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To Feel Like A Million Dollars
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The manager of a multi-brand watch retail outlet in New Delhi had this story to tell when asked about the new luxury consumer in India: a well-built Sikh gentleman from Amritsar in his mid-30s walked into the store to buy a watch. After going through a selection of high-end watches, he finally asked to see a Rolex. When shown an understated (matt finish, small dial) model, he asked for one with a big gold dial. His specification for the watch, which he articulated in chaste Punjabi, was that if he wore it and stood at one end of his field, the watch should be visible from the other end.
But that’s not all. He demanded a luxury experience. Having selected the watch, he demanded that it be delivered to him in Amritsar by no less than the manager himself. The Rolex bore a price tag of Rs 15 lakh, and the manager was more than happy to oblige.
Another story now. A Mumbai-based couple’s only criteria for their Valentine’s Day celebration was that the experience had to be memorable. They decided on the Valentine’s Day bespoke package offered by Taj Falaknuma Palace, Hyderabad. Customised invitations were delivered to guests by the palace butler, who even fixed appointments with Canali for ‘him’ and Burberry for ‘her’ to design the outfits. The chef discussed the menu with them over Skype, and a customised diamond ring was designed for the lady. A champagne dinner was served in the evening followed by a lavish champagne breakfast the next morning. The tab: Rs 10 lakh.
|CONSUMPTION OF LUXURY PRODUCTS HAS GROWN 29 PER CENT, AND 22 PER CENT IN SERVICES|
The luxury consumer in India is slowly but surely evolving from one who only splurged on high-end products to one who is willing to add an extra zero at the end of the final figure for the overall experience. “Being a luxury consumer is not just about buying an expensive product; it is an experience. It is all about feeling pampered,” says Sanjay Kapoor, managing director of Genesis Luxury, which brought brands such as Canali and Jimmy Choo to India. Says Tikka Shatrujit Singh of LVMH: “You must feel like a million dollars on purchasing a luxury product. The whole selling ceremony has developed into an art form now.”
Two To Tango
To woo consumers, luxury brands are doing everything to make the whole experience memorable: special screenings, VIP lounges, and even trips to their iconic stores in Europe. And the luxury consumer is keeping pace, by spending more on travel, fine dining, concierge services, spas, and the like.
According to the CII-AT Kearney India Luxury Review 2011, the luxury market in India is pegged at $5.75 billion and is expected to grow to $14.72 billion by 2015. While consumption of luxury products has grown 29 per cent since last year, services have grown 22 per cent. Fine dining has grown at a very fast clip, 40 per cent; travel by 22 per cent and spas by 27 per cent.
The Boston Consulting Group’s latest report Luxe Redux: Raising the Bar for Selling of Luxuries reiterates this: “…the most significant area of change in the luxury market is the consumer’s shift in preference from owning a luxury to experiencing a luxury.”
In fact, experiential luxury captures more than half of the spending share in most countries. In Brazil, Russia and India, the share of experiential luxury spending has grown at a CAGR of 27 per cent between 2009-11, versus 19 per cent for luxury goods.
Says Delhi-based Annika Talwar, who runs The Only Network, an event management and concierge service: “People are willing to go to any limits for that all-exclusive experience.” Her list of achievements includes organising a drive in a Lamborghini, and sourcing a Picasso.
Adds Gaurav Bhatia, marketing director at Moët Hennessy India: “The very definition of luxury has undergone a big change; what was once about ‘status symbols’ is now a lifestyle.”
The business of luxury experiences is not restricted to just exclusive safaris and spas, but has permeated into interiors and high-rise apartments designed by the likes of Armani. Be it customising a private jet or having a 24x7 concierge ready to pander to every whim, the luxury consumer is willing to spend if the final offering is unique, exclusive and memorable.
And the same level of service is expected while shopping for a luxury product. “Every customer needs to be treated as a prospective buyer and given the same level of respect and service. He may not buy today but if he is serviced well, he will buy tomorrow,” says Abhay Gupta, founder promoter and CEO of Luxury Connect, a luxury service organisation.
With money to spend and a desire to experience and experiment, the new luxury consumer has most definitely arrived.
(This story was published in Businessworld Issue Dated 24-09-2012)