Bangalore/Mumbai: Rachita Parameshwaran, 28, a consultant based in Bangalore, spends a substantial amount on holidays. On a recent vacation to Singapore, she stayed at the upmarket Orchard Hotel, shopped at Swedish fast-fashion apparel store H&M and Spanish label Massimo Dutti. She flew Tiger Airways Singapore Pte Ltd, a budget airline.

Mixed patterns: A file photo of a store at a luxury mall in New Delhi. Photo: Priyanka Parashar/Mint

Consumer goods companies, which have reported robust earnings for the December quarter, are seeking to make sense of these trends as they aim to build on their recent performance amid an economic slowdown.

As far as the luxury market is concerned though, the findings seem to be heartening. AT Kearney Inc.’s study of the Indian luxury market for last year showed that it’s growing at 20%. In almost all 12 categories the company measured, actual growth exceeded estimates.

The company classifies luxury consumers under four categories—traditionally wealthy industrial families (high net-worth individuals), corporate executives earning 1 crore or more a year, small and medium enterprise owners, and aspiring luxury consumers with salaries of more than 10 lakh a year.

“This aspiring consumer, who does not have the income to justify the large spend, will buy small-ticket items such as glares, scarves, wallets and so on," says Abhay Gupta, executive director of Blues Clothing Co., which retails Versace and Corneliani products.

Parameshwaran falls into this category—one that’s growing faster than the others. But even luxury shoppers are looking carefully at price tags.

“All segments, save for the ‘traditionally wealthy families’, tend to be highly price-conscious," says Hemant Kalbag, head of consumer and retail at AT Kearney.

That perhaps explains measurement and data firm Nielsen Holdings NV’s findings that 23% of shoppers change stores based on best promotions offered. Moreover, 40% of them actively sought promotions in 2011 compared with 33% in 2010.

“There are a couple of reasons why this is happening," says Adrian Terron, executive director (retailer and shopper) at Nielsen India. “Luxury brands have become increasingly accessible and have become a part of the shopper’s repertoire, so the consumer uses other avenues to get a bargain."

At the other end of the scale, too, discounts are a powerful tool, reinforcing the theory that India’s a “value-for-money" market, evidence being the performance of Future Group towards the end of January 2012. During this year’s Sabse Saste 5 Din campaign, an annual five-day discount period at its Big Bazaar and Food Bazaar stores, Future Group posted record sales of 650 crore, 30% higher than last year’s event.

“Everyone likes the emotional hook of a discount," says Damodar Mall, customer director at Future Group.

But even here, there is no one-size-fits-all formula.

“During a sale, aspirational brands do well," says Govind Shrikhande, managing director of Shoppers Stop Ltd. “There are two kinds of customers—one for whom Tommy Hilfiger is an aspirational brand; another for whom even an Arrow or Louis Philippe is aspirational, as these are not cheap brands."

Shoppers Stop saw volumes drop in all categories during 2011, except handbags and beauty products, which grew 12% and 8%, respectively.

It helps to draw a distinction between the “consumer" and the various “shopper" avatars, suggests Nitin Paranjpe, managing director and chief executive of Hindustan Unilever Ltd. The same consumer will have radically different shopping habits depending on the purpose—whether it’s at the Louis Vuitton store in New Delhi’s DLF Emporio or at the neighbourhood grocery in Kailash Colony market, for instance.

“The behaviours they display are dramatically different and the finality is, it is the same person," he says.

Simply put, consumption patterns are becoming less uniform and less predictable. On a recent survey, Boston Consulting Group (BCG) executives visited a woman living in a 100 sq. ft Mumbai tenement. The consultants were there to study her consumption habits. While looking through the contents of her shopping, they were surprised to discover a packet of Surf Excel, a “premium" detergent that costs about 375 for a 3.8kg pack.

“I use Surf Excel to wash my children’s school uniforms," she said. For everything else, she uses lower-priced Wheel.

“Trading up and trading down is a global phenomenon, it’s difficult to pre-define categories, but Indians usually tend to trade up when it comes to their kids," says Amitabh Mall, partner and director at BCG India.

byravee.i@livemint.com

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