This document discusses Louis Vuitton's entry and expansion in India. It notes that Louis Vuitton originally targeted only the super rich by opening stores in luxury hotels. However, it then aimed at the "sheer rich" market by opening stores in luxury malls, which provide higher foot traffic. Luxury malls are preferable to hotels for visibility and attracting various customer segments, though they require higher investments. The document also examines the different target groups for luxury goods in India and factors that have hindered the market.

2. Introduction
• Louis Vuitton, fashion and leather goods business unit of
LVMH Group headquartered in Paris, France luxury
goods conglomerate targeting the “super rich” people.
• For seven decades Louis Vuitton remained a single-
product brand of the company which produced only
handmade leather bags before diversifying into leather
accessories.
• In 1987, Louis Vuitton merged with Moët Hennessy, a
French wine maker of 1743 vintage, to form LVMH
Group.

3. • LVMH went on an acquisition spree during the 1990s,
targeting heritage brands. By 2000, the company had
over 60 brands in its portfolio
• Louis Vuitton, was the flagship brand of the
company’s fashion and leather goods business
segment generating over half of the group’s profits.
• Louis Vuitton was keen on projecting itself as a luxury
brand with a distinguished heritage and not a fashion
brand that changed with the times.

4. • The fashion and leather goods business had 14
production workshops 12 in France and 1 in Spain and
1 in California
• Some of the brands other than Louis Vuitton the
company has: Fendi, Donna Karan, Loewe, Marc
Jacobs, Celine, Kenzo, Givenchy, Thomas Pink, Pucci,
Berluti, Stefanobi, Rossimoda and eLuxury
• By year 2007, 2,048 stores worldwide, over 2000
stores worldwide, 71,000+ employees, sales revenue
of €16.5 billion and a net profit of €2.3 billion for the
year

5. Why do people buy luxury goods?
Social Assertion
Exclusivity
Status Symbol
"Money in the bank when you die means you have not enjoyed life.“

6. Logical
ImpulsiveEmotional
 Functionality and
superior quality
 Extensive Pre Purchase
survey
Logical
ImpulsiveEmotional
Emotional
Impulsivelogical
 Acceptable Exclusivity
 I have made it
 Feel good factor
 Self Indulgence
Three categories of consumers

7. HIGH END PRODUCTS IN A LOW INCOME ECONOMY
ITEMS UNIT PRICE (INR ₹)
Suhali Handbag 1,28,000
Eye Love Handbag 1,28,000
Tambour Chronograph watch 1,89,000
Suitcase 7,00,000
Belt 18,000

8. ENTRY INTO INDIA
Category Annual Income
Range (US $)
No. of Households (000s)
Urban Rural
Super Rich Over 228890 126 16
Sheer Rich 114940 – 228890 219 37
Clear Rich 45980 – 114940 825 212
Near Rich 22990 – 45980 1793 581
Strivers 11500 – 22990 4629 1544
Seekers 4600 – 11500 14313 7955
Aspirers 2070 – 4600 29249 46055
Destitutes Less than 2070 18019 96345
With the first two stores in luxury hotels, LV catered to the super rich.
Now with its entry in luxury malls, it was aiming at the next lower level – the sheer rich
Target
market

9. Target Groups
• Indian Royal Families
• High Net worth
Individuals
• Wealthy individuals looking for
superior functionality and quality
• Wealthy individuals looking for
exclusive appearance and status
symbol
• Younger individuals who see luxury
products as a means of self-
indulgence

10. MARKET SIZE
Product Segment
Potential Customers
New Customer Group

11. FACTORS HINDERING THE PURCHASE OF LUXURY
GOODS IN INDIA
CHALLENGES
• 87% of population lived on less than Rs.165 per day
• 266.5 million people bellow poverty line
EXTERNAL FACTORS
• High customs duties on imports
• Official ban on imports of leather goods
• Concern entry of MNC would place domestic leather
trade at risk

12. Retail Clusters
• What are Retail Clusters?
• Why do Luxury Goods Marketers form
Retail Clusters (LRC)?

13. • Louis Vuitton & LRC
Pros Cons
Exclusivity Very few LRC in India
Visibility More expensive
Control over Store Design High investment
Ownership of Store
Success in the West

14. Why do certain luxury brands look for store
locations in luxury hotels?
• Luxury Hotels – Social hub
• First halt for tourists
• Target segment availability
• Premium ambience
• Next best option after High Streets
• Adjacencies of other exclusive
brands
• Good security facilities

15. Alternatives and the way ahead
• Luxury nibbling
• ‘Brand conscious but Price conscious’
• Lack of single main streets and luxury
malls
• Brands targeting heritage buildings
 High street location: Rs. 450-550/sq.ft*
 Luxury Malls: Rs. 350-450/sq.ft
 Luxury hotels: Rs. 600-800/sq.ft
• 10-12 footfalls in a mall/day while 2-3 in
a luxury hotel/day**
• Emphasis on attracting various
customer segments
• Creating an exclusive environment

16. How does luxury malls work for luxury
markets?
• India has three such malls—DLF Emporio in
Delhi, Palladium in Mumbai and UB City in
Bangalore.
• Malls specially cater to luxury brands:
Ambience, Space and Footfalls
• Five-star hotels: footfalls remain a challenge

17. The key statistic is the number of visitors that stores
get.
“As far as footfalls go, if a brand store gets 10-12
footfalls in a day in a mall, the same would get
two or three in a hotel and sales per sq. ft also
would be in that proportion,” said Kapoor of
Genesis.
We get customers from all sorts of places. They
could be people from across India and even
tourists from South Africa visiting the city. The
number of walk-ins are at least 10 times higher
(compared with five-star hotels) and customers
who are visiting the mall are curious to check out
the brand, know the prices and see the
collection,” said a store executive at Jimmy
Choo’s Palladium store.
Developers aren’t all that enthusiastic because of the limited number of potential
tenants. Most luxury brands plan to expand their presence to anywhere between
two and six stores and not much more beyond that