The Indian market for luxury goods has proved to be a very lucrative market and the rate of growth has overtaken that of other consumer goods categories. Our long human history in India has shown us that luxury has been existed in one form or the other when it comes to practices related to consumption. It has been evident for centuries where luxuries such as silks were consumed for status, respect, and pleasure. Since the early 1990s, the luxury goods sector has grown at an unprecedented pace. As the economy has shown signs of recovery, consumers have started indulging themselves by spending on luxury goods. Economic growth leading to urbanisation and higher disposable incomes has helped propel growth of luxury goods.
Current Status: MBA Candidate
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University: SIES College of Management Studies
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LinkedIn: Mahalakshmi Mani
The current Luxury Apparel players in India include Hermes, Louis Vuitton, Gucci, Chanel, Jimmy Choo, Burberry, Dior, Bvlgari, Christian Louboutin, Fendi, Giorgio Armani, Versace, DKNY, Diesel, TOD’s, Tom Ford, Roberto Cavalli, Forever 21, Mango and many more. Recently, Jabong partnered Luxury Quotient to tap the online luxury market.
Luxury Quotient is a global distributor of luxury goods and has around 20 international luxury brands under its fold. Labels like Cette, Gregg Homme, Leonisa, Pamela Mann, Ivanka Trump, Falke, Anatomie, Dom Rebell, X by Gottex, Emilio Cavallini are now available on Jabong.com. Mango, Forever21 and Mothercare retailed under DLF Brands, are also exploring options to launch e-commerce site offering products under categories such as women’s wear, kids’ wear and so on.
The preferences of Indian consumers have always been different from their western counterparts considering the culture and religions. Price has been a sensitive factor; every brand had to keep in mind while eyeing a pie of Indian market. It’s an open secret that top-end luxury brands, such as Cavalli, Armani and Versace, struggled in India. Versace and Jimmy Choo, in fact, exited before re-entering, and Louis Vuitton had to close its Chennai outlet, while the affordable luxury brands seemed to be hitting a chord. Also, poor infrastructure facilities and lack of high-end streets/malls made it tougher for these luxury brands in standing coupled with high import duties. Indians who desired Luxury Apparels, preferred to purchase at global stores on their trips abroad. Despite so many challenges, the luxury sector is growing steadily at a pace of the Average 20% PA , several years in a row.
Luxury labels now seem to have understood the trick of doing business in India. They are introducing products and tweaking prices to match Indian sensibilities and distribution strategies to suit the local market. They have also realised the need to have a local partner, who understands the market well to offer better service and improvise when needed.
Christian Louboutin collaborating with ace Indian Designer Sabyasachi Mukherjee for Amazon India Couture is an example of collaboration between Indian and Western Luxury Labels. Supply of retail space for luxury brands is expected to double in the next three to four years; which is good news for a host of luxury brands present in India and eyeing an entry into the country.
Companies including DLF, Reliance Industries and Phoenix Mills have lined up a host of projects for high-end malls in Delhi, Mumbai, Chennai and Bangalore. Global luxury brands such as ‘Tory Burch’ or ‘7 For All Mankind’ are now available in India at a mouse click. From large luxury retailers like Saks Fifth Avenue, Macy’s, Harrod’s and Neiman Marcus, who have already started shipments to the country, online shopping platforms, are launching several luxury brands for the fashion-savvy consumers. Austrian jewellery brand Swarovski and American clothing brand Brooks Brothers have already begun offering their high-end products online. Premium products retailer Elitify.com is set to bring brands like Paul Smith, Furla, Emporio Armani and Armani Exchange, by partnering with Genesis Luxury, on its platform.
Increasing retail presence of luxury players across the country and higher numbers of luxury brands entering the country resulted in the strong performance of luxury goods over the review period. According to the ASSOCHAM-KPMG study, the Indian luxury market growth is estimated at 30 per cent and projected to reach $14 billion by 2016. Also, driven by increasing income and aspirations, Indian consumer spending is expected to grow four times to $4.2 trillion by 2017.