The Luxe Factors6 min read . Updated: 28 Sep 2012, 01:10 AM IST
Edited excerpts from The Luxury Market in India: Maharajas to Masses
Edited excerpts from The Luxury Market in India: Maharajas to Masses
In The Luxury Market in India: Maharajas to Masses, editors Glyn Atwal and Soumya Jain channel a number of contributors to provide insight into the nascent Indian luxury market. Through the book, they aim to provide a snapshot of the current state of affairs and the shape of things to come. Exclusive excerpts from the book that will release in November 2012.
We mentioned at the beginning of this book that the luxury market in postmodern India is experiencing the first stage in its growth. As India enters this new era, marketers need to be prepared for the next phases of development. The social and economic fabric of India is changing fast, leaving India a complex, unpredictable and sometimes confusing market. Tomorrow’s India will be a very different India to that which we observe today. The challenge will become greater as new consumers emerge and old consumers mature. However, the long-term rewards of this potentially massive market will continue to stimulate interest and attract investment. So even as brands presently struggle to gain a foothold in the country, luxury marketers need to start identifying future influences if they are to stay ahead of the game. We have identified the following factors that we believe will impact the Indian luxury market in the years to come.
REDEFINITION OF LUXURY
Luxury consumption will increase in terms of absolute market size, maturity and complexity. The world of luxury will expand to include broader swathes of society, including first time consumers such as young urban professionals, Punjabi farmers, and small and medium business owners. Consumers who are not based in the metropolitan cities of Delhi, Mumbai and Bengaluru will not want to miss out either. Luxury shoppers will adopt a brand that will match their financial restraints and lifestyle aspirations. New entrants into the world of luxury will start valuing the acquisition of luxury brands as a way up into the social hierarchy, while the current consumers will slowly move up the ladder as they increasingly appreciate luxury for its internal benefits and craftsmanship. As existing consumers mature, they will start seeking haute and bespoke luxury brands for the experiential value that they can deliver, coupled with unrivalled aesthetics and quality. Luxury will become more personal for these consumers, and deriving true pleasure will become a driving force of luxury consumption in the future.
CULTURE OF LIFESTYLE AND LUXURY
Luxury has traditionally enjoyed an aura of exclusivity and status in India. This is changing in terms of how consumers are embracing luxury as a language of self-expression. This is particularly prominent amongst the so-called ‘Facebook Generation’ and young urban professionals, increasingly conscious about the image they wish to project to the outside world. This is leading to new and different consumption habits. The essence of luxury will be less rigid in the traditional sense and become largely elastic and flexible. First, consumers will continue to trade up to buy a luxury brand that will be mixed and matched with mainstream brands such as Zara to develop a unique personal style. It will not be uncommon to see professional women donning a Zara jacket with a Burberry bag. Second, these consumers will also be more likely to buy fake luxury fashion brands as well as authentic luxury brands in order to create the right look and image. Third, consumers will mix local inspired styles with Western fashion to create a fusion of an Indo-Western look. Finally, consumers will seek new luxury consumption occasions that go beyond traditional events such as weddings and festivals, which will also encompass untapped product categories such as interior design. A universal theme here is experimentation and style that will create an even more vibrant culture of fashion and lifestyle.
A double page advertisement in the women’s magazine Femina (November 2011) urged women to ‘Face the world with confidence’. The advertisement was for Botox which is one of the many beauty, cosmetic, fashion and jewellery brands that are targeting a segment that has been traditionally ignored by advertisers and marketers alike—women. The new urban woman will represent a new growth opportunity for luxury brands. The rationale is simple: empowerment. Only 20 per cent of India’s urban women work, but in a traditionally male dominated society, the evolving roles and growing influence of women is changing the balance of power. A sense of independence (not only financial) is enabling women to make their own choices. A survey found that 42 per cent of highly educated women in India earn as much as or more than their spouses, com- pared to just 25 per cent in the United States. This changing dynamic provides women choices ranging from marriage to careers and how to spend money. In short, increasing numbers of women have a desire to succeed on their individual terms. They know what they want from life. This self-belief will have a positive impact within the luxury sector, in particular within sectors such as fashion and beauty. Women are shaping their own identities and luxury brands will play an increasingly important role in facilitating this transformation.
The emphasis for many luxury brands in India has been focused on getting hard factors, such as distribution and brand image, in place. As luxury brands get established in the marketplace, consumers will not only expect, but come to demand, the same or even better service delivery in India than in other parts of the world. Brands will therefore need to invest in delivering global standards of service. For example, Indian service engineers at BMW’s dealerships in India have been trained at BMW’s training centres in Singapore, Malaysia and Germany. There will also be a need to focus on the development of soft skills. The recruitment, training and management of employees as brand ambassadors will be critical in ensuring that the values of the luxury brand are seamlessly communicated to the customer.
Indian managerial know-how within the luxury sector will be increasingly valued globally. The acquisitions of Jaguar by Tata and Escada by Megha Mittal are just two examples of how luxury brands, which have been bought by Indians, have not only retained their heritage, but also sustained success after the acquisition. As the International Herald Tribune commented, ‘Tata Motors should be rightly proud of the success it has achieved in reviving Jaguar Land Rover’s fortunes.’ International players will be able to learn novel best practice from Indian stalwarts. For instance, It has been observed how the organizational culture at the Taj Group has given the company a distinctive and competitive advantage within the hospitality sector. Luxury skills and competencies will start travelling from East to West, with consumers being the ultimate beneficiaries in both markets.
The story of luxury in India is not breaking news. History is repeating itself, albeit, in a more evolved way and with a larger consumer base. Yet, the road to success in India is not a straight one. Necessarily, it is rather convoluted. Luxury brands will continue to learn in this complex market and grow. Capturing a place in the Indian market will require not only intelligence combined with intuition, but a long-term commitment and desire to turn dreams into reality. Errors will be made and fortunes also. Welcome to India.
The book is published by Palgrave Macmillan in hardcover (232 pages) and is priced at £60.
Glyn Atwal is associate professor of marketing at ESC Dijon Bourgogne, an international graduate school of the French network of Grandes Ecoles. His teaching expertise includes luxury marketing and emerging markets. Prior to academia, Glyn worked for Saatchi & Saatchi, Young & Rubicam, and Publicis.
Soumya Jain is the chief editor and CEO of LuxuryFacts, an online luxury magazine. She is also a visiting lecturer in luxury marketing at leading business schools in India. Prior to LuxuryFacts, Soumya was a member of the editorial staff for the magazines MillionaireAsia India and Asia-Pacific Boating India.