Dr. Sheetal Jain offers four key approaches
The Indian luxury landscape is rapidly evolving. With the rise in middle class population and increase in disposable income, demand for luxury goods has expeditiously increased in the country. Be it Canali's nawab suit, Chanel's tote bag or Balenciaga's clutch, luxury goods are flying off Indian racks. Ralph Lauren launched its first store last year in New Delhi's luxury mall DLF Emporio and brands like Alexander McQueen and Saint Laurent are all set to have their first standalone stores in India by the middle of this year. The Indian luxury market is expected to grow ten-fold from the current $30 billion to $180 billion by 2025. However, India still lags far behind other developing economies like China in terms of its share in the global luxury market. India is a culturally diverse nation with varied languages, religions, food, music, dance and customs. With such diversity, the Indian market offers opportunities as well as challenges to luxury brands. Therefore, it is critical for luxury players to understand idiosyncrasies of typical Indian consumers to successfully serve this lucrative and growing market. Here are four key strategies for luxury brands to succeed in this complex market.
Understand Indian buyers: Indians perceive luxury brands differently. Their values, beliefs and attitude towards luxury vary significantly from their Western counterparts. Luxury goods are mainly purchased for personal or social orientation. Indians buy luxury primarily for social gratification. They go for loud brands and signal their status through luxury consumption. Therefore, marketers must highlight symbolic value derived from luxury brands to gain traction.
Indians are extremely value-conscious buyers. They are now well-travelled and educated, and therefore, are aware of offers abroad. They want a full product mix, the latest variety and style without a premium. They compare the product and prices across markets and clinch the best deal. Therefore, luxury brands must make sure that they maintain parity while catering to the Indian market.
Indians, even today, are skeptical about buying luxury brands. For instance, they may buy gold worth a million dollars instantly but when it comes to spending the same amount on luxury brands, they may consider it as wasteful expenditure. They look for value of raw material and potential resale price while making their purchase decisions. However, with greater exposure to international luxury brands, this mindset is gradually changing. Luxury marketers need to raise brand awareness among Indians. They may hire opinion leaders, influencers or film stars to promote these brands. For example, Shahrukh Khan's association with luxury watch brand Tag Heuer has been a huge success.
Entice young luxury shoppers: The demand for international luxury brands is rising among young Indian consumers with increased access to the Internet, overseas travel and growing discretionary income. Millennials are the next rulers of the luxury market. They are experimental, discerning and demanding. Luxury brands can no longer use standalone platforms to attract and engage these consumers; they have to provide seamless bespoke experience that is consistent across all platforms. Young consumers choose social media to stay updated, and therefore, a strong social media presence is key for success of these brands. Marketers should unleash the power of social media to tell their brand story and engage consumers to tell their own stories of brand interaction.
Invest in sales personnel: Sales personnel are the brand ambassadors who serve as the face and voice of the organisation. They interact with the customer and make or break the brand. Hence, luxury brands should put sincere efforts to empower and enrich their employees. They should be trained to understand what the brand stands for, its DNA, history and heritage so that they can rightly pitch those to customers.
Focus on innovation: "Because the purpose of business is to create a customer, the business enterprise has two-and only two-basic functions: marketing and innovation," said management guru Peter Drucker.
Today, luxury brands need to be innovative to gain attention of new luxury consumers. It is through innovation that these companies can extend existing products and invent new products suitable for Indian customers' wants. For example, Mercedes Benz introduced compact luxury hatchback A class, particularly for the Indian market, to attract aspirational buyers.
They need to tell an enthralling brand story, a clear approach and a system to deliver a consistent, notable experience for consumers.