BRIC

India’s Love for Luxury

Isaac Mostovicz writes that that luxury retailers must better understand Indian consumers in order to succeed...

A recent article published on the National’s business website has shown that luxury brands are eager to target Indian consumers. With a large population and a number of increasingly middle-class households on disposable incomes, it seems set to be the next destination marketplace for high-end labels. Louis Vuitton, Chanel, and Hermès amongst others have already invested in their global infrastructure to take advantage of this opportunity with varying levels of success.

Some retailers are finding the market trickier than others when it comes to selling to Indian consumers, perhaps due to a lack of investment in researching their target market’s tastes and opinions. Indian shoppers have different interpretations to their  European counterparts when it comes to purchasing luxury goods – for example, retailers that have designed targeted products with niche “Indian” appeal have flourished, as some retailers have found out.

Hermès in particular has tapped into this trend and, having recently launched its third store in India in Mumbai, has launched a line of limited edition saris in traditional orange colours. Launched with success, it’s clear that local insight and research are key in this marketplace.

Another issue that luxury retailers have struggled with is that the Indian luxury marketplace is still relatively immature. Some shoppers, despite significant levels of disposable income, don’t differentiate between “luxury” and “non-luxury” brands. There is also the issue of infrastructure. Where traditionally luxury goods would have been purchased through and stocked by boutiques in five star hotels, retailers have found a lack of shopping centres and malls has posed a problem.

Lastly, local partners are key. India rules that only 51% foreign investment is permitted in single-brand retail, and none in multi-brand retail, meaning that retailers must partner with a local body in order to expand in that marketplace.

Given that luxury retailers must better understand Indian consumers in order to succeed, such local partnerships can perhaps also offer greater insight into this wholly worthwhile market.

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New trends in luxury travel

Isaac Mostovicz writes that about the rise of luxury holidays...

China, India and Russia will account for a progressively larger percentage of worldwide luxury travellers, according to this recent article in Travel Weekly.

As younger luxury travellers tend to favour authenticity and adventure over opulence as they reject rigid sets of planned activities – something I have written about in the past as appealing to Lambda personalities – nature-oriented destinations such as New Zealand, and culturally vibrant places such as Peru will gain popularity, alongside “traditional” accommodation such as Yurts and eco-lodges.

Destinations in Europe are proving popular too, with over 40 per cent of all luxury travellers saying that their next destination would likely be in Europe, with France and Italy high on the list – destinations which would likely appeal to more traditional Theta personalities.

A report by the International Luxury Travel Market claimed that around two-thirds of luxury travellers make at least four trips a year, lasting on average ten days. Around one per cent of the world’s hotel rooms qualify as ‘luxury’, where room rates are approximately four times that of a chain like Hilton, so it is perhaps not surprising that over half of luxury travellers are between 45 and 54 years old, and earning at least $100,000 a year.

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