Abhay Gupta, Founder & CEO, Luxury Connect &
Luxury Connect Business School
'Luxury - the mere mention of the term brings in instant images of grandeur, high fashion, designer clothing, fashion shows, bollywood, glossy magazines, page three and a generally high dose of sensual visual appeal.
It is another fact that luxury is much more beyondjust fashion !
It is a lifestyle and fashion is just a tiny little miniscule part of t. Businesswise, the most visible or voluminous part of the overall luxury trade, fashion has also been quite an employment generator.
In the last few years, luxury in India has been growing at a compounded annual growth rate (CAGR) of about 25%. As per a report by ASSOCHAM, the market is expected to hit 518.6 billion by the end of 2016 from the current Sl 4.7 billion.
The Indian luxury landscape is experiencing Strong evolutionary undercurrents that are redefining the consumer profile and how luxury players operate in this domain.
Besides fashion, service areas such as fine dining, electronics, luxury travel, luxury personal care and jewellery saw increasing revenues and are expected to grow by 30-35% over the next three years. Spending on luxury cars continue to rise growing upwards at 18-20% over the next three years. As the purchasing power of women is rising in India, the luxury beauty products market is witnessing a fast paced growth.
Additionally, Luxury is no longer the privilege of the few who were born into wealth. There is now a larger consumer base, which has the money to splurge but want a real value proposition. NO longer is luxury fashion out of reach — a true democratisation of luxury & fashion has taken place.
But how has luxury fashion built up over the years to its current pace? When did the lines between Indian fashion & International fashion start blurring? How is the 'made in India' movement going to impact the luxury fashion scenario? When will India produce a truly International Luxury fashion brand?
In the post independence era, the single most contributing factor to development of luxury has been fashion and the influence of the film industry on fashion. Bollywood has been an early adopter of fashion and a trendsetter where costume designers like Bhanu Athaiya started experimenting with film fashion in 1960.
The brain drain of the 70's and 80's and the NRl's trip to home brought in glimpses of fashion and luxury from the developed countries to a still 'third world' labelled India. Few of the rich who frequented overseas and were perhaps educated abroad enjoyed the westernised concept of luxury. Cousins would be requested to bring back a pair of 'Levi's jeans' during their trips abroad.
By early 1980s, the first generation of Indian fashion designers started to emerge, including Satya Paul. However, it was Rohit Khosla (1958-1994), who became a pioneer in fashion industry, when he founded Ensemble in 1987, with Tarun Tahiliani, Abu Jani-Sandeep Khosla and others.
Ritu Kumar, the doyenne of Indian fashion says, "Luxury has been an inherent part of Indian culture; whether it is jewellery or clothes or even lehengas, we have been exposed to high value pieces from a very early age. We have a 2000 year old culture of gifting silver and precious fabrics, we understand luxury."
Other names that impacted the luxury-fashion scenario include doyens like Sandeep Khosla - Abu Jeani ; Sumeet Verma ; Rohit Bal ; Tarun Tahiliani ; Manav Gangawanj. Modern and younger names like Rajesh Pratap Singh, Manish Arora, Sabyasatchi Mukherjee ; Manish Malhotra became the new global faces of Indian luxury.
The Indian design fraternity became the symbol of luxury until the late ninety's & early 200% when international luxury labels started to show their presence via multi brand Stores selling previous season stocks.
Amongst the initial international fashion brands who set foot into India, names like 'Lacoste' , '8enetton' ; 'Wrangler' ; 'Levis jeans' ; 'Reebok' ; 'Adidas' ; 'Louis Phillip' ; 'Arrow'; 'Tommy Hilfiger' etc are most prominent. Multitude of Indian brands cropped up and spread deep into India very quickly.
By the end 1 ego's to early 200Üs international brands had begun to be prominently visible in the urban wardrobes, though high duty structure and overall costs of imports, made it extremely difficult to establish this into a regular business.
However, retailers like Sehgal Brothers (The Blues - New Delhi) ; Benzer (Mumbai) ; Ffolio (Bangalore) etc were quietly teaching the Indian men to dress in Italian fashion by importing previous season stocks. The need to look 'different' from other men in similar circles was driving a small yet wealthy lot of customers to experiment with names like Ferre ; Versace ; Canali ; Hugo Boss ; Trussardi ; Princepe ; Valentino etc.
In 2005, the country's first full franchise agreements were signed for Versace Collection' & Corneliani'. Others followed soon when in 2008, India's first luxury mall 'Emporio' opened doors to names like LVMH ; Christian Doir; fendi ; Canali ; Hugo Boss ; Ferragamo ; Armani etc„ Bangalore and Mumbai soon joined in with UB city and Palladium respectively.
The luxury fashion scene in India had clearly begun to explode.
The world was reeling under an economic crisis and luxury brands were once again approaching the Indian shores. The difference being the new set of target audience - the new maharaja - the industrial wealthy - the film star - scions of booming business and the nouveau rich entrepreneur.
Luxury brands were responding and fuelling further growth, desire & craving for latent dreams. They are democratizing to introduce entry level brands & premium brands are scaling up to meet this new customer.
Despite challenges, difficulties, cultural restrictions, social norms, brands are adapting and creating special products & unique experiences specially suited for the Indian customer. Adaptation to Indian taste trends and likes is a norm. Hermes creates sari's ; Canali offers bandhgala's ; McDonald introduces McDonld Tikki burgers - all are attempts to remain in India for a long time to come.
Indian born designers like Prabul Gurang on the other hand have started to enter the fashion and luxury space from international ramps rather the other way round. Fresher names like a Shivan & Naresh ; Nappa Dori ; Rahul Misra and more recently Suket Dhir are making India proud. The initiation towards a truly global luxury brand from India has started. This set of designers has their vision clear - road map drawn and battle gear ready.
With the "Make in India" initiative the government has also extended its Support The time is not far off when India produces its first prominent global luxury fashion brand
Almost all the products made by Indian designers & artisans are virtually creating waves in the international markets as the exports of art metalware, woodware, hand-printed textiles and scarves, embroidered and crocheted goads have reported significant sales. Shawls, artuvare, zari goods and imitation jewellery too have found new markets. While woodwares has registered an increase of 5.88 percent over the previous year in exports, printed textiles registered 9.91 percent and embroidered crocheted goods 8.30 percent growth. "There is a tremendous market for us and we are moving ahead to capture the new areas. We are on our way to surpass all the previous records during the current fiscal through handicrafts exports," country's handicrafts development commissioner Dr K Gopal told TOI'.
While on one hand, brands like Fab India, Good earth, forest essentials, are attracting a new kind Of luxury consumer, on the Other hand bridge to luxury brands like Gap , Zara, H&M are creating new records of the look good - feel good' phenomena engulfing the young Indian.
Further, India is all set to become a manufacturing hub for global luxury brands in the next four to five years, according to a FICCl-Yes Bank report on luxury brands. According to the report, the manufacturing business of luxury items in India could grow to USS 500 million as global brands like Louis Vuitton and Frette are already looking at India as a manufacturing base, while others are sourcing their requirements from India. Moreover, the cost advantages, particularly in labour intensive sectors like leather and accessories will influence the manufacture of foreign brands in the country.
It is interesting to note that for years, aengalaru has been the luxury fashion manufacturing back yard. While may not be an active hub for Indian fashion, it is interestingly a pivotal nerve centre for fashion labels of the world. For- uber-luxury brands like Ralph Lauren, Burberry, Roberto Cavalli, Georgio Armani and Hugo Boss, 3engaluru is haute. The city is home to some fine garment export houses that are busy churning out ready to-wear ensembles for these big fat fashion brands.
Hence we could easily sum up to say that Indians have warmed up to global luxury brands for some time now. The trend over the recent years is so obvious that you cannot ignore the growth of this segment any more. While Hermes, Louis Vuitton and Gucci are the top three brands in India in the luxury segment, there is a growing appetite for newer luxury brands as well.
Brands such as Fendi, Burberry, aottega Veneta, Paul Smith, Jimmy Choo and Roberto Cavalli make the lifestyle statement of the upper middle-class and those in the top echelon. And this clear shift in consumerism has been passible as young Indians are now embracing global luxury brands. While women mainly look for bags, shades, clothes, shoes, wrist watches and lingerie, men are mostly shopping for brands like TAG Heuer, David Jones, Versace, Armani, Bass Orange, Fred Perry, Ralph Lauren and more. Then there are unisex luxury items such as cars and electronics, which are equally favoured by men and women. In most cases, both men and women show equal interest in luxury brands!
Walking on Jimmy Choos and Cavallis is the 'New India' that is showing all signs of turning the market in favour of global brands. Although India's share of the global luxury market is a paltry 1-2%, luxury retail brands - both national and international are in a hurry to set up shops in the county. And the main reason that the industry experts attribute to this positive growth is the fact that Indians are more 'brand aware' now, owing to their foreign jaunts. Well-travelled consumers and a stable economy, coupled with a young population with growing disposable incomes, spell 'good news' for luxury brands across the world.
Eventually, luxury is a long term business and India is a long term market. Indians are realising their own potential and creating their own unique identity and demand. Indian heritage is being rediscovered by the new youth and is being restored to its past -glory.
Luxury is here to stay and re-live it sglory again —glory that existed in the Indian heritage is being fuelled by a dynamic India, thriving, pulsating, breathtaking - as luxury' entwines its way back into an Incredible India.
The cycle is back to India where it all started for many luxury brands almost 100 to 1 50 years back !
From Maharaja to masses — luxury is all things truly Indian !