030413334916_TheSmartManager,luxuryinindia,GlynAtwal,_Mar-Apr-2013.pdf

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illustrationb

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Even the best luxury brands are easy prey to the threat of fakes and deluxurification.


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luxury in india Atwal

The Smart Manager Mar-Apr 2013 www.thesmartmanager.com 79

After the first installment on the ways in which Indian luxury has redefined perceptions

about the country as well as the industry, and the second one that addressed building

memorable brand engagement with customers, the third and final installment of this

special series on luxury in India explores themes such as the role of new media in brand

propagation, and the looming risk of deluxurification veiled by the lure of a vast,

untapped market.

GLYN ATWALIS ASSOCIATE PROFESSOR

OF MARKETING AT

BURGUNDY SCHOOL OF

BUSINESS, PART OF THE

FRENCH GRANDES COLES.

HE IS ALSO AN AUTHOR OF

THE LUXURY MARKET IN INDIA:

MAHARAJAS TO MASSES

the limits of luxury

he luxury market in India is complex,

unpredictable and sometimes contradictory.

The ongoing evolution of the Indian consumer

society is creating new opportunities and

challenges. Luxury players need to assess which future

influences can impact their long-term strategies to succeed

in India.

TThe following nine trends demonstrate that the

dynamics of the Indian luxury market are contrary to

the common belief that a one size fits all strategy can be

applicable to emerging markets.

the depth of luxury

Luxury in India has always been about the value of the raw


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www.thesmartmanager.com80 The Smart Manager Mar-Apr 2013

material. Indian traditions dictate gold jewelry as a good

investment. However, the concept of luxury is changing,

invoking a deeper meaning based on extrinsic and intrinsic

values. For example, jewelry brands such as Tribhovandas

Bhimji Zaveri (TBZ), Notandas & Sons and Ganjam have

developed distinctive brand identities based on design,

while Lodha Fiorenza is using celebrity designer Jade

Jagger for [the interior design of] its signature residences

in Mumbai. The raw material is no longer enough. Indians

are looking for the exclusive experience, prestige andsophistication a luxury brand can deliver.

luxury know-how

As new consumers emerge and old consumers mature,

increasing connoisseurship will be evident among the more

experienced luxury consumers. The segment of consumers

in the know will favor quality, heritage, craftsmanship

and exclusivity rather than the logo. This will result in new

market growth opportunities for haute and bespoke luxury

brands in India.

new mediaThe significance of new media as a distribution and

communications channel for luxury brands is not a

new phenomenon. However, new media will have

particular relevance in India for three key reasons. First,

ecommerce will reach emerging luxury consumers

outside the metropolitan cities where luxury retail is

limited. Next, India enjoys a young demographic profile

that is particularly tech-savvy. Finally, the relative lack of

knowledge and experience means that Indian consumers

are searching for information before they commit. Digital

luxury will be a cornerstone of a brands strategy to connect

with the emerging luxury consumer in India.

Indian fusion

International luxury brands are increasingly accepting that

Indian consumers cannot be allured by all things foreign.

The strategy of Indian fusion that combines global brand

values with Indian influences should soon become a core

feature of international luxury brands in India. Whether itis the saris by Herms or the bandhgalaby Canali, Indias

signature of contemporary, yet traditional, luxury will be

increasingly evident. Indian fusion will not just be limited

to the product or service offering, but integral to the overall

luxury brand experience.

deluxurification

As luxury brands reach out to newer, affluent and

aspirational consumers, luxury brands risk eroding their

exclusiveness, which helped them to be perceived as

luxurious to begin with. This condition of deluxurification

is of particular relevance in India due to factors such as thevalue-seeking mindset of the Indian consumer, the social

acceptance of fakes and the mass exposure of luxury brands

via Bollywood. Luxury brands will face the dilemma of

striking a balance between accessibility and exclusivity.

targeting the fairer gender

The urban woman in India will become a prime target for

luxury brands. Empowerment has given women greater

autonomy in making their own choices from marriage

to careers and ultimately on how to spend money. A case

in point, Spirit of Nero, an exclusive womens whiskey

club that was launched at Le Meridien in Delhi, makesan opportunity out of this exact phenomenon. A sense of

confidence and self-belief is helping women to shape their

identities, and this will drive luxury consumption from

fashion to beauty to automobiles.

brand integrity

Corporate social responsibility has become fashionable

in the global luxury industry. However, the need for

Digital luxurywill be acornerstoneof a brandsstrategy toconnect withthe emerging...consumer.


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luxury in india Atwal

The Smart Manager Mar-Apr 2013 www.thesmartmanager.com 81

luxury brands to demonstrate a commitment to social

responsibility is more pronounced in India than in any

other emerging market. The historical influences of

the values of Gandhi are still deep rooted in the Indian

mindset. Excessive, unnecessary spending is sometimes

still frowned upon by many middle-class households.

The implications are significant. Luxury brands will need

to weave integrity into the brand story if they are to be

coherent with consumer sentiment. A striking example

is how Hidesign has positioned itself as an ethical luxury

brand that respects eco-friendly traditions and practices.

brand India

Consumers in and outside of India will start recognizing

'Made in India' as a label representing high quality,

creativity and authentic luxury, replacing the earlier

perception of India as a land of inferior goods. Indian

luxury brands such as Abu Jani-Sandeep Khosla, Ganjam,

Lecoanet Hemant and Taj Hotels Resorts & Palaces have

found growth opportunities in international markets that

celebrate the brands provenance. The expression of Indian

luxury will be increasingly valued globally.

new luxury

The growing mass affluent segment has created a demand

for affordable luxury in India. New luxury, as defined by

Silverstein and Fiske as products and services that possess

higher levels of quality, taste, and aspiration than othergoods in the category but are not so expensive as to be out

of reach,1is set to fill this significant gap.

Starbucks, Godiva, Dolce Vita and Natures Basket are

some examples of new luxury brands targeting the lifestyle

aspirations of the new luxury consumer. New luxury is set

to become a culturally accepted consumption experience

for the growing number of middle class consumers.

The changing culture of luxury consumption in India

will challenge international luxury players to align their

strategies with the needs of the market. Market success or

failure will depend on the ability of international brands to

capture the luxury rupee by employing innovativeness andcreativity in product and marketing strategies. A new era

beckons luxury brands to plan strategically for the future

and seize the market. n

New luxuryisset to becomea culturallyacceptedconsumptionexperience for...consumers.

01 M Silverstein and N Fiske; Trading Up: The New American Luxury;New York: Penguin Group; pp1; 2003.

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