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Different Strokes

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I like shopping in Madison Avenue in New York," says Kavita Singhania, grand-daughter of Ramnath Goenka, wife of Yadupati Singhania and promoter of Express Avenue, an upcoming destination mall in Chennai. "If I compare India with London and New York, there is absolutely nothing here yet." Generally assumed to be a conservative and cautious spender, the Indian luxury consumer has also proved to be discerning and well-informed.

The Indian luxury buyer can be classified into three types — old rich, wealthy professionals (CEOs, senior management, NRIs), and first-generation entrepreneurs. Sarvajeet Chandra, managing partner of Master Sun Consulting, a strategy execution firm, defines the three: "The wealthy professional is a global citizen. He would be quite amenable to buying a home in Dubai or London. The first-generation entrepreneur is keen to flaunt his wealth, and looks at luxury goods as a way to signal ‘having arrived' in life. The old rich are trying to keep up." 
 
The band of consumers is difficult to stereotype, however. "Consumers of luxury brands have no age restrictions," says Sangeeta Assomull, CEO of Marigold Group, marketers and distributors of international luxury brands in India. "A young client buys a Louis Vuitton or Judith Leiber just as much as consumers in their 50s, or even older." Only first-time buyers look at ‘entry point' products of famous brands. And if old money still spends on conservative heads such as jewellery, the young prefer clothing, cars and lifestyle products.

"It's not like luxury is new to India or Indians," says Atul Mehrotra, co-founder of Evoluzione, a high-end store in Chennai. "Yes, the presence of international luxury brands in India is new. Today, a person buying an iconic automobile is also a potential customer for all luxury products. But will he embrace all these products in the same way? This can't be said with any certainty." Nothing, it appears, can be said with certainty about the Indian luxury consumer. She is price-sensitive, likes to be discreet, sees luxury as a price-tagged reference, is ecologically aware but not to the extent of her western counterpart, and sees the overseas luxury shopping experience as vastly superior to that in India. She does not fit into any stereotype, making the country's luxury market tough to crack for global luxury brands.

Interpreting The Price Tag
India is a price-sensitive market, even in the luxury segment. The Indian consumer is willing to pay top dollar for the best, but she also keeps close tabs on international prices. "We want to bargain; we want to feel we have got a good deal," says Vikram Phadke, co-founder of Evoluzione. Jewellery, of course, is the hot favourite (see ‘What Are They Buying?'). Typically, the Indian consumer prefers to spend on collectibles (jewellery, watches, art and the like) than experiences (travel, spas, hotels). "For the latter, he prefers to go abroad as they cost more and come with less quality in India," says Phadke.

Indian luxury travellers are also not overly adventurous. "Some Indian travellers are yet to go beyond the five-star league where the out-of-the-ordinary experience cou-nts more than the luxury hotel, fine dining, caviar, cigars, single malts and shopping," says Rajesh Khanna, executive director, sales and marketing, Abercrombie & Kent India, specialists in customised travel. On the other hand, western travellers also seek high-end hotels and experiences, but do not always attach much importance to luxury hotel brands.

Industry watchers also feel that the Indian luxury consumer feels constrained to binge on luxury products, with scenes of poverty and despair all around. "Indian consumers have tremendous spending power, but also feel great shame in spending exorbitantly on luxury products in their home turf," says Charu Sachdev, who heads the luxury retail wing of the Sachdev Group. "But when in London, Paris or Dubai, they will happily spend. Even NRIs visiting their country of origin suddenly don't feel it is ‘correct' to spend so much on a bag or dress." Adds Phadke: "He wants to buy, but does not want to be seen as buying."

That does not mean ostentatiousness is ruled out. "The sari worn for a gala dinner or wedding is never understated," says Assomull. "In India, the equivalent of a ‘little black dress' for a formal function does not exist!" There are also significant differences in luxury spending and attitudes in different regions. "The south Indian is still discreet; and as one heads north geographically, the Indian luxury buyer gets progressively flashy," says Phadke. 

 The Aspirational Buyer
With the explosion of luxury products — not many know that Bvlgari owns B&B Italia and Ferrari owns five furniture companies — the trickle-down effect has played an important role in increasing the numbers of luxury consumers, especially at the aspirational level. But the Indian market has some limitations. "The western consumer's exposure levels are very different," says Mehrotra. "We (in India) have the 8, 9 and 10 price levels, and we have the 1 and 2 price levels, but nothing in between. The western buyer has 20 options in price level 1, 100 options in level 2 and 50 options in level 3 — all he has to do is mix and match." Agrees Singhania: "I can buy a simple T-shirt and wear it with a luxury handbag, or I can match a pair of jeans with high-end shoes. The aspirational buyer will buy one and not the other, but the ensemble will still look fantastic."

"There are various segments of luxury consumers in India," says Sanjay Kapoor, founder and head of Genesis Colors, which has brought high-end European luxury brands such as Paul Smith and Canali to India. "The more evolved consumer, who is very comfortable with brands, buys based on choice. The entry-level consumer prefers well-known brand names. That said, while branding helps, it has to be substantiated with quality, design, style, and the buying experience." Everything, unfortunately, is not here yet.

Luxury in India goes back very long. The country's royal families have always been associated with luxury brands. For example, the Patiala family has an old connection with Louis Vuitton. "The quest for perfection and quality has not changed," says Amin Jaffer, director of Asian Art, Christie's, in London. "One difference now is that advances in technology and communication, travel and cultural exchange have enabled new ideas and trends to be assimilated much more quickly."

Made for Maharajas, Jaffer's last book, explores the taste among Indian princes for luxury goods from the West. With their extensive means, Indian princes favoured labels such as Cartier, Boucheron, Chaumet and Louis Vuitton with sustained patronage, and whether resetting their jewels with the leading goldsmiths of London and Paris or ordering fleets of cars, the maharajas were among the leading creative patrons of their day.

 FOREIGN-MADE PERCEPTION

 There was a time when a cousin would bring a ‘Made in USA' luxury shirt from an overseas trip, and the entire family would swoon over it. For many people, however, buying luxury even today means buying overseas. A.A. Zaidi, 55, a luxury products consumer, puts it in perspective: "Spurious and counterfeit items were all over (in India earlier); as a matter of habit we do not trust products sold in India." From energy drinks to high-end bags, clothes and accessories, even international brands selling their wares in India are not fully ‘trusted'.

"It is hard to get the same quality as in the US; the quality differs," says Gurleen Boparai, a US citizen, who studies engineering in India. Showing his latest buy, a Louis Vuitton bag, he says, "I bought this in Europe. The feel is different." Sidharth Sharma, a Ludhiana-based industrialist, agrees. "Most brands have Indian partners that manufacture products here," he says. "How would I know that the product I am using is authentic?" Also many feel that international brands in India do not offer as much variety as they do overseas. Hopefully, as the Indian luxury market matures, both quality and variety will be taken care of.
                                                                                
Anilesh S. Mahajan

"The revival of this ‘collecting sensibility' has played a pivotal role in the modern and contemporary art market in India, and will be critical in the development of the jewellery market over the next few years as well," says Minal Vazirani, president and co-founder of Saffronart, an online art and jewellery auction platform. New services such as Web-enabled catalogues, pre-selected suggestions, ‘private rooms' on websites, and m-commerce have made luxury purchases easier as well as discreet. They have also made luxury more accessible, which is something greatly needed if the Indian luxury consumer, and the market, is to grow to global standards anytime soon.

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