THERE SHE GROWSIndia is second fastest growing region in Asia Pacific for Luxury ProductsThe Indian market is expected to grow at rate of 25% over next 5 years.At $4.8 billion, the luxury retail market has place for everyone.Apparel, jewelry and personal care are the biggest sells in the luxury market.
LETS TALK NUMBERSIndian Luxury Market is worth USD 4.9 billionForms only 2% of the global share – huge scope for expansion.India will be the second largest economy by 2040.103,000 millionaires .16,000 more are getting added every year.Second fastest growing luxury market in the world.
DIFFERENCES IN GLOBAL AND INDIAN MARKET Figs in percentage 29 43 7 28 39 14 5 8 20 7 Global India Wines and Spirits Art Jewellery and watches Personal Care ApparelIndian market is dominated by Jewellery whereas as Global market is dominatedby Apparel and Accessories. Source: AT Kearney Research Report
THE INDIAN SOJOURNFrench Connection currently has more than 1,500 outlets across 25 countries worldwide.fcuk hit the Indian market at the Lakme Fashion Week in April 2007.Today it has 21 points of sale across eight cities in India.Main segments are Men’s Apparel, Accessories, Women’s Apparel and watches.For the Indian markets it has an agreement with BMI India for distribution.
PLUMMETING SALES GLOBALLY AND IN INDIAGlobally, after 10 years of growth has come to a shuddering halt.An adaptation of the companys infamous slogan may be a more fitting description of its financialcondition.Making USD 300 per 100 sq. feet of retail space compared to USD 1000 as expected in India.Given the global scenario, India should be high in the priority for fcuk.
BRAND CONSCIOUSThe Indian customer is aware of world trends because of growing travel overseas for business and leisuretravel where they get exposed to best of the brands and luxury trends. Source: AT Kearney Research Report
PRICE SENSITIVEDemand Value for Money which is mostly because of traditional cultural values.
PERSONALIZED CONNECTPersonalized connect is important because Indian consumers has high emotional associationwith the products they own or acquire.
HIGH EXPECTATIONSHigh standards of service expectations as the Luxury Consumer will mostly have long termassociation with the product
ATTRIBUTES OF “LUXURY BRAND” FOR INDIAN CUSTOMER VALUE FOR INTERNATIONAL HIGH QUALITY HISTORY LONGEVITY EXPENSIVE EXCLUSIVITY MONEY RECOGNITION AND SERVICELess important More important Source ET consumer research across 6 cities and 4900 consumers
INDIAN LUXURY CONSUMERProfession of Indian Luxury Consumer Age profile of Indian Luxury Consumer Professional 5% IT/BPO 45-50 8% Years Self Employed 16% 9% Industrialist 49% 25-34 Years 35-44 52% Corporate years 29% 32% India Luxury Consumer is typically a 25 – 34 year old entrepreneur or a industrialist
INDIANS ARE VICTIMS OF HABITConsumers get accustomed to shopping abroad.They rather spend 200 pounds on a shirt there, than Rs 20,000 here.It is tough getting them to change.
IMPORT DUTIES ARE A HEADACHESteep duties translate to prices 15% higher than in Europe.Jet-setting wealthy Indians hence shop abroad–means luxury brands often struggle to make aprofit in IndiaIndian presence is often seen as just a branding exercise.
INDIAN MEN LOVE TO SHOPAround the world, the mix is a 60:40 (women VS men), but in India, its skewed in favour ofmenswearMen’s formal wear is the fastest growing segment in India so it makes sense to focus on thissegment.
THIS SEASON’S TRENDS ARE MISSINGLuxury retailers offer a limited product range and stock second-rung products at astronomicalprices.The customer thus, opts to buy from the stores abroad instead.
INDIA NEEDS NEW YORK’S FIFTH AVENUELuxury retailing in India is limited to a few shopping plazas, select high street locations, mallsand five-star hotel lobbies.Just Three centers which are in the luxury segment are DLF Emporio in Delhi, UB City inBangalore and Palladium in Mumbai.However, the right location and the retail ambience for a brand are crucial.
BRANDS SHOULD BE IN FOR A 10-YEAR WAITDoing business in India is definitely not a wham-bam-thank-you-maam formula.Its a slow process, but one that will eventually pay long-term dividends.
PARTNERSHIP IS KEYBrands can JV with local partners which can help them understand local markets better.With india’s FDI rules, having a local partner becomes profitable.Prime examples are Reliance brands with Diesel , Genesis colors with Burberry, DLF Brands withBoggi.
SOFTER PRICE POINTSBrands would benefit by keeping their prices competitive and offering entry level products aswell.Pricing products at a comparatively lower level than it’s international price can be a greatInvestment towards brand building.The Indian customer seeks the thrill of making a ‘steal’ bargain.Initially the brand can bear the higher import duties partly helping the customer to getoriented with the brand.
INDIANIZE PRODUCTForeign brands need to understand the Indian personality and fashion elements to ‘Indianise’ theirproducts.A win-win situation for global brands is to utilize the talented and cost effective Indian designers.It worked so well for fcuk in USA and UK, so why not in India.
ABOUT THE AUTHORVijay Sharma is a graduate in Engineering from University of Mumbai and is keenly interested in the fields of advertising, marketing, business development and brand building. He loves presentations, meeting people, talking, music and shopping. You can mail him at firstname.lastname@example.org