LUXURY GOODS IN INDIA

THE LUXURY TIMES

Residents from upmarket 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’.

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.

RECENT TRENDS

Jewellery, electronics, cars, fine dining, apparel, accessories, wines and spirit witnessed maximum growth.

Luxury has gone beyond Delhi, Mumbai and Bangalore to Chennai, Hyderabad and Pune.

North Mumbai and Gurgaon have emerged distinct hubs for luxury goods.

DRIVERS OF GROWTH

Aspiring middleclass with rising disposable incomes- the game changer

Privatization of airports providing a retail space for brands that fit in modern life, work, career, travel and international lifestyle.

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

PROGRESSION OF BRANDS

• Rolex, Louis Vuitton, Cartier

Luxury/Prestige brand

• Ralph Lauren, Calvin Klein, Tommy Hilfiger

Premium brands

• Numero Uno, Titan, Fast track

Fashion brands

ATTRIBUTES OF LUXURY

GOODS

Attributes of Luxury

Goods

Creativity

Exclusivity

Craftsmanship

Precision High quality

Innovation

Premium pricing.

BOTTLENECKS

Infrastructure challenges and regulatory constraints

Import taxes on luxury goods, which at the federal level are between 30%-40%

51% cap on the foreign ownership of their Indian units, which luxury brands fear risks diluting their name and harming their business models.

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

STRATEGIES FOR MARKETING

OF LUXURY GOODS

Customer engagement, personalized experience

Maintain exclusiveness

Separate line of goods available at lower cost; refurbished cars and line extensions

™Promoting luxuries as a wise investment; Villas

‘Targeted luxury’ memorabilia is given to the target segment in an attempt to fuel their desire for owning the product; Miniature models of Mercedes cars, key chains of Rolex watches

FOCUS AREAS

Price-value relationship

Reputation of the service provider

Product brand

NEW TERRITORIES OF LUXURY

BRANDING

Services

Real estate

Hospitality

HIDESIGN: A HOMEGROWN

LUXURY BRAND

Hippie brand born in the late 1970s.

The Puducherry-based company caters to the upmarket luxury end of the business.

French multinational Louis Vuitton has bought a stake in the company

The company has introduced ‘Holii’ range of accessories, in partnership with Kishore Biyani’s Future Group.