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30

Sep

Bargain-basement Bangalore

My roommate opens new Puma stores in India, where the brand is so new that people think the sneakers are actually made for running. But even as more stores are built to cater to privileged Indians, not all of the existing ones are turning a profit. One of the many reasons why: the goods here are priced 30 percent less than in the company’s home country of Germany.

It’s obvious why Indian-produced goods are obscenely cheap in Bangalore by Western standards. But so are brands like Puma or Lacoste, where polos retail for a little more than half the American MSRP. Many items you buy at your neighborhood Shaw’s or Kroger’s are also bargains:

  • 6-pack Wrigley’s Orbit White sugarfree chewing gum, 5 rupees/$0.10
  • 7.5-ounce St. Ives Apricot Body Scrub, 65 rupees/$1.36
  • 200-gram Quaker Oats, 30 rupees/$0.62

(For perspective, a cup of chai costs 5 rupees. Monthly school fees can be 750. And a maid cleaning four homes can make 7,000 each month.)

The low prices take into account the income disparity between India and the West, my roommate says. A desire to build market share in a rapidly developing country must also motivate the firms. I’m reminded of those addictive digestive biscuits dipped in dark chocolate. In Jordan, my Arab brother claimed their price had tripled in a one-year period, and not only because of the overall increase in food costs. First, the company had to cultivate the people’s taste.