consumer insights

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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