According to a study by Deloitte released in October 2015, emerging markets in the next five years are expected to make up 50 percent of the luxury retailing industry worldwide. The luxury market is likely to witness unprecedented growth across categories including jewellery, fashion, automobiles and fine dining. And driven by increasing disposable income and aspirations, Indian consumer spending is expected to grow four times by 2017.
India’s luxury market has seen tremendous growth in the last few years. The market has been maturing at a steady pace with a change in the customer profile through the years. In 2012, India was the fastest growing luxury market in the Asia-Pacifi c region, brisker than even China and saw an almost 30 percent increase in 2013. The Indian Luxury market is expected to be worth $18 billion by 2017.
“Luxury and fashion have grown beyond cosmopolitan cities such as Delhi and Mumbai to cities like Ludhiana, Ahmedabad, Chennai and Hyderabad. Fashion Retail Businesses
are targeting these fashion conscious consumers including HNI’s and aspiring sections of
society that include young executives and entrepreneurs,” says Dinaz Madhukar, SVP and Mall Head, DLF Promenade & DLF Emporio.
The new luxury consumer is younger, better informed and more global. “With the emergence of a new class of affluent young Indians with great purchasing power, India is now a lucrative market to invest in for luxury brands,” Madhukar notes.
Luxury brands are adopting various strategies by offering a unique range of products that not only cater to the elitist segment of society but also the aspirational consumers. “A number of international luxury brands, including Hermès, Tod’s, Jimmy Choo, Christian Louboutin, Canali have launched India-inspired products to woo the new-age consumers. For instance, Hermès launched its limited edition silk saris and Canali has incorporated the famous Bandhgala Jackets of India in the Nawab Collection…the most recent being
the collaboration between designer Sabyasachi and Iconic Red Sole Designer Christian Louboutin to launch a unique collection for the Indian market,” she points out.
According to Madhukar, India is in the post-modernisation era and this has impacted the business of fashion in several ways. There is a vast improvement in standard of living, factors like price-consciousness has decreased, and the advent of technology (mobile & e-commerce) are leading to consumers demanding latest trends and products at par with the world’s best, she says.
The reach of the digital medium is far and wide, and has been a key factor in increasing the awareness of the international luxury brands in India. The course of social media sites such as Facebook, Instagram, Twitter, fashion blogs and dedicated fashion websites have further led to increased awareness in this space. The consumers today are well-versed with the latest trends and know what they want. Social media acts as an amplifier for communication between the brands and the consumers. It not only gives an opportunity to the brand to engage its consumers but also analyse the reach, as it is traceable, measurable and actionable. More and more luxury brands are engaging their consumers through digital platforms. Burberry was one of the first international luxury brands to successfully use Facebook for live streaming of their shows worldwide, posting visuals on Instagram and encouraging user engagement and interaction on Twitter. Their most successful digital campaign was ‘Art of the Trench’ where consumers could post their photographs and see themselves wearing the trademark Burberry trench coat.
“Another key driver behind the growth of the luxury market in India is the luxury shopping malls both existing and upcoming that have provided a truly conducive atmosphere, ensuring more exposure to the brands. Luxury brands are niche in their approach and look for the right space for their presence,” Madhukar notes.
DLF Emporio, for instance, houses over 104 international and Indian brands and offers bespoke services and experiences to the customers. “With the success of DLF Emporio and lack of space for new luxury entrants in the country, we have put in motion the construction of another luxury mall in Chanakyapuri in association with NDMC (New Delhi Municipal Council),” Madhukar says.
In 2014, the luxury market showed a very erratic trend that may be attributed to the general elections, however, since April this year it has been buoyant and this is an indicator for the coming years, she asserts.