New Delhi: Luxury is a fast-growing category in India, but it remains a very small part of the overall global market. With a small base, growth numbers aren’t convincing by themselves, but Sanjay Kapoor, managing director of Genesis Luxury, is one of the people who feels that the market is ready to explode. Kapoor was one of the speakers at the Mint Luxury Conference in New Delhi and elaborated on this issues later in an interview. Edited excerpts:
How do you describe the typical buyer of luxury products in India?
The buyers are very varied, there’s no one average. But there are some traits you can say are common. On average, you will see the buyer who is a global citizen. The buyer in India is not so different from one in Malaysia or Singapore. People want to look and feel good, regardless of where they are from.
Is gifting an important part of the luxury business?
Not right now. Gifting is a typical part of our Indian culture, but right now, luxury buying is still all about self consumption. But that’s changing. I’d say that in five years things will look very different.
Speaking of traditional habits, are festivals, weddings a major part of the luxury market in India?
Absolutely. Wedding buying is the recession-proof part of our industry. But actually, this is only a small part of our business. The wedding market favours more traditional products and not so many high-end luxury products, though that’s been picking up lately, and luxury has been having its moment in the sun.
So weddings are recession proof. What about the rest of the industry?
No it’s only the wedding business that is recession proof. Luxury as a whole has also been good, but the reasons are different. We’re growing over a small base, and so growth doesn’t really mean too much. We have been growing quickly, but the industry is only five years old right now, so it’s hard to read too much into numbers.
Where do you stand on easing FDI (foreign direct investment) requirements, and lowering tariffs on luxury goods?
I think it’s a very good idea, and one that can only help. I personally believe that the more open a market is, the more quickly you’ll grow, and the more options that are available to consumers.
OK, but Genesis deals with both foreign brands and Indian ones, what are the pros and cons of the two from a business perspective?
There is definitely a big difference between the two. I think that there are different growth opportunities and potential for both Indian and international luxury brands, and I think that the two can easily grow side by side. One of our brands, Satya Paul, is now huge in 18 cities, and our own brands are as exciting as any international brand.
For both local and international brands, there is one thing in common, one thing that both kinds of brands need to do, and that is understand the customer.
E-commerce has grown steadily in India, but is it relevant for luxury brands?
Satya Paul has been very successful for us online, for the NRI (non-resident Indian) market. We’ve seen very substantial growth there in the last couple of years, but locally it’s not been significant. I know that brands like Myntra and Jabong have done well for themselves, but in the luxury market, online is still small because the customers still need to be educated about the products. It’s still a very new category, and people need to see and touch and feel a product before they buy it.
India is still lagging far behind China as a market. What do you see as the big challenges that need to be addressed?
The largest challenge today is infrastructure. Other than that, the weather is also not very favourable here, it doesn’t support the High Street. We can’t have something like Rodeo Drive or Bond Street in India. Aside from that, we have difficult import regulations and a lot of red tape and of course, the tariffs are also very high, at around 30-40%.
Red tape, tariffs, these aren’t things that you can address as an industry—so do you think that you need greater government intervention?
No I think we’re too small, we’re completely off the radar. That’s why things like tariffs and regulations were the last things I talked about. I think that the land costs are a big issue, and infrastructure is another one. These are government priorities anyway, I can only hope that we will see change.