India's luxury market unlocking consumers' taste for the finer things

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NCRD’S STERLING INSTITUTE OF MANAGEMENT STUDIES INTERNATIONAL BUSINESS PRESENTED TO: PROF. DR. MANOHAR PANDIT PRESENTED BY: VARSHA GOLEKAR (A-18) MANGESH DUBEY (A-) SHAHNAWAZ SANTOSH RAJPUT KUNAL

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Transcript of India's luxury market unlocking consumers' taste for the finer things

Page 1: India's luxury market unlocking consumers' taste for the finer things

NCRD’S STERLING INSTITUTE OF MANAGEMENT STUDIESINTERNATIONAL BUSINESS

PRESENTED TO:PROF. DR. MANOHAR PANDIT

PRESENTED BY:VARSHA GOLEKAR (A-18)MANGESH DUBEY (A-)SHAHNAWAZSANTOSH RAJPUTKUNAL

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India's Luxury Market: Unlocking Consumers' Taste for the Finer Things

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LV ladies handbag

RS. 55000/-*

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ASSOCIATED WITH…

HIGH QUALITY CRAFTSMANSHIP UNIQUENESS CREATIVITY EXCLUSIVITY

INNOVATION

LUXURY GOODS

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STILL UNTAPPED…….

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Luxury Products & Services Cars: Jaguar, Mercedes Benz, Lamborghini, Rolls Royce, Bentley, Ferrari, Bugatti

Couture: Versace Indian couture designers: Rohit Bal, Tarun Tahiliani May not include prêt designs

Hotels & resorts: Amar Vilas (Oberoi), Four Seasons

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Accessories

Footwear: Jimmy Choo

Handbags: Louis Vuitton, Aigner,Leiber, Hermes, Prada

Small leather goods: Dunhill

Watches: Piaget, Tag Heur

Eyewear: Armani, D&G, Chanel

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Luxury Products & Services

Perfumes: Channel Jewellery & Gems: Cartier, Tiffany

Writing instruments: Mont Blanc

Luggage: Louis Vuitton Liquor: Henessy (vodka), Blue Label, rare wines Art

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Hike in the salary

High Standard of living .

Luxury becoming a status symbol.

Stylish appearance

Better Performance

Ungroup to move, recolor, or delete levels.

Increased durability

Luxury in India has become more accessible.

“Bollywood is an influencer”

Reasons for emergence of luxury retail in India

Advanced features

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Residents from up market south Mumbai households drink milk from 'happy cows‘. Priced at Rs 75 a litre, the milk is extracted from Jersey- Holstein cows which listen to soothing music and consume specially grown fodder.

In 2010, a consortium of industrialists in Aurangabad placed an order for 150 Mercedes cars worth Rs.65 crore. (Customer profile: Entrepreneurs in their 30s and 40s)

Hero Cycles has forayed into the premium bicycle market by launching cycles priced at Rs 43,000, under the brand name ‘Urban Trail’.

THE LUXURY TIMES

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The story in India

Luxury is not new to India but the modern form is yet to evolve

Branding Lasting customers relations Signature look Virgin market

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PERSPECTIVE

Luxury market grew at ~20% in 2010-11 and is valued at ~$5.8 billion, currently.

World Wealth Report by Cap Gemini Merrill Lynch estimates the number of Indian high net worth individuals with liquid assets of over $1 million at 1,53,000.

A study by Wealth-X, estimates that there are 8,200 ultra-high net worth individuals (UHNW) in India with a combined fortune of $945 billion.

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The Indian luxury market is evolving more rapidly than most of us had foreseen. The luxury market witnessed robust growth of 20% in the year 2009 and is estimated to have reached USD 5.75 billion in 2010. Luxury products have grown the fastest at 29% to reach a size of USD 2.05 billion, well above expectations of 23%. Services have grown at 22% to reach USD 0.95 billion and assets have grown at 13% to reach USD 2.75 billion

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Growth rates by categories

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Luxury Wines and SpiritsSource: A T Kearney analysis

SECTOR FOCUS

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State wise liquor market structure in India

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Personal Care

Total market and luxury market segmentation in India by value (2010)

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Breakdown of personal care market by value (2010)

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Classic luxury will co-exist with selective indulgence, guided by ‘trusted advisors’

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The Sachdev Group – Priya Chatwal & Charu Sachdev

Brands: Lanvin, Alberta Ferretti, Jean-Paul Gaultier, Moschino,

Stella McCartney

Promoters of Luxury in India

Genesis Colors

Sanjay Kapoor of Satya Paul fame Brands: Aigner, Canali, Kenzo, Paul Smith,

Just Cavalli

Murjani Group : Gucci, Jimmy Choo, Calvin Klein, Bottega Veneta

Brandhouse Retail (S.Kumar Group): Escada, Dunhill

JV’s in the pipeline DLF with Armani Hermes with Neelam Khanna (PRS Oberoi clan) Reliance Retail

TSG International Marketing Pvt Ltd

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Limitations of luxury in India

Lack of appropriate spaceAdjacencies important – nightmare McDonald’s Started with use of hotel spaceMakeshift space in malls/marketsEmporio – perhaps the first luxury mall in India

Expensive real estateLack of trained manpower

Specialized programs in Institutes

Lack of Indian products & brands FDI restrictions

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Scope for Indian brandsCan you think of an Indian luxury brand???

India’s strengths: excellence in craftsmanship, heritage, business potential Some suggested areas: hotels & hospitality, spas, jewellery, meditation (Mahesh Yogi), art, Indian fashion

Acquiring Western brands: Tata acquires Jaguar from Ford in the UK

Oberoi hotels: Rajvilas, Udaivislas, Amarvilas

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Aspiring middleclass

Privatization of airports providing a retail space for brands that fit in

modern life, work

Government showing interest in increase in FDI limits to 100% in single brand retail and 51% in multibrand retail

DRIVERS FOR GROWTH

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ESSENTIALS FOR LUXURY BRANDS IN INDIA

‘Expansiveness’ (meeting divergent needs) Must tell a story (identity) Relevant to the consumers’ need Align with consumers’ values as luxury goods are forms of

expression or identification for a luxury consumer Must perform

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STRATEGIES 1234

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Customer engagement, personalized experience

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•Maintain exclusiveness 2

•Separate line of goods available at lower cost

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•Promoting luxuries as a wise investment; Villas

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• ‘Targeted luxury’ 5

6 • Seasonal product branding

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Price does matter again…

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Traditional luxury brands dramatically accelerate their internet activities

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