In the 19th century Russian writer Nikolai Gogol’s famous story, The Overcoat, the protagonist, a frugal middle-rung government servant called Akaky Akakievich, finds that his threadbare old overcoat can keep out the harsh Russian winter no longer. He visits his tailor, who tells him it is time for him to buy a new overcoat. “At the word ‘new’ all went dim in Akaky Akakievich’s eyes,” writes Gogol, for a new coat is, for him, an unimaginable luxury.
Most Indian middle class readers over the age of 30 would entirely empathize with Akaky Akakievich’s feelings, having grown up in an atmosphere where frugality and discipline were emphasized and the prospect of an unforeseen expense was, as with Gogol’s protagonist, literally a shock to the soul.
But, as Radha Chadha and Paul Husband document in their book, The Cult of the Luxury Brand, Indian and Asian attitudes towards consumption are fast changing and one of the most striking aspects of that change is the appetite we now possess for branded luxury goods. In the span of a generation, from the 1970s and 1980s onwards, the money power of an emergent Asia has revolutionized the luxury goods industry. In a world where traditional social hierarchies have broken down or become less relevant, branded goods have become the new markers of status, wealth and taste.
The authors do not proffer an opinion on the question of whether this trend of rooting identity in consumption is for the good—they would argue, I think, that it is not within their remit to measure the real against the ideal. They seek only to understand how and why it has come about, and in that they have plenty to offer that is of interest.
Chadha and Husband limit their survey to luxury brands worn on the person—clothes, shoes, accessories, handbags. They find that more than half of the Rs3,500 crore spent on luxury goods of this kind round the world each year now comes from the pockets of Asians—particularly the Japanese, who are the world’s “luxe gluttons” (94% of women in Tokyo in their 20s possess a Louis Vuitton handbag).
Not only that, the greatest potential of the luxury goods market for further growth also lies in Asia, in the emerging economies of China and India.
What explains this sudden craze for Louis Vuitton, Prada, Gucci and Christian Dior, names that elicited little response in Asia 25 years ago? Chadha and Husband explain that Asia’s economic rise has been so swift that it “is almost entirely about new money”—that is, the arrival of spending power without established notions of what to do it. In an atmosphere where “the rules of consumption and the canons of taste [are] fluid and loosely defined”, the big western luxury brands, with their associations of quality, exclusivity and cosmopolitanism, have been able to exert a massive influence on consumer behaviour. Chadha and Husband also think that the collectivist nature of Asian cultures, which encourage conformism rather than a robust individuality, have also influenced the trend. To be well-off in Asia and not wear branded goods is to be seen to be “a lesser person in the eyes of other people and yourself”.
The authors have researched the book extensively and their chapters on different Asian markets (each one ending with two or three pages of tips on what it takes to succeed in that particular market) throw up some interesting observations. While in Japan both the entrepreneurial and the salaried class are heavily investing in luxury goods, in China it is high officials in government who are discreetly leading the way. Most luxury brands purchases in China, as also in India, are paid for in cash. “Ironically,” the authors note, “grey money is the perfect amniotic fluid for luxury brands to develop in.”
India’s luxury-brand spending is currently minuscule—only about Rs440 crore annually. But it is a market with huge potential, as midnight’s children, to use the authors’ felicitous formulation, are gradually replaced by liberalization’s offspring—the size of the Indian middle-class has quadrupled in the last decade.
India is also a complex market that needs careful understanding: It has both old money and new money (and even the new money is subdivided into the entrepreneurial class, the class of executives and the brand-loving baby boomers of the call centres), as also pronounced seasonal trends in luxury-brand shopping. The wedding industry is huge and Bollywood has a massive influence on fashion trends and brand promotion. “India may be the next China,” conclude Chadha and Husband, “but ultimately luxury-brand marketers will have to think Indian to win India.”
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