'You Need Hard Cash To Buy Expensive Things'

In their book on luxury, The Cult Of The Luxury Brand: Inside Asia's Love Affair With Luxury (Research Press), Radha Chadha and Paul Husband during the course of interviews with retailers, industry experts and consumers gave a glimpse of the thriving luxury market in South East Asian countries. In the chapter 'India: The Next China?, the authors say 'the heightened interest in India today is because of the unprecedented success of luxury brands in China". Chadha also says in the book that the Indian luxury market at $100-million is at its best. This was in 2007. Today, a 2011 report by CII and AT Kearney pegs the Indian luxury market at $5.8 billion - approximately Rs 31,900 crore. Chadha acknowledges that the Indian luxury market has changed since then. "The culture of luxury brands in India has spread since then - more brands, more products, more stores, more cities, and of course, more consumers, " she says in an interview with BW Online's Sanjitha Rao Chaini. An IIM-Ahmedabad alumnus, Chadha is a brand strategy and consumer insights expert and runs her firm Chadha Strategy Consulting. Excerpts:
 
Do you think the definition of luxury is constant or do you think it keeps changing? Tell us your views...
The definition of luxury is tricky — it means different things to different people, and it varies by countries and cultures. It can be Dadi's wedding ear-rings handed down to you, or a spanking new Aston Martin that purrs just so, or a sunset shared with a loved one. Talk to luxury houses and they will tell you about heritage and craftsmanship, creativity and impeccable quality. Talk to old money and they will echo many of the same adjectives, alluding to timelessness, elegance, and exclusivity. Talk to a fashionista, and she will give you the buzz about the season's it-bag, the hot designer of the moment, and which celeb is wearing what.

But there is one defining factor — and this is the thrust of my book - that has fuelled the growth of the luxury industry: The unprecedented rise of new money in Asia, and the role that luxury brands have played in showcasing this newfound success for millions and millions of consumers. The logos and symbols have become convenient shorthand for displaying wealth.

You wrote The Cult Of The Luxury Brand in 2007. How has the Indian market changed ever since? How do you compare growth of luxury goods and its perception in Indian market vis-a-vis other Asian markets? What are the patterns you are seeing now?
The culture of luxury brands in India has spread since then - more brands, more products, more stores, more cities, and of course, more consumers. Interestingly, luxury brands are no longer a big-city super-rich phenomenon - it has filtered to second tier cities, and fanned out to the next rung in the social ladder.

Having said that, the luxury brand industry in India is still small compared to other parts of Asia, say China - which is the world's biggest market for many luxury brands — or the Middle East. I moved to Dubai last year, and was surprised to see almost every woman in a burqa carrying a Chanel bag, which starts at $2,000+. The growth of luxury brands is directly linked to the growth of the economy and the rise in personal incomes - you need hard cash to buy expensive things, it is as simple as that — and India still has a lot of growth ahead of it.

We have always perceived luxury to be something associated with an imported item. How do you think high-end Indian brands should work towards changing this perception?
When I was in college, a pair of imported Levi jeans was the ultimate luxury we hankered after! We have come a long way, but you are right, when we talk of luxury brands, we are mostly thinking of Western brands like Louis Vuitton, Rolex, Mercedes. If I have a wish, it is that Indian luxury brands grow and blossom. There is a whole crop of high-end clothing designers — and some are very good too - but growing to the stature of a Prada, Burberry or Hermes is going to take some doing. There are obviously a heap of things that need to be done, but I would focus on two things: one, worship impeccable quality in all its aspects, and two, develop a signature style in a sea of sameness.

Has social media changed marketing of luxury in India — or in any other markets globally?
Globally, luxury brands are using social media in a big way — for example, Burberry has 13.5 million 'likes' on Facebook, Louis Vuitton 9.4 million, Gucci, 9.1 million, and so it goes. Burberry has to be singled out as a champion of social media - and an innovator with initiatives like a tweetwalk (tweeting photos of the model before she walks the ramp) especially in an industry that was slow to embrace digital media.

In India, the size of the luxury industry is small, and so is social media activity. I'd say there is a distinct opportunity to use social media to spread the luxury culture in India.

Is luxury always something that money can buy? Or is there class, style and some exclusivity associated with it?
You can always buy the product. Style, of course, is a subjective thing, an aesthetic judgment.

High-end premium apartments, homes designed by Italian designers in India, customised holidays — do you feel the luxury market is moving from products to experiences and services?
In other countries it has typically followed the direction of products first, and then as consumers evolve in sophistication and affluence, there is a move towards services and experience. For example, a woman who happily spends $1,000 on a piece of jewelry, will baulk at a $1,000 per night luxury resort in an exotic location — it will take years, and a significant jump in her bank balance, before she pays top dollar for an experience.

But in India I find that it is all happening at the same time - products, services, experiences, all are growing. We are a huge country and development is reshaping lives in dramatic ways, leaving people at different levels of economic ability and social desires. And luxury companies are responding with products and services to match these desires.