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India's luxury market advances without the major international brands
Analysis 18 April 2010
France and Italy currently rank 9th and 10th respectively, in the top of international investor countries in India, behind major investors such as Mauritius, Japan,United States and Singapore. Most of the Italian and French investments investments are focused on FMCG, luxury industry registering insignificant figures. Most of the major international luxury brands in fashion/accessories, watches and jewelry have been content with a wholesale distribution, most of them having been unable to develop local franchising operations. Many brands blame their lack of progress on the strict legislation, bureaucracy and corruption, which are all at very high levels India.
But is China any different ? Or is Brazil an easy market ? We, at CPP, cannot agree. Like in the case of many important emerging markets, the majority of nternational luxury brands have applied a ''standard'' expansion policy, disconsidering the specifics of the market. It is true that politics and instability are definitory of the India market, but so is China. Unlike China, India has never embargoed Google or has never applied direct censorship on business dealings.
Luxury brands irrespective of the sector, have long expressed a keen interest in India, mostly because of the size of the market, yet very few such brands have closely analyzed the specifics of Indian market. For instance, India is a market which does not need to be ''educated'' in the sense which is applied in other emerging markets such as China or Russia.
It is in India that major brands such as HERMES have found not only inspiration but also techniques in manufacturing leather goods or silks. India's rich cultural heritage cannot be overlooked ! India's Taj Hotels have long been recognized as some of the finest hotels in the worldwide. Four Seasons, Shangri La or Kempinski have indeed found excellent investors in India and have developed spectacular projects, yet unlike markets such as Brazil or China, luxury hospitality in India has a heritage of thousands of years.
The same applies to clothing and jewelry. India not only has the finest luxury raw materials such as gold, platinum, silk or cotton, but also has extremely high quality craftsmanship. That is why, competing with local jewellers could prove challenging to the most reputed international luxury jewellery brands. The same applies to fashion, where traditional tailored clothing is still a must for the wealthy individuals. There is also the ''luxury show off'' factor, which is very different compared with other emerging markets such as China. While Chinese wealthy consumers prefer to wear the same branded products like their piers, Indians often wish to appear different, unique and special, hence the very creative craftsmanship and finishings of any luxury products made locally.
Oliver Petcu