There is no deny­ing that the lux­ury re­tail seg­ment has evolved im­mensely over the last decade. Many brands have en­tered the In­dian mar­ket, few have left and a few are re-en­ter­ing In­dia as they feel the coun­try is now ready for them. In­dia’s lux­ury sec­tor

Images Retail - - CONTENTS - – By Prem De­wan

There is no deny­ing that the lux­ury re­tail seg­ment has evolved im­mensely over the last decade.

So, what is the rea­son for this rapid growth? There could be many fac­tors: The man­i­fes­ta­tion of so­cial me­dia, rise of emerg­ing mar­kets, sprout­ing aspirational youth and a grow­ing sense of ‘brand-con­scious­ness’ are pro­pel­ling the wheel of growth of lux­ury sec­tor in In­dia. Con­sumers are be­com­ing aware - and vo­cal - about their life­style, and looks, and are bold enough to ex­per­i­ment with dif­fer­ent fash­ions, sil­hou­ettes, color and fits.

Their shop­ping pref­er­ences are no longer de­pen­dent on fit or color of the prod­uct; they ex­pect an ex­pe­ri­ence at the bou­tiques. Also, there is a wider target au­di­ence re­sid­ing in Tier II and

III cities that have the propen­sity to buy lux­ury goods and are emerg­ing as new reser­voirs of lux­ury spend­ing.

The cur­rent mar­ket is steadily grow­ing across the coun­try. The most soughtafter for­mat of en­try for in­ter­na­tional brands is through fran­chise and joint ven­ture. Due to frag­mented and diver­si­fied cus­tomer base in In­dia, there ex­ists a huge op­por­tu­nity to the in­ter­na­tional brands. To cater to the In­dian mar­ket, some brands are tai­lor-mak­ing a col­lec­tion, which is In­dia spe­cific.

Cor­neliani has launched a new prod­uct for cus­tomers called ‘Court

Suit’ – a lim­ited edi­tion ‘In­dia-spe­cific’ prod­uct, band­hgala, Made in In­dia. Fol­low­ing in Cor­neliani’s wake, more and more brands are jump­ing on the cus­tom­ized prod­uct band­wagon. The cur­rent is clearly an in­dica­tive of how renowned in­ter­na­tional brands are adapt­ing them­selves to cater to the bud­ding In­dian lux­ury mar­ket.

We have ex­pe­ri­enced 12-15 per­cent growth in busi­ness since we took over the brand. The In­dian mar­ket has ac­cepted the brand very well and we have seen re­mark­able growth in terms of our clien­tele. At the store level, we en­sure that we build a re­la­tion­ship with the client and pro­vide a unique shop­ping ex­pe­ri­ence. Since peo­ple as­pire for lux­ury, in­ter­na­tional brands – to test the wa­ters and to look for new target au­di­ences – are ex­plor­ing trunk shows in smaller cities. Reach­ing out to the new elite in tier II and tier III cities is a grow­ing trend and th­ese trunk shows have been a mam­moth suc­cess. Lux­ury stores in In­dia are at seed­ing phase and are poised to rise. The in­tro­duc­tion of GST (Goods & Ser­vices Tax) will also pro­vide a com­pet­i­tive ad­van­tage to In­dia’s lux­ury sec­tor. We need to grow and ex­pand and move from tier I to tier II and III cities and fa­cil­i­tate sound in­fras­truc­ture.

The new lux­ury con­sumers are younger, bet­ter in­formed, more glob­ally ex­posed and more so­phis­ti­cated, so sale is not the fi­nal point in the word stock - it’s the on­set of the re­la­tion­ship with the cus­tomer.

With re­cent po­lit­i­cal and eco­nomic de­vel­op­ments and de­mon­e­ti­za­tion, sales have taken a dip as an in­stan­ta­neous im­pact. 2016 was a dy­namic and chal­leng­ing year in which the buy­ing pat­tern changed and there was a halt in lux­ury re­tail for a few months. The mar­ket may take a cou­ple of months to re­cover and gain mo­men­tum. Other is­sues that serve as road­blocks to the en­try and mar­ket­ing of lux­ury brands in In­dia are te­dious govern­ment poli­cies, cus­tom pro­ce­dure, taxes, high tar­iff and im­port du­ties, poor in­fras­truc­ture.

To swim through the tide and reach the other side, it is nec­es­sary for re­tail­ers to adopt a cus­tom­ized mar­ket­ing chan­nel strat­egy. A re­tailer must de­ter­mine how to suc­cess­fully ac­quire, en­gage, at­tract, sell to, and re­tain the di­verse and de­mand­ing lux­ury prod­uct cus­tomers.

To be suc­cess­ful in In­dia as a lux­ury re­tailer, it is nec­es­sary to gauge both the fi­nan­cial po­ten­tial as well as the mind­set of the In­dian lux­ury con­sumer. This will help in bring­ing forth the right prod­uct of­fer­ings to the In­dian con­sumer as well as tar­get­ing them bet­ter. Lux­ury has not lost its sheen; with growth of In­dia, lux­ury mar­ket will ob­vi­ously grow. Radu Ber­can /

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