Levi Strauss tempts Indians with denim on credit
FRANKFURT: US jeans maker Levi Strauss has begun selling its denim on credit in India, offering shoppers the chance to buy a 30-dollar pair of its famous trousers in three installments.
The technique of allowing deferred payments is an age-old commercial strategy more common for sales of washing machines or cars, but the company has embraced the concept to tempt aspirational Indians with restricted budgets.
"This is the first time the world over that apparel like jeans and shirts are being sold on credit that will be deducted by the bank in three monthly installments," Levi Strauss India managing director Shumone Chatterjee told AFP.
The group, which claims to have created the first blue jeans in 1873, has teamed up with India?s largest private bank, ICICI Bank, to launch the initiative in the IT hotspot of Bangalore.
Buoyed by the response, Levi's said it was in talks with other private banks such as HDFC to offer credit to a wider range of buyers and in other cities around the country.
Bangalore, with its large young population of IT workers, was an obvious starting point.
"Ever since we introduced the ?buy now, pay later? scheme without interest or hidden charges in June, our sales have surged by 10-15 percent," Levi?s franchise manager M. Aaron told AFP from his spacious showroom in Bangalore.
The only condition for the credit is that the bill should be for at least 1,500 rupees (30 dollars), which means interest-free repayments of 500 rupees a month.
The lowest price for a pair of jeans in Aaron's store is 1600 rupees.
Judging by the customers walking out with shopping bags, Levi's are a hit among Bangalore's college students, young techies and middle-aged professionals who were busily swiping their credit cards.
The move is an attempt by Levi Strauss to tap into the burgeoning demand for Western-branded clothes among India's growing middle class.
Changing lifestyles, rising incomes and the influence of Western culture have fuelled demand for designer clothing in India, an obvious symbol of wealth in the status-conscious country.
"With rapidly changing and globally exposed lifestyles, tastes and desires, consumers in India are seeking means to upgrade and update their wardrobes," Levi?s brand manager Vishal Bhalla said.
Harish Bijoor, a brand specialist who runs an Indian consultancy, told AFP that he expected the installment plan to tempt buyers who might have been put off by the total price tag.
It could also boost sales at a time when consumer spending has weakened because of a broader slowdown in the Indian economy in the wake of the global financial crisis.
"The Levi?s scheme is a trendsetter in the jeanswear or apparel industry, which has been growing in double-digits over a decade," he said.
"The scheme makes branded products like Levi?s jeans affordable to a critical mass," he added.