“Luxury In India–Pitching to whom?”
By : | January 5, 2013

India is a complex market. If its infrastructure and retail problems were not enough, Indian consumers too don’t want to make it very easy for luxury brands to market themselves in India. It’s no secret that globalization, increasing choices of careers, BPOs and other factors have made making money easier. These gave rise to a new crop of luxury consumers, who may not know the difference between an Alexander McQueen and a Gucci, but still want to flaunt these labels as a showcase of their early success.

But the new money consumers differ widely from old money consumers. Of course, marketing to these two groups differently is very important as well. And an intricate job might I say…

Most of the nouveaux-riches don’t understand luxury and just follow brand names. Luxury to the old money consumers, however, means beauty, elaborate products, that would enhance the quality of life. Many old money consumers are not pleased with the increasing boundaries of luxury. Consequentially, luxury brands that have started catering to the recent, new crop of luxury consumers are losing favour with the old money.

New money consumers earned their wealth quickly and are keen to make a statement. Luxury is a status symbol and they focus on conspicuous consumption. While old money consumers haven’t spelt out their status. They tend to indulge in luxury because of their actual value. They prefer brands with a rich heritage and quality, and generally buy on the basis of their personal interests and needs. Also, new money consumers are more attracted to luxury accessories while old money consumers have a broader consumption area.

While the new money are splurging on over-the-top signs of luxury, the old money seem to be rethinking their choices and preferred brands. Walking on a tightrope, one wrong decision can prove risky for a brand. Cater to the new money and old money consumers shun you. Cater to the old money and you risk losing all those massive sales from the new ones.

With the unstable economic scenario looming internationally, brands know that losing even a small sale, from anyone, is not an option. So while the Taj Group has Taj Mahal & Palaces hotel to cater to the black tie, Vivanta by Taj lures the upwardly mobile, young professional who wants to have a good time. Brands are, thus, targeting both in myriad ways.

Most brands target both the markets through sub-brands. For example, Judith Leiber recently launched Overture, a slightly more affordable range of miniaudieres, while Corneliani has a new line called ID, which is more trendy and stylish.

When a consumer steps on the first rung of luxury consumption, they prefer logo-driven brands, to enhance their social standing. So any product or brand which relatively shouts out its name is an easier sell to the new money. That’s where Louis Vuitton’s signature Speedy sells like hot cakes in India. However, for aristocrats and erstwhile royals, who still swear by Louis Vuitton, the brand’s bespoke service makes more sense. It’s custom made for them as a product which no one else will have.

Even though catering to both the markets is possible and feasible, it is recommended for brands to pick which of the two segments is their ‘primary’ target and which is secondary. Hermes, however, is quite the diamond in the rough. It has no separate sub-brand, but still enjoys an enviable cult following. They do have small knick-knacks like scarves, like other brands, for the aspirational consumer. But everyone knows that getting their hands on the Hermes Birkin is no small feat. But does Hermes lose potential sales because of these high exclusive curtains I don’t think so. On the contrary, every girl knows that owning a Hermes Birkin signals that finally she has become a mature consumer. It’s like the coming of age ceremony. Hermes plays a very smart game of quality.

Another aspect to keep in mind is that the value and characteristic of each sub-brand needs to be communicated carefully, and separately, to its target audience. Create a distinct personality for each sub-brand or product, so that the consumer also understands which brand identity they want to, and can afford to, don on themselves.

India is a complex, confusing, diverse market. Clearly, there is no one formula to tap these millions of consumers. But as you take the trial and error approach, make sure that at any stage, you don’t end up losing the consumers’ trust in the basic philosophy of your brand.

Soumya Jain is the Chief Editor & CEO of LuxuryFacts (www.luxuryfacts.com), an online magazine which lets readers retreat into the glamourous and heritage world of luxury across all sectors. LuxuryFacts also encourages discourse on how luxury brands can grow and increase their presence in certain markets. She is also the Co-Editor of The Luxury Market in India: Maharajas to Masses' (published by Palgrave Macmillan). Prior to LuxuryFacts, Soumya was a member of the editorial staff for the magazines MillionaireAsia India and Asia-Pacific Boating India.