India The changing face of the Indian luxury consumer
The boom in India’s IT sector has produced a new type of luxury consumer in India: the “YUM” or young urban male.
He was typically a 35-year-old man. Born and brought up in wealth and abundance. He would often go to the exclusive foreign locations to vacation and work, and shop for the luxury brands when abroad. Despite being price sensitive, he liked flaunting the brands from different Maisons of Haute Horlogerie. This was the face of the Indian consumer in 1995, when there were barely two to three high-end watch distributors and five or six multi-brand watch showrooms in India. There was Finex Distribution with Raouff Ansari based out of Mumbai representing Cartier, Delaneau and others, Deepak Premnarayen, distributing Audemars Piguet and few other brands and Raymond Weil with Goel & Co.
In fashion, there was hardly any brand available in India. Except amongst a small percentage of elite rich, with names such as Hugo Boss, Canali, Paul Smith, Hermès, Ferragamo or even a high-street brand like Zara unheard of.
It was in the late 1990s that the first luxury segment, watches, started developing the luxury industry along with the car industry. Many international brands like Swatch Group (then the SMH Group), Chanel and LVMH Group were amongst the first to establish their subsidiaries and invest in the Indian market. In 2000, the Indian IT sector took on the world.
I feel India is like a pregnant woman for the luxury industry – its growth is certain and so is the outcome, but the exact delivery date is uncertain.
This enabled Indians as young as 24 years, professionally qualified but not traditionally rich, to travel and see the world. The young Indian was conscious of his looks and wanted to make an impression in the competitive corporate world and he wanted to own assets that had hitherto been the prerogative of the khandaani rayeez, the traditionally wealthy. He became the face of the evolving Indian consumer. In fact, the new age media labelled him as “YUM” short for young urban male. Media has educated this consumer who was happily consuming this new luxury awareness. By 2004 this new consumer was even younger in age with less familial responsibility, ready to spend income on himself and his wants, not just needs.
“Increase in high disposal income, lifestyle standards and accessibility and availability of luxury brands in the country (watches and other products) have changed the face of the Indian luxury consumer. Thanks to media, brand promotions and high visibility of luxury brands in the nearby countries (Dubai, Singapore, Hong Kong, etc.), the consumer is better educated and is showing more confidence while buying luxury brands,” explains Sharjeel Khan, Director of Zimson Times Pvt., which retails fine Swiss watch brands in India.
Sanjay Kapoor, Managing Director, Genesis Luxury, which holds the marketing and distribution rights in India for several international luxury labels, adds, “The initial phase of the badge/logo conscious consumer has given way to more of quality and heritage consciousness. The luxury consumer wants to go the next step and engage with brands that are high on quality and craftsmanship and they are also looking for more bespoke experiences than what is just available off the rack. ‘Exclusivity' is the new buzz word.” And the most important change has been that the new Indian luxury consumer prefers to purchase his luxury goods, especially watches, locally, says Anil Madan, Director, Johnson Watch Co. Pvt Ltd.
The luxury market in India has grown at an average of 20% per year on average and is expected to continue growing at the same rate for the next three years. The fine watch market (watches priced 84 US dollars and above) is worth approximately 250 million US dollars. Today India has 570 malls, including four luxury malls and brands like Zara, Canali, L’Occitane, MAC, Clarins, Paul Smith, Audi, Aston Martin and Ferrari have caught the imagination of even middle class India.
Although major names such as Corum, Hermès, Swatch Group and LVMH have subsidiaries in the country, young Indians are also looking for unique brands like de Grisogono and HYT. The Indian luxury market will take time to reach a significant size equal to Hong Kong or China but it is here to stay. I feel India is like a pregnant woman for the luxury industry – its growth is certain and so is the outcome, but the exact delivery date is uncertain.
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