There is no denying that the luxury retail segment has evolved immensely over the last decade. Many brands have entered the Indian market, few have left and a few are re-entering India as they feel the country is now ready for them. India’s luxury sector is growing at a rapid pace with international brands setting up shop here.
So, what is the reason for this rapid growth? There could be many factors: The manifestation of social media, rise of emerging markets, sprouting aspirational youth and a growing sense of ‘brand-consciousness’ are propelling the wheel of growth of luxury sector in India. Consumers are becoming aware – and vocal – about their lifestyle, and looks, and are bold enough to experiment with different fashions, silhouettes, colour and fits.
Their shopping preferences are no longer dependent on fit or colour of the product; they expect an experience at the boutiques. Also, there is a wider target audience residing in Tier II and III cities that have the propensity to buy luxury goods and are emerging as new reservoirs of luxury spending.
The current market is steadily growing across the country. The most sought after format of entry for international brands is through franchise and joint venture. Due to fragmented and diversified customer base in India, there exists a huge opportunity to the international brands. To cater to the Indian market, some brands are tailor-making a collection, which is India specific.
Corneliani has launched a new product for customers called ‘Court Suit’ – a limited edition ‘India-specific’ product, bandhgala, Made in India. Following in Corneliani’s wake, more and more brands are jumping on the customized product bandwagon. The current is clearly an indicative of how renowned international brands are adapting themselves to cater to the budding Indian luxury market.
We have experienced 12-15 per cent growth in business since we took over the brand. The Indian market has accepted the brand very well and we have seen remarkable growth in terms of our clientele. At the store level, we ensure that we build a relationship with the client and provide a unique shopping experience. Since people aspire for luxury, international brands – to test the waters and to look for new target audiences – are exploring trunk shows in smaller cities. Reaching out to the new elite in Tier II and Tier III cities is a growing trend and these trunk shows have been a mammoth success.
Luxury stores in India are at seeding phase and are poised to rise. The introduction of GST (Goods & Services Tax) will also provide a competitive advantage to India’s luxury sector. We need to grow and expand and move from Tier I to Tier II and III cities and facilitate sound infrastructure.
The new luxury consumers are younger, better informed, more globally exposed and more sophisticated, so sale is not the final point in the word stock – it’s the onset of the relationship with the customer.
With recent political and economic developments and demonetization, sales have taken a dip as an instantaneous impact. 2016 was a dynamic and challenging year in which the buying pattern changed and there was a halt in luxury retail for a few months. The market may take a couple of months to recover and gain momentum. Other issues that serve as roadblocks to the entry and marketing of luxury brands in India are tedious Government policies, custom procedure, taxes, high tariff and import duties, poor infrastructure.
To swim through the tide and reach the other side, it is necessary for retailers to adopt a customized marketing channel strategy. A retailer must determine how to successfully acquire, engage, attract, sell to, and retain the diverse and demanding luxury product customers.
To be successful in India as a luxury retailer, it is necessary to gauge both the financial potential as well as the mindset of the Indian luxury consumer. This will help in bringing forth the right product offerings to the Indian consumer as well as targeting them better. Luxury has not lost its sheen; with growth of India, luxury market will obviously grow.