be a very exciting space and opportunity for the Indian market, added Tyagi. The 160-year-old Kiehl’s brand was acquired by the L’Oreal Group in 2000.