Kalyani Chawla, Vice-President of Dior India, is never surprised at the kind of customers who walk in through the doors of the luxury brand’s Emporio outlet in Delhi. Be it a young girl who has convinced her parents to buy her Dior sunglasses for her birthday or a couple from a small town who want a bag featured in a fashion magazine, Chawla knows they want it, regardless of the price tag. That’s all they may have in common. In that sense, she considers India’s luxury goods market somewhat inscrutable—there is no pattern of consumption or type of customer one can really pinpoint. The country’s demographic variety is reflected in the vast range of Dior products on offer here. “Entry level products, like sunglasses, for example, result in aspirational buying for someone wanting that special gift for an occasion, someone who perhaps could be in his or her twenties. They know that quality comes with a price which is worth it,” she says.
An important development is that some of Dior’s most coveted clients now belong to smaller towns and they know exactly what they want. “They come armed with incredible knowledge of the latest product of the season. These are the target audience of fashion and lifestyle magazines. Today, the luxury client has the understanding that apart from traditional jewellery and what is understood as an investment, a branded luxe item—like the Lady Dior bag—is also something that can be handed over from generation to generation.”
In the older India, splurging on a luxury brand may have been considered wasteful, but older India was poor. In new India, there is new money. According to Credit Suisse’s latest Global Wealth Report, India is projected to have 242,000 dollar millionaires—measured by saleable assets—by 2017, an increase of 53 per cent over the current count.
The Credit Suisse report also indicates that Indians spend heavily on jewellery, the market for which is estimated to be worth an annual Rs 22,900 crore; they buy private jets and high-end phones, and splurge on destination weddings. Market research firm TNS, in its 2011 study Global Affluence, pegged the number of affluent households in India at 3 million, drawing the country level on that score with China and placing it ahead of the UK (2.9 million), Germany (2.5 million) and France (2.7 million).
Shatrujit Tikka Singh, chief representative in Asia for LVMH (Louis Vuitton-Moet Hennessy), is no stranger to luxury and the people who buy it. “People who have arrived in life want to indulge in the best,” he says, “Now a cross-section of society—like captains of industry, movie stars and the affluent middle-class—is cultivating taste, thanks to travel and the media. They understand the brands and make it a point to be well informed. And that helps the brands. Everyone is reporting growth in double digits.”
Intriguingly, however, while India’s luxe market may be new, age-old perceptions still persist in their influence. All that glitters, for example, is good. And if the lure is a logo, it is no good if it can’t be flaunted. According to a representative of luxury phone brand Vertu, its clients are wealthy self-made individuals who see these phones as status symbols. And their choices confirm the Indian fascination with gold. “Customers in India are more biased towards our gold-plated products than anywhere else in the world. They are image-conscious individuals with an increasingly voracious appetite to stand apart from the crowd.” Watch brand Tag Heuer also reports that a fifth of its sales in India are of steel and gold timepieces.
Then there is the paradox of price sensitivity. While the to-buy-or-not decision may not depend on the price, the Indian luxe customer remains price conscious in the sense of being aware of comparisons. Even label loyalists often go shop to shop, or website to website, if not on a bargain hunt, then to acquaint themselves with all that’s on offer for how much—and where. Sanjay Kapoor, managing director, Genesis Luxury, a distributor of brands like Jimmy Choo, Armani, Bottega Veneta, Canali and Etro in India, says that Indians still compare prices in India to the lowest in the world, but unlike before, that doesn’t necessarily stop them from shelling out the cash.
Kapoor sees the customer base expanding to wealthy families who had the propensity to spend but were earlier shy of top-end brands. “Indians are now willing to spend large amounts of money on products that give them a higher status in life and make them look good before their peers,” he says, “The main set of buyers belongs to the upper middle-class, but the middle-class have also started buying small items occasionally or at End of Season sales.”
Franck Dardenne, general manager, LVMH Watch & Jewellery India, says that its brand Tag Heuer is successful here because Indian customers are now well aware of what sells in other countries. Not just Dubai or Singapore, but also London and New York. And so, even though such a watch can set you back by anything from Rs 63,000 to Rs 40 lakh, the Indian customer has begun to see value in its ownership. “Before customers knew what we were actually putting in our products, they wanted discounts,” says Dardenne, “But now they want to be sure they pay the right price for a timepiece which will remain with them every day.”
Stroll through shopping malls in Delhi and Mumbai, and you could play a game of spot-the-logo on people there. If a bomb has been spent on a logo, why should it be bad manners to flaunt it? But luxe marketers often frown at logos being shown off for nothing but the expense they signal (instead of being subtle revelations of qualitative aspects that clients discern as worthy). Such logo fixations, they fear, gives rise to something they regard as dangerous—a tendency to flit from one brand to another. “There isn’t as much brand loyalty as there should be because the consumer flits from logo to logo in search of the most visible announcement of having arrived…,” observes Kapoor, “What’s heartening is that though logos may be key drivers, quality still counts.”
What counts no less is an abstract appeal that’s greater than the catalogue of a brand’s products.
Anoop Prakash, managing director, Harley-Davidson India, has a clear target audience: self-made people who want to be recognised for their accomplishments, rediscover their sense of freedom and spend their leisure time with their peers. “Affluent Indian customers now know that buying a luxury bike like a Harley-Davidson is not just about buying one piece, it’s about an emotional connect as well,” he says, “And actually buying a Harley involves much more expenditure later along the way—you could customise it, and you would want to travel the world on it.”
Manav Gangwani of Infinite Luxury Brands, which has brought Roberto Cavalli to India, says that for foreign brands to succeed in this market, they must first gain a close understanding of Indian sensibilities.
“The Indian taste for finer things is not entirely new,” says Gangwani, “Wealthy Indians are big consumers of bespoke pieces—custom-designed pieces with the family coat of arms, family colours and initials written in local languages. Indian consumers are the ultimate luxury consumers. They also love the whole experience of walking through that beautiful store, being pampered by the staff, buying that product which makes you feel very special.”
Gangwani lays emphasis on ‘special’. For this, he says, is a land of special occasions. “The Indian market for luxury clothing is driven by the Indian wedding—a huge market of more than $1 billion. Western brands can tap this desire for India-inspired wedding clothing and jewellery. If only they would pay attention.” So, how about a Gucci lehenga with Cartier jhumkas?