Big Brand

Theories
Authors of three books which discuss the Indian
luxury market tell Debashish Mukerji
it is not an easy nut to crack

I t was something that intrigued Radha Chadha no

end while she worked in Hong Kong as Chief Strategy
Planner for global advertising agency Bates in the late
1990s. Girls in the office would go out in the lunch
hour and return with a pair of Prada shoes or a Louis
Vuitton bag, she says. Many of them were relatively
junior staff earning much less than I did. Yet they were
buying these wildly expensive branded products which
I, with my Indian sensibilities, wouldnt dream of doing.
She decided to explore the paradox more closely. The
result was The Cult of the Luxury Brand: Inside Asias Love
Affair with Luxury, written in collaboration with plan-
ning and development consultant Paul Husband, pub-
lished in 2006. Though it devotes just one chapter to
India, and was published when the Indian luxury mar-
ket was far less developed than it is now, it is invaluable
for its comparison of the the Indian response to luxury
to that of other Asian markets. Almost all other Asian
countries have blindly followed the West as they became

ore
Doing businin ess in India isAmsian
most other
difficult than of the high level of
se
countries becau s and regulations
le
ambiguity in ru adha Chadha, Co-author,
R
xury Brand
The Cult of the Lu

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Provide the
Ladder with
Rungs
In India, there are the super-luxury brands like
Chanel and Louis Vuitton and then theres a
steep drop to a premium brand like Tommy
Hilfiger. All the traditional bridge brands are
still entering India, leading to a temporary price
chasm that is far too wide for most Indians to
jump across. As a result the usual process of
graduating from a relatively inexpensive brand
to a more expensive one, to an even more
expensive one, until you finally plunge into the
luxury category, is simply not there. Its like a
jungle with a lion, a tiger and a few rabbits the
whole ecosystem has to be developed. Of
course its only a matter of time before this
anomaly is corrected.
In the meantime, luxe brands can help
provide rungs in the ladder in two ways. They
can pull in customers to their lower price point
items, the perfumes and lipsticks, the wallets
and name-card holders, bringing them into the
brands embrace and then graduating them to
more expensive items. Secondly, the
opportunity for diffusion lines is significant,
giving consumers the chance to work their way
up from Armani Exchange to Emporio Armani
to Giorgio Armani.
...India may be a luxury hinterland, but try
selling last seasons goods here and you wont
find takers. Thanks to the presence of a well-
travelled elite, luxury brands have been forced
to bring in the latest range. The same goes for
pricing: you have to be sensitive to the fact that
Indians compare prices with London and Dubai,
pet shopping destinations, and wont pay much
of a premium. Its not the money, although that
counts too, its the mindset of seeking
maximum value.
From The Cult of the Luxury Brand: Inside Asias
Love Affair with Luxury by Radha Chadha and Paul
Husband, Nicholas Brealey International, 2006
122 BUSINESS TODAY September 1 2013
Luxury-Writters 02.indd 4
richer, especially in matters of clothing, she says. They
all have their traditional apparel, which they abandoned
as soon as they could afford to. But in India the mix re-
mains, especially on formal occasions.
Serendipitously enough, it was in 2006 that Michael
Boroian, co-author, along with Alix de Poix of India by
Design: The Pursuit of Luxury and Fashion, first thought of
writing on the luxury market in this country. Currently
the Paris-based Managing Partner of Sterling
International, an executive search firm specialising in
luxury goods and fashion, Boroian has years of experi-
ence in luxury retail behind him, including that of being
Chief Operating Officer of a Hermes subsidiary in the US.
In 1998/99, my firm was asked to recruit people for
executive positions in luxury brands entering China,
he says. I discovered there was absolutely no informa-
tion on the luxury retail scenario in China. I thought it
would be a good idea to write a book on the subject, but
no publisher I discussed the project with was interested.
But when he suggested a similar book on India some
years later, the response was just the opposite. By then
the luxury market in China had exploded and publishers
realised what an opportunity they had missed, he adds.
They enthusiastically agreed to a similar book on
India. Published in 2009, India by Design is both a
primer for international luxury brands seeking to enter
the country it includes a How to guide, answers fre-
quently asked questions and provides exhaustive lists of
local partners for, and distributors of, global luxury
brands and a serious study of Indian history, demo-
graphics and culture to the extent these could impact the
luxury market.
Clearly one book was not enough. Last year there
appeared The Luxury Market in India: Maharajas to
Masses, a collection of essays by a range of experts, cov-
ering issues similar to those addressed in India by Design,
edited by Soumya Jain and Glyn Atwal. Jain is the Delhi-
based Chief Editor and CEO of LuxuryFacts, an online
luxury magazine begun in 2010, while Atwal is
Professor of Brand Management at ESC Rennes School
of Business, a leading French management school.
Atwal contacted me for help in compiling a book about
the Indian luxury market and we eventually decided to
edit the book together, says Jain. Her impetus for taking
up the project was the same as that which led her to
launch her magazine. I felt luxury is not covered in
India the way it should be, she says. It is taken too
flippantly, confined to the lifestyle sections, rarely focus-
ing on contemporary market challenges or the history
and heritage of luxury in this country.
8/8/2013 10:51:47 PM
 the
s b een s om e evolution onds
There ha e in India, many bran
luxury scen , some have been
have come in so m e le
ia
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successfu l, cr
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author, India b
yD
Boroian, Co-
Michael

So how do the three perceive the luxury market in
India? All agreed that the heightened interest of inter-
national luxury brands in this country was primarily
due to as Boroians own experience testified the
extraordinary success the brands had achieved in a
short span in China. But all three also felt that expect-
ing India to follow the Chinese path was nave.
Though the luxury market has grown in India since
my book was published, it has not done so as fast as it
could have, says Chadha. China, beginning in the
mid-1990s, grew much faster. Jain attributes the
relatively sluggish pace in India to a difference in mind-
sets. In China, patronising luxury brands has much
more to do with showing off and flaunting ones status
than in India, she says. The Indian consumer is more
thoughtful and far more price conscious.
Could it also be due to the global slowdown post
2008, which has drawn India too into its suffocating
embrace? Chadha believes that is possible, but Jain
disagrees. The kind of people who buy branded luxury
goods in India are not those whose personal incomes
have been affected by the downturn, she says.
Delhi versus
Mumbai
From the newly rich who are still encumbered
by the shackles of post-Independence
austerity, and who prefer to invest in a foreign
education than in the faux trappings of luxury
brands, to the so-called butterflies who are
ready to shed their cocoon, the demands of
the new consumer are far from uniform. Even
the elite range from Bollywood glamour to
subtle old money and anything in between.
Thus Louis Vuitton and other international
designer brands are far more successful in
New Delhi, with its more exhibitionist nature,
than in Mumbai. Indeed, Zainab Nedou,
formerly of World Luxury Council, says: In
Delhi, its the bling factor that counts, and
Louis Vuitton has become like Surf (a popular
detergent) everyone has it.
Certainly Delhi and Mumbai display
different consumer reactions and buying
patterns for luxury brands. Delhi is a media-led
city where socialites make Page 3 displaying
their recent acquisitions from trips to Gucci,
Fendi, Prada and LV in Europe, or in India as
the case may be. Mumbai, on the other hand, is
a culturally confident city in which Bollywood
and the advertising industry play a prominent
role. Here, high street brands do well, as do
watches and jewellery, the mainstay of luxury
in India today.
From India by Design: The Pursuit of Luxury and
Fashion by Michael Boroian and Alix de Poix, John
Wiley & Sons, 2010

124 BUSINESS TODAY September 1 2013

Luxury-Writters 02.indd 5 8/8/2013 10:52:07 PM

 ed to the
Luxury is confis,n rarely
lifestyle section temporary
focusing on conges or the history
market challen
n d heritag e of lu xury in India
a ket
ditor, The Luxury Mar
Soumya Jain, Co-e
in India

three books
th b k dwell
d ll att length
l th on the
th absence
b of
suitable retail space. Luxury brands cannot set
up shop just anywhere, says Jain. They need
high-end malls, and how many of these do we
have? Just three the DLF Emporio mall in Delhi,
the UB City mall in Bangalore and the Palladium
ADITYA KAPOOR/www.indiatodayimages.com

mall in Mumbai. The only alternatives are the

Boroian maintains that the downturn
in fact gave global luxury brands an
added impetus to try and crack mar-
kets like Indias. The financial crisis
slowed growth in the developed markets and led the
luxury brands to focus more on emerging markets, he
says.
But there are other factors too retarding the growth
of Indias luxury goods market. The Indian mindset, with
its emphasis on eschewing needless expenditure, the
infrastructural shortcomings of the country, the high
import duties for luxury goods, the restrictive property
regulations, the likelihood of counterfeit products flood-
ing the market, are all formidable hurdles. All agreed
that the lack of infrastructure was a huge problem all
shopping arcades of five star hotels, which many
luxury brands are indeed utilising. But five star
hotels also have the effect of intimidating and
keeping away the wealthy, but not overtly so-
phisticated, customer.
The books, however, also note the positives
for the future of luxury brands Indias big, fat
wedding tradition, the sizeable black money
economy, the growth of the BPO generation
which unlike its predecessors is guilt-free about
squandering money, the growing number of
celebrity endorsements of luxury products
which, company studies have shown, do pro-
mote sales. Luxury brands have also been
helped by the modification of some of the Indian
governments import policies, says Boroian.
Earlier, many Indians who travelled abroad
preferred to do their luxury shopping abroad too,
as items were cheaper, but the lowering of duties
has reduced the price difference.
Overall, however, the road ahead is unlikely
to be smooth. Luxury brands will have to be
very patient in India, says Chadha. Doing business
here is also more difficult than in most other Asian
countries because of the high level of ambiguity in
rules and regulations. Boroian agrees. There has
been some evolution on the luxury scene in India,
many brands have come in, some have been success-
ful, some less so, he says. But India remains a very
tough market to crack.
Send your comments to editor.bt@intoday.com

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