Strategies for brands to succeed in Indian Luxury Market
By Dr. Sheetal Jain
Indian luxury landscape is rapidly evolving. With rise in middle class population and increase in disposable income, demand for luxury goods has expeditiously increased in India. Be it Canali’s nawab suit, Chanel’s tote bag or Balenciaga’s clutch, luxury goods are flying off Indian racks. Ralph Lauren launched its first store this year in New Delhi’s luxury mall- DLF Chanakya and brands like Alexander McQueen and Saint Laurent are all set to have their first standalone stores in India by mid of this year. Indian luxury market is expected to grow tenfold in the next decade from the current US$30 billion to US$ 180 billion by 2025. However, India still lags far behind other developing economies like China in terms of its share in the global luxury market. India is a culturally diverse nation with varied languages, religions, food, music, dance and customs. With such diversity, Indian luxury market provides huge set of opportunities as well as challenges to luxury brands. Therefore, it is critical for luxury players to understand idiosyncrasies of typical Indian consumers to successfully serve this lucrative and growing market. Here are four key strategies for luxury brands to succeed in the complex Indian market.
Understand Indian buyers: Indians perceive luxury brands differently. Their values, beliefs and attitude towards luxury vary significantly from their western counterparts. Luxury goods are mainly purchased for personal or social orientation. Indians buy luxury primarily for social gratification. They go for loud brands and signal their status through luxury consumption. Therefore, marketers must highlight on symbolic value derived from luxury brands to gain traction from Indians.
Indians are extremely value-conscious buyers. They are now well-travelled and educated and therefore aware of offerings available in rest of the world. They want full product mix, latest variety and style without having to pay a premium for it. They compare the product and prices across markets and cease the best deal. Therefore, luxury brands must make sure that they maintain parity while catering to Indian market.
Indians, even today are skeptical about buying luxury brands. For instance, they may buy gold worth million dollars at the spur of the moment but when it comes to spending the same amount on luxury brands, they may consider it as a wasteful expenditure. They look for value of raw material and potential resale price while making their purchase decisions. However, with greater exposure towards the international luxury brands, this mindset is gradually changing. Luxury marketers need to raise brand awareness among Indians. They may hire opinion leaders, influencers or Bollywood stars to promote these brands. For example, Shahrukh Khan’s association with luxury watch brand Tag Hueur has been a great success.
Entice young luxury shoppers: Demand for international luxury brands is rising among young Indian consumers with increased access to internet, overseas travel and growing discretionary incomes. Millennials are the next rulers of luxury market. They are experimental, discerning and demanding. Luxury brands can no longer use standalone platform to attract and engage these consumers, they have to provide them seamless bespoke experience which is consistent across all platforms. Young consumers choose social media to stay updated, therefore, a strong social media presence is key for success of these brands. Marketers should unleash the power of social media to tell their brand story and engage consumers to tell their own stories of brand interaction.
Invest in sales personnel: Sales personnel are the brand ambassadors who serve as the face and voice of the organization. They interact with the customer and make or break the brand in their eyes, hence luxury companies should put sincere efforts to empower and enrich their employees. They should be trained to understand what the brand stands for, its DNA, history and heritage so that they can rightly pitch it in front of customers
Focus on innovation: As quoted by Peter Drucker, “Because the purpose of business is to create a customer, the business enterprise has two—and only two—basic functions: marketingandinnovation.”
Age-old luxury brands known for their history have been reluctant to embrace technology. Today, luxury brands need to be innovative to gain attention of new luxury consumers. It is through innovation that these companies can extend existing products and invent new products suitable for Indian customers’ need and wants. For example, Mercedes Benz introduced compact luxury hatch back A class, particularly for Indian market to attract aspirational buyers. Further, innovation is the best way for luxury companies to create space for themselves in competitive Indian market. For example, they must work on advanced real time data or AI based analytic tools to make informed decisions about their target customers
To conclude, to be successful in Indian luxury market, brands must innovate continuously with an enthralling brand story, a clear approach and a system to deliver a consistent, notable experience for consumers.
(This article has been published in Fibre2Fashion on 20 April, 2019).