Indian luxury market is primarily driven by young aspirational consumers. Higher discretionary income, digitization and brand love inspire these consumers to indulge in luxury. Millennials dig deep into brand narratives and purpose over materialism. They may not emphasize only on the ownership and exhibition of material items but also on the sophistication and experiences. They want to engage with brands that reflect their personal values.
Though luxury in India is at a nascent stage, notion of luxury is undergoing a transformation. The important question that surrounds today is: As Indian luxury market is evolving, are the consumers transitioning from status signaling to self-transcendence? Is this an emerging phenomenon in the post pandemic world where consumers’ priorities are shifting, from flashiness to subtlety, from self-centrism to altruism, from conspicuousness to consciousness, from material-orientation to value enrichment and from being ostentatious to being responsible.
Here are the 4 key reasons behind this transformation:
- Mindful consumption– Growing number of young Indian consumers are now making more informed decisions. They show concern for society and environment while making product choices. For instance, they choose to eat locally produced food, wear ethical clothing, drive electric car and stay in green resort. Their awareness of what is better, more eco- friendly and humane, allows them to make right selections. Recent report by Capgemini Research Institute found that around 60% of Indian consumers in the age group of 18-24 have shifted to lesser-known brands which were sustainable. Also, 65% of the consumers confirmed that they will indulge in ‘mindful consumption’ in the new normal. Marketers must understand that consumers are willing to pay premium for better, healthy and ethical versions of ‘ordinary’ products.
Note: Brands must redesign their complete value chain to ensure it is ecologically and morally sound.
- Taste refinement– Massification of luxury goods and emergence of new forms of luxury such as rental luxuries have made these goods much more accessible, leading to fading of the signaling capability of conventional luxury goods. These goods no more exhibit wealth as today even masses can conveniently own second-hand luxury goods or experience high-end labels on rent. Therefore, growing number of sophisticated consumers in India now prefer to buy subtle brands over loud logos which reflect their true selves. They are seeking for exclusivity and savoir faire rather than popular brands. Brands like Bottega Veneta are targeting these select consumers who want to disassociate themselves from larger groups and resonate with people in their own closed group known as ‘insiders’. Loud logos that exhibit an individual’s wealth and opulence might seem distasteful in a post-pandemic scenario.
Note: As luxury is becoming ‘way of life’ for wealthy Indians, marketers should focus more on silent symbols than visible emblems.
- Experience-orientation– Millennials prefer to spend money on experiences that arouse positive emotions and provide sense of happiness. They seek pleasure in holiday trip with friends and family or rejuvenating themselves with a visit to a SPA as alternative to materialistic acquisitions. There is growing craze for genuine indigenous travel experiences from culinary sojourns to local sightseeing and culture trips. As per recent research by Deloitte around 50% of those surveyed in India want to spend more on experiences than on physical possessions. After prolonged pandemic related restrictions rich are now wanting to live in the moment and indulge in luxury and experience-oriented spending.
- Investment in real wealth– Luxury now has become a way to self-enrichment. Affluent consumers today put more emphasis on quality of life than ostentatious symbols. They want to indulge in guilt-free pleasures. They spend large monies on invisible experiential goods like education, health and well-being while reducing spent on tangible flamboyant goods. Particularly, with pandemic consumers have realized the fact that ‘less is more’. Recent report by CARE Ratings confirmed that with the increase in income levels and awareness, people in India are spending more money on quality education and health care.
Note: Luxury brands which showcase social status and cultural aspirations, need to reconsider their consumers’ evolving tastes and preferences.
(This article has been previously published in Luxury Daily.)