India, the world’s fastest growing economy, the fastest growing population, & the fastest growing country for people with $100 million in wealth is witnessing a surge in conspicuous consumption. It’s not just tycoons, but a new class of wealthy entrepreneurs, executives and dealmakers that are muscling into India’s luxury market. Post covid, besides just the usual drivers of revenge shopping, restricted travels and a fear phobia linked with crowded destinations, strict capital controls dictated by the Modi government forced the elite to splurge on luxury within the country. Hence, despite a habitual preference for jetting abroad to Europe for shopping and vacations, domestic demand for everything from handbags to second homes to watches and automobiles has accelerated since the pandemic.
This naturally, is leading to global luxury firms and brands rushing into India. The recent opening of the Jio World Plaza at Mumbai on November 1st is testimony & home to many such brands. The four level plaza, that seamlessly integrates into the Nita Mukesh Ambani Cultural centre, The Jio World Convention Centre and the Jio Garden, makes it a complete cultural, retail & entertainment hub. On offer is access to 66 luxury brands including global new comers and iconic brands like LV Gucci, Cartier, Dior, Balenciaga, Valentino, Versace, Tory Burch, Rimowa, Pottery barn, Tiffany amongst others.
Earlier, in September, India hosted the G20 summit & ensured that a host of global delegates and key business leaders witness the growth and upsurge of economic development in not only major metros but across 200 odd key smaller cities. This has further created desirability for global brands to set up businesses across India. In addition, from ‘RRR’ winning a first ever Indian Oscar & ‘Naatu Naatu’ being awarded the best original soundtrack in the 95th Academy Awards in March, to the Indian Prime Minister Narendra Modi being welcomed to The White House for a state visit in June, India and Indians have been the center of every important global occasion.
Today, no major global challenge from climate change to advances in technology, to the Ukraine as well as Gaza wars, can be addressed without India’s buy-in. Likewise, no global mega event is complete without India and Indians. From Cannes to Met Gala, Indian celebrities, just like PM Modi, are ruling the roost.
Can luxury be far behind?
A quick look at Luxury Brands and their growing interest in India.
1. BVLGARI:
In August 2021, Bvlgari appointed Priyanka Chopra Jones as their global brand ambassador. Jean-Christophe Babin, the Bvlgari chief executive said “India holds a special place in our hearts at Bvlgari, since it doesn’t only offer us a continuous source of inspiration, but this rich, incredible land provides us with some of the most precious gems of nature to craft our creations, from jewellery to fragrances,”. “I’m beyond excited that Priyanka is joining our family. I’m sure that together we will develop exciting projects, with a significant social impact.”
Soon after, in September 2021, the Roman jewellery brand launched its first ever India inspired exclusive statement piece ‘The Bulgari Mangalsutra’. Speaking on the occasion of the launch, Mauro Di Roberto, Managing Director – Jewelry Business Unit at Bulgari, said “Since we re-entered into India in 2014, we have been even more intrigued by the cultural traditions of India and inherent role of jewelry. It took us several years to design our interpretation of the Mangalsutra for the modern Indian woman, for whom this piece is often one of the most important pieces of jewelry she wears. While working hard to maintain its traditional appeal, we have worked closely with our team in India and Priyanka Chopra Jonas to ensure that it is resonates with the lifestyles of the modern bride today- that she can wear from morning to night, every day and everywhere, pairing it with ease with Indian as well as western wear.”
Earlier in 2020, the company partnered with perfume and taste company Firmenich on a sustainable flower farming project called “Flower Gems of India.” The goal was to create a new jasmine farming model involving 100 family-owned farms in Tamil Nadu, offering local communities an alternative approach to jasmine production to increase their profits and enhance the quality of their flowers.
And the love affair continues in 2024…Bulgari has launched the ‘B.zero1 Kada Bracelet’, which pays tribute to the ‘kada’, a traditional Indian bangle. This exclusive-to-India design is crafted in yellow gold and is an ode to India’s long-standing cultural affinity with precious metals and stones. Actor Ayushmann Khurrana has been roped in as ambassador for the bracelet.
2. LOUIS VUITTON
For the pre fall 2020 campaign, Deepika Padukone became the first Bollywood actor to star in the Louis Vuitton global campaign, bringing the Indian face an inch closer to global posters. She was amongst other celebrated & known faces of Louis Vuitton like Sophie Turner, Léa Seydoux, Alicia Vikander, Chloë Grace Moretz and more.
Soon after in May 2022, she was elevated as the first Indian ever to have been appointed as the Louis Vuitton House Ambassador. As the brand announced the prolific Bollywood actor as its House Ambassador, the designer and muse relationship fused beyond just campaigns and ramp walks into a more cohesive relationship.
3. CARTIER
The house of creativity and timelessness, Cartier, unveiled Deepika Padukone as their newest ambassador on Monday, October 3rd, 2022. Arnaud Carrez, Cartier’s Senior Vice President and Chief Marketing Officer, announced, “We are delighted to welcome Deepika Padukone to our community of extraordinary talents. As an inspiring actress and committed philanthropist, Deepika embodies the Maison’s spirit and values of celebrating creativity, universality and open-mindedness.”
4. CHRISTIAN DIOR
On March 31 2023, Dior decamped from Paris to Mumbai where Maria Grazia Chiuri presented the house’s pre-fall 2023 collection against the historic backdrop of the Gateway to India. Chiuri made her boldest step yet staging her Fall 2023 show in Mumbai, as a “creative dialogue” between Dior and Chanakya. Amid an art installation created by Chanakya and its School of Crafts, Chiuri showed one of her most embroidery-dense collections to date, rich with silks and jewel tones and shown in an achingly pretty progression of colour and texture. Chiuri also underscored that Dior’s relationship with India predates her 2016 arrival at the brand. Marc Bohan, who was Dior’s artistic director from 1960 to 1989, travelled to Mumbai and Delhi in the early 1960s and created a number of pieces for Indian customers. Many of the looks in the collection Chiuri showed were updates of those original Bohan designs.
5. TIFFANY
Come end April 23, Ranveer Singh attended the unveiling of Tiffany & Co.’s newly redesigned New York City Landmark, the newly transformed flagship of Tiffany & Co. Associated with Tiffany as ‘Friend of the House’, Ranveer, the only Indian in attendance, walked the red carpet wearing designs like the dazzling ‘Schlumberger bird on a rock’; and icons like ‘Tiffany T bracklets & rings’; ‘Tiffany HardWear wrap necklace’ amongst others. He celebrated the occasion alongside key brand guests such as Jimin from BTS, Gal Gadot, Hailey Bieber, Florance Pugh, Anaya Taylor Joy, Blake Lively, Michael B Jordan, and Zoey Kravitz.
6. ESTEE LAUDER
Come May 2023, Estee Lauder named Bollywood actor and former Miss World, Manushi Chhillar as its global brand ambassador. With this appointment, the actor joined Estée Lauder’s roster of global ambassadors that include Imaan Hammam, Adut Akech, Ana de Armas, Amanda Gorman, Bianca Brandolini D’Adda, Carolyn Murphy, Grace Elizabeth, Karlie Kloss, Kōki, and Yang Mi. Commenting on the appointment, Justin Boxford, global brand president of Estée Lauder in a statement said, “We are thrilled to welcome Manushi to the Estée Lauder family. In addition to her rising star power, Manushi’s dedicated use of her platform to bring about positive social change in India and beyond will enable us to continue to reinforce our brand’s commitment to championing women’s advancement around the world.”
7. GUCCI
Soon on the heels of the above association of Estee Lauder, came another exciting announcement of Alia Bhatt as Gucci’s first global ambassador from India. Following her successful debut at the Met Gala— the most gate kept fashion event of the year, Bhatt was perhaps the obvious choice for an expansion in the fashion space. She joins the ranks of global ambassadors at Gucci such as Dakota Johnson, Hanni from the Kpop group New Jeans and Harry Styles. This new move from a mega luxury house, following suit of competitors will perhaps signal a change in the global perception of the power of Indian talent.
SO WHAT’S DRIVING THIS NEW FOUND ATTRACTION TOWARDS INDIAN CELEBRITIES?
·Popularity and Influence: Indian celebrities enjoy immense popularity and have a significant fan following, both in India and globally. They have a strong influence on consumer preferences and trends, making them valuable assets for luxury brands looking to connect with their target audience.
· Brand Visibility and Recall: Partnering with well-known Indian celebrities helps luxury brands gain visibility and enhance their brand recall in the Indian market. These celebrities often have a wide reach through various media platforms, including television, movies, social media, and endorsements. Their association with a luxury brand can create a positive perception and generate interest among consumers.
· Cultural Relevance: Indian celebrities bring cultural relevance to luxury brands, especially when they align with the brand’s values, aesthetics, or target market. By associating with Indian celebrities, luxury brands can tap into the cultural nuances and preferences of Indian consumers, creating a stronger connection with the local audience.
· Aspirational Appeal: Luxury brands often aim to evoke a sense of aspiration and desire among consumers. Indian celebrities, with their glamorous lifestyles and successful careers, embody this aspirational appeal. Their association with luxury brands can help create a perception of exclusivity, desirability, and success, enticing consumers to engage with the brand.
· Market Penetration: India is a vast and diverse market, and celebrities can play a crucial role in helping luxury brands penetrate different regions and target specific consumer segments. Indian celebrities often have a strong regional and demographic appeal, allowing luxury brands to expand their reach and tap into new markets within India.
· Global Appeal: Many Indian celebrities have gained international recognition through their work in the entertainment industry. Luxury brands see the value in partnering with these celebrities to leverage their global appeal and reach a broader audience beyond India. This strategy helps luxury brands establish a stronger presence in international markets.
INDIA – THE NEXT PLAYGROUND FOR GLOBAL LUXURY.
Macro-economic parameters: India’s GDP has been growing at a steady pace in recent years, prompting economists at large to put forth superfluous predictions about the country’s future. Alongside touting India as a driver of economic growth in Asia, some analysts expect the country to be the second largest economy in the world by 2050.
The world economic outlook report by the International Monetary Fund projected that despite facing considerable challenges and headwinds such as financial sector turmoil, inflationary pressures, Russia – Ukraine war, Israel – Gaza war, and the persistent impact of covid 19 over the past three years, India remains the fastest growing economy in the world.
“Growth in India is set to decline from 6.8 percent in 2022-23 to 6.3 percent in 2023-24 before picking up to 6.8 percent in 2024-25, with resilient domestic demand despite external headwinds,” the IMF said in an update to its World Economic Outlook report.
Further, India currently a $3.75T economy, the fifth largest in the world continues to maintain its pace of rapid growth. A report by EY projects India to become a US$26 trillion economy by 2047 with a six-fold increase in per capita income to US$15,000. Goldman Sachs predicts India as the world’s second-largest economy by 2075, while the FT’s Martin Wolf suggest that by 2050, its purchasing power will be 30% larger than that of the U.S.
Indian Consumer Scenario: As per a report by Bain & Co, India’s consumer market represents an opportunity worth $6T by 2030. It is estimated that India’s total consumption expenditure will grow by a factor of four, from $1.5 trillion in 2018 to $5.7-6 trillion by 2030. This impending explosion of opportunity is fascinating, not just for the size of the prize at which it hints, but for the changing complexion of the consumer.
Evolution of the household-income profile in India Image: Bain & Company
– Low Income: <$4000; Lower-mid: $4000-8500; Upper mid: $8500 – 40000
– High Income: >$40,000 basis income per household in real terms.
– Projections with annual GDP assumption of 7.5%.
– Source: Projections based on ICE 360 degree surveys of 2014,2016,2018.
It is the upper middle income as well as the high income households which stand at about 50% of the over all population pyramid which are driving the growth of premium to luxury consumption.
Rise of HNI’s and UHNI’s: Wealth of the rich in India has grown over the last decade. The pandemic-hit years too continued to see a stellar increase in the number of the rich. According to IIFL Wealth Hurun India Rich List, while 100 Indians owned assets worth more than ₹1,000 crore in 2012, the number has grown to 1,103 in 2022. During the pandemic, between 2019 and 2022, there were 353 additions to the list. The richest 1 per cent in India now own more than 40 per cent of the country’s total wealth.
Further, as per Credit Suisse report 2021, India housed 7.96 lakh millionaires, expected to shoot up by 105% to 16.32 lakh by 2026. During 2018-22, India is estimated to have produced 70 new millionaires every day. At 4,980 individuals, India also had the fifth highest number of UHNI’s (net worth of at least $30m). The report said wealth per adult in India has risen at an impressive average annual rate of 8.8% since the year 2000 and stood at $15,535 at the end of 2021.
It is the upper middle income as well as the high income households which stand at about 50% of the over all population pyramid which are driving the growth of premium to luxury consumption.
India climbing up the Luxury Ladder: The global luxury market is estimated to be worth $1.48T by Bain & Co. An anticipated growth of 5% in the personal luxury goods space has actually been surpassed to a level of 8-12% as per the latest spring 2023 report by Bain & Co. Most of this growth is expected from newer markets of India, South Korea and Taiwan. India’s luxury market currently at about $57b, is projected to grow by 3.5 times to reach $200b by 2030.
What are Indian’s splurging on? The post pandemic market saw a frenzied revenge shopping phenomenon in all sectors of luxury. In 2022 , Indians spent around $8 billion on luxury products, says Claudia D’Arpizio of Bain & co. The YOLO concept came to its true element when most Indians began and continue to splurge on good things in life including fashion, accessories, watches, high end cars, fine wines and luxury homes. Beauty, skin care, wellness & health have come to the forefront. Micro vacations drive demand for weekend get aways and boutique properties to isolate oneself from the boredom of the daily life. Destination weddings with no expense barred kind of toppings top the list. Fine gourmet, expensive yet classic gifts, theme based décor and designer clothing along with erotic entertainment see a rise in demand.
Luxury fashion and accessories: A rather dominant presence of global luxury fashion and accessory brands was initiated in the year 2008 when Emporio, India’s first true luxury mall opened its doors to names like Louis Vuitton, Christian Dior, Cartier, Zegna, Giorgio & Emporio Armani, Tom Ford, Gucci, Salvatore Ferragamo, Bottega Venetta, Burberry, Corneliani etc were made available to the Indian audience. The 2010 global Lehman brother crisis soon followed with a slowdown and reshuffle of a few brand exiting and newer ones entering.
During the post pandemic era, many newer brands have entered or announced their arrival in the promising Indian market. Euromonitor forecasts the luxury goods market to be worth $8.5 billion, up by an impressive $2.5 billion from 2021. Soon on the heels of Reliance brands Limited announcing their association with Valentino and Balenciaga, Aditya Birla Retail announced the much awaited arrival of the chain Galeries Lafayette. The French luxury department store will open two stores, one each in Mumbai (8,000 square meters) and Delhi (5,500 square meters) in 2024 and 2025 respectively. Each is stated to house more than 200 global luxury brands.
“We are proud to expand our international footprint in the heart of a market as prestigious and refined as India, where we believe Galeries Lafayette can benefit from strong growth potential,” said Galeries Lafayette’s CEO Nicolas Houzé, in a statement.
Mr Ashish Dikshit, the Managing Director of Aditya Birla Fashion and Retail limited said, “This is a coming-of-age moment for Indian luxury. India is now home to a generation of young and affluent consumers with global exposure, who are willing to spend on the finer things in life. This is visible in the boom and dynamism of the luxury market. The partnership with Galeries Lafayette is a ringing endorsement of India’s significance as a global luxury market and a future engine of growth for luxury brands.”
Not only just global luxury brands, there has been a recent thrust towards corporatisation of Indian fashion and artisanal brands with both Reliance Brands as well as competitor Aditya Birla Retail vying for an action of this fast developing pie. Major associations announced by the two houses include top names like:
Reliance Brands limited : Manish Malhotra, Raghavendra Rathore, Anamika Khanna, Ritu Beri, Ritu Kumar, Rahul Mishra, Abu Jani & Sandeep Khosla, Abraham & Thakore, Satya Paul
Aditya Birla Retail : Sabyasachi Mukherjee, Tarun Tahiliani, House of Masaba, Shantanu & Nikhil.
As corporates continue to invest in design houses and create bridge-to luxury and ready-to-wear lines, more and more Indians will be seen dressed in designer wear.
Luxury watches & Jewellery: As per Statista, revenue in the Luxury Watches & Jewellery segment amounts to US$2.24bn in 2023. The market is expected to grow annually by 0.18% (CAGR 2023-2028). Swiss watch manufacturers registered a new record for exports to the Indian market in 2022. According to Federation of the Swiss Watch Industry, the growth in demand for Swiss watches remained robust even during the first two months of 2023. India ranked 23rd in terms of Swiss watch exports to countries, whilst imports of Swiss watches into India rose by 20% in 2022 from previous year.
Luxury watch retail chain Ethos watches, reported a gross revenue increase of 36.6% from previous year. The retailer maintains that the Indian Luxury watch segment is growing at a pace of 10-12% PA. With a portfolio of over 60+ brands, 54 outlets across the country and 22 more planned for the year, Ethos watches has managed to organise this lucrative space by penetrating tier 2 & tier 3 cities across India. In addition, reputed luxury watch retailers have now expanded their business to the ecommerce platform and are capitalising on this hybrid format. Recently, in March 23, Luxury multi-brand retailer TimeVallée has entered into a partnership with Tata CLiQ Luxury to launch its exclusive digital boutique in India.
On the jewellery front, besides the global names like Tiffany, Bulgari and Cartier, top Indian brands like Zoya, Tanishq, Malabar Gold, P.C.Jewlers, Hazoorilal, Tribhuvandas Bhimji Zaveri, Joyluka’s and Kalyan etc ween the consumers into branded jewellery from traditional small time unorganised jewellers. The future is only bright as the consumer gets younger and branded.
Luxury Homes: Post pandemic, demand for luxury homes and real estate has seen a upswing. With work from home and the gig economy becoming a norm, people seek a comfortable home to not only live in and work from, but also party in. High rise apartment blocks with all amenities like a swimming pool, gymnasium, grocery shopping, banking and salon facilities along with a medical centre built in are the flavour. A self-contained living cum entertainment zone with a banquet to host parties, a business centre cum club for entertaining and meetings, a mini golf course if not a 18 hole etc are some of the toppings being sought.
As per the Luxury Outlook survey by India’s Sotheby Reality shows that 33% of the HNI’s and UHNI’s are willing to spend upwards of Irs.100m and upwards for a luxury home. Farm houses, second homes, retirement homes and even old age homes see a significant demand in cities of Mumbai, Delhi NCR, Goa, Bangalore etc. The luxury real estate demand is further pepped up by NRI’s looking at investing in asset classes in India. The currency advantage plays a major role along with unprecedented appreciation and demand for ready to move in houses, villa’s and apartments in gated complexes.
Out of the total 365,000 units sold across the top seven cities in 2022, about 18 percent (approximately 65,680 units) were in the luxury category, reveals research conducted by real estate consultancy firm Anarock Group. Contrastingly, of the total 261,000 units sold in 2019, just seven percent (approximately 17,740 units) were in the luxury category.
“After a stupendous performance in 2022, the bull run in luxury sales continued in Q1 2023 as well despite property price rise,” says Anuj Puri, chairman, Anarock Group. “And most recently, out of the total 1.14 lakh units sold across top seven cities in Q1 2023, at least 25 percent were in the high-ticket segment priced Rs1.5 crore.”
Luxury Automobiles: In the automobile domain, luxury brands enjoy a mere 1-2 per cent of the overall market. It is estimated that anywhere between 37,000-38,000 luxury units sold last year. Cumulative sales for Mercedes-Benz, BMW, and Audi accounted for 31,277 units. Mercedes topped out at 15,822 units. BMW sales was reported at 11,268 units, and Audi sales stood at 4,187 units. Demand said to be stronger for top end vehicles priced upwards of Irs. One Crore.
Super luxury cars like Lamborghini see a upswing of sales from smaller towns and are sold out for the entire 2023 with an expected delivery of 100 units. The brand saw records sales in 2022 at 90 units with a growth of 30% from previous years. Likewise, Porsche witnessed a 64% growth with a sale of 779 units in 2022.
The market is set to register a robust growth in 2023 with the total industry volumes likely to grow by 13-18 percent to about 43,000 to 45,000 units. Mercedes-Benz India, the country’s largest luxury car maker posted its best ever January to March Q1 sales numbers at 4,697 cars, posting a 17 percent growth. Industry experts say the luxury car market has a potential of accounting for five to seven percent of the overall market by the end of the decade.
Fine wines, liquor and spirits: In 2022, India overtook France to become the largest market of Scotch whisky by volumes. But it’s still just 2% of the country’s overall dark spirits market, and a potential 150% reduction of tariff burden under the UK-India free trade agreement could boost market access. The market is projected to grow at an annualized 7% rate by 2026. Over the past two years, the scotch whiskey market has nearly doubled. Spurred by growth and higher consumption by millennial drinkers as well as a growing middle class, the pricier scotch market grew by 33% year on year to 7.5m cases of nine litres in 2022. In 2020, India consumed 3.9m of premium scotch whiskey.
Likewise, the wine market in India is estimated to increase by USD 688.16 millionn between 2022 and 2027. The markets growth momentum will be progressing at a CAGR of 30.92%. The market is driven by factors such as the increasing use of online sales channels, the increasing application and demand for wine in the food industry, and the growing awareness regarding the health benefits of wine. The rising population of millennials worldwide is a key trend influencing the growth of the market.
While revenge shopping may have contributed to the generic growth, the overall acceptance and demand of the luxury and super-premium segment must be attributed to a shift in consumer perception and evolving drinking habits. The younger generation is more cautious of the alcohol they consume because they value its quality. This generation’s alcohol preferences reflect an evolved demand for flavour, a rich history, sustainability, and other such factors. The Indian flavour profile for alcohol has evolved and now includes the subtle nuances found in luxury spirits. As we raise our glasses to the major shifts in consumer behaviour, one thing is certain: with health consciousness on the rise, more shifts are on the way.
UNDERSTANDING THE INDIAN LUXURY MARKET & ITS CONSUMER MINDSET
There are many different nuances that luxury brands should take note of when it comes to the Indian market. For instance, the Indian male shopper tends to spend big on international luxury fashion brands, more so than female shoppers.
However, accessories like bags and footwear are large drivers for women’s luxury brands since these are easy to pair with Indian luxury outfits and are a place where womenswear brands need to focus.
Another point to note is that Indians like to be pampered, so luxury brands need to offer unique experiences, storytelling, and melodrama to keep them hooked.
A large chunk of the customer is maturing and seeks value and experiences over just brand name and logo.
Specificity counts. Brands that have launched India-specific collections and or communications have fared better. This is an easy route to connect to Indians not only in India, but a larger diaspora spread all across the world, particularly as a larger part of the Indian luxury market invests in brands that help define their sense of style rather than just social stratification.
Celebrity endorsements and influencer campaigns are key drivers of brand affinity.
Self-indulgence comes out even bigger than a display of logo.
Unlike the West, Indians are comfortable with crowds.
They prefer to step out and shop in-store as compared to online shopping.
The e-commerce surge is real. Don’t ignore it.
Limited physical availability is driving small town consumers towards virtual and digital shopping.
The covid accelerated the digilux movement due fresh confidence in digital banking operations.
Most consumers are unaware of NFTs. Overall awareness of NFT is marginal and ownership is negligible.
NFT launches by a few Indian designers and celebrities did not take off as anticipated mainly due lack of any strategy and direction.
Resale and rent a luxury is beginning to see an increasing acceptance in first-time luxury consumers and is helping to expand the market. Luxury vehicles and watches contribute majorly to this pre-loved space.
The big fat Indian wedding, festivals, and gifts for such occasions remain to be large consumption opportunities. The pandemic has changed the wedding celebration into a much smaller event with limited guests but high-value expenditure on the venue, food, liquor, and of course gifts. It is not uncommon to see expensive cars, dresses, watches, etc being gifted away.
Not Just In Big Cities, But Small. A largely fragmented market, Indian High Net Worth Individuals (HNWI) can be located in many parts of this gigantic geography. Dedicated luxury malls are a handful and few – The Emporio and The Chankaya in New Delhi, The Palladium and Jio Drive in Mumbai, The UB City in Bangalore.
However, the customer bases have been identified in mini and upcoming metropolitan areas which are ready for the luxury explosion. Statistics reveal that 45 percent of the HNWIs are based out of non-metro cities. Interestingly, 65 percent of non-metro residents buy luxury on a regular basis versus 53 percent in metros.
Today, the desire for luxury consumption runs across cities like Chandigarh, Ahmedabad, Kanpur, Raipur, Indore, Hyderabad, Jaipur, Pune, Surat, Lucknow, Indore, Nagpur, and a number of other cities.
Luxury brands considering growth can no longer be relevant unless they extend their footprint to India’s non-metropolitan cities.
New Cultural Shifts Indian society is going through a cultural shift. From traditional to modern, from collectivist to individualist from large joint families to nuclear families. Indians are changing from being contextually rooted to becoming a more context free society. Religious traditionalism is being replaced by Desi-nationalist modernism. Intangible and spiritual to more tangible and material. From a subjugated, suppressed and hand me down identity to a more self-created and curated identity. Meritocracy is the driver rather than the traditional, hierarchal caste based societal norms.
Conscious over conspicuous Luxury means something that is rare. But since 2021 & beyond, the definition has become more progressive. It also encompasses that which is environmentally neutral, socially beneficial and culturally sustainable. The new standard of luxury doesn’t treat people and the planet like inexhaustible resources. It respects indigenous cultures and the interconnected nature of life. Newer acceptance of slow, sustainable and responsible luxury is the norm. People are preferring quality over quantity and are willing to wait for their unique product to be made in a slow and sustainable manner.
Not Always Physical, But Digital. The non-metro consumer is quickly catching up with his metro counterpart. The biggest catalyst of all, the pandemic has opened up access to luxury goods via digital and virtual channels.
Luxury buying via online shopping has added to the elasticity and variety of their experiences.
The shy experimenter has now taken to a host of digital channels to satisfy his desire for all good things in life.
More than the moral fibre of a brand or self-indulgence, luxury for those in non-metros is about upcoming trends and remaining relevant to their city tribe.
Leading names like Tata Cliq, Ajio Luxe, and even The Collective offer a variety of brands – some of which may not be available in an off line mode.
In fact, 50-55 percent of demand for luxury goods on The Collective’s e-commerce portal comes from cities where there are no physical stores.
As per the Atlas of Affluence, 2 out of 3 among the affluent had shopped luxury online for the first time during COVID19 restrictions.
Interestingly, 65 percent of those shopping online eagerly await for stores to open within easy accessibility. This perhaps explains the rush to physical stores with renewed frenzy and fanatic zeal.
The Purchase Drivers. As per a generational linked survey conducted by Atlas of fashion, the most important drivers for choice of luxury brands have been The Brand name, Its Logo and aesthetics and the customer service it provides, in that order of priority. Respondents across Gen X,Y & Z seem to agree to these as the most important deciding factors for choice of a brand.
India Is Not China, India Is India
Many brands have tried to compare and expect their China story to repeat In India. This may be a big mistake. India and Indians are unique, incomparable to none.
Indians in general are highly value-conscious. The definition of value changes not only by demographics but by geography, culture, family systems as well as age cohorts. They place a greater premium on value; they look for a greater return on their investment.
TO CONCLUDE
Today’s Indian is a lot more confident about his future. He sees affluence within a relatively easier reach. Many Indians hence want to claim a better quality of life. Since luxury brands initially surfaced in India, the pre-sales, during sales, and after-sales experiences have evolved to get closer to the global benchmark. Better quality talent, more educated, and exposure to luxury now serves demanding clientele. Acceptance of premium price points has become better and is thus accelerating further demand for premium and higher quality products and experiences.
Today’s Indian consumers seek luxury in every aspect of their lives— from car services to cosmetics, household furnishings to dining out. Brands today need to look at new ways to offer luxurious experiences even in the seemingly mundane. Indian consumers are looking for cutting-edge products & services to put them a step ahead of their peers. Trendsetting products or services, innovations that create talk-value will win big.
International brands must strive to understand Indian culture and customs to enhance their relationship-building efforts. This will shorten the distance between new introductions and a sense of familiarity in the marketplace and earn consumers’ respect. India remains an incredible opportunity. But luxury brands must take the time and make the effort to understand it. For all the opportunity, this complex market requires a deep knowledge of local culture to navigate.
With inputs from: The Knight Frank wealth report; The Hurun India Wealth report; The Atlas of Affluence; Various news articles across the public domain.
The above article was first published in Luxury Roundtable on Nov 2023 vide https://www.luxuryroundtable.com/2023/11/20/the-india-report-the-new-luxury-hotspot/ courtesy Mickey ALAM KHAN .
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