Famous fashion Designer Gabrielle Coco Chanel (1883-1971) stated that luxury is a necessity that begins where necessity ends. Similar ideas were acknowledged by the famous economist Veblen (1899), in his book The Theory of the Leisure Class, who explains the concept of conspicuous consumption as the waste of money and/or resources by people to display a higher status than others. Luxury is concept related to status, ego and psychogenic needs; it is not necessary for survival. Luxury goods have always been associated with high quality, craftsmanship, uniqueness, creativity, exclusivity and innovation. Apart from these product attributes, the consumers also get the additional psychological benefits like esteem, prestige and a sense of a high status that reminds them and others that they belong to an exclusive group who can afford these expensive goods.
The overall sales of luxury goods in the year 2009 is expected to be more than US$150 billion and Asia contributes 10% to it. The concept of luxury is now not confined to only to Europe and US, the Asian subcontinent contributes majorly to it, with India and China as the newly emerging markets. Professor James Twitchell (2002) comments on the democratization of luxury and the changing consumer psychology These new customers for luxury are younger than clients of the old luxe used to be, they are far more numerous, they make their money far sooner, and they are far more flexible in financing and fickle in choice. They do not stay put. They now have money to burn. The competition for their attention is intense, and their consumption patterns-if you have not noticed- are changing life for the rest of us." Patrick Normand, managing director of Cartier (Middle East & South Asia), discusses the potential of Indian luxury market, The growth of India as a luxury products market, and its emerging potential is very obvious now especially as the economy is booming and there is a general positive sentiment towards global brands. According to the latest Asia-Pacific Wealth Report, there were an estimated 1, 23,cartier love ring rose gold price,000 millionaires at the end of 2007 in India, up 22.7 percent from the previous year; making it a huge potential market for the international luxury players. As per Forbes magazine (March, 2008), financial capital of India-Mumbai-ranked seventh among worlds top 10 cities where largest number of billionaires resides. Still luxury market is at a very nascent stage in India. As discussed in Luxurion World 2009 in Mumbai, the Indian Luxury Market is estimated to be to be USD 4.35 billion and this forms only 2% of the global share. For an Indian owning a luxury brand would mean accomplishment. According to a study by American Express, Inside the Affluent Space, Indian consumer has a desire to prove that Ive made it. He is an aspirer and for him luxury is a reward, which is a mindset very different from a European consumer for whom luxury is an experience.
India as a retail market is not uniform, especially when it comes to preference for luxury in terms of need fulfillment. Moreover, the market is not as mature as the European market where consumers seek fulfillment through experience. Few players have been able to fulfill the needs of the Indian luxury consumer. Since this segment of market remains untapped, huge potential lies in the same. Therefore, it becomes important to delineate the needs of the Indian consumer to target them better. To be successful in India as a retailer, it is necessary to gauge both, the financial potential as well as the mindset of the Indian luxury consumer. Localization of global luxury brands is essential to tap the huge potential of the diverse market. It requires understanding of luxury product market characteristics and developing the brands accordingly. This will help in bringing forth the right product offerings to the Indian consumer as well as targeting them better. Moreover, limited accessibility to luxury in India is a barrier to its growth and acceptability. There are several cities in India which have a huge potential for luxury which still remains untapped.
Luxury products are exclusive pieces of craftsmanship driving the aspirations of many but owned by a few. Luxury has different meanings for different people (Kate, 2009). To some consumers luxury goods provide a means to lifestyle, some adapt luxury to their lifestyle and there are still others who require these to make a statement of their wealth (Okonkwo, 2007). The perception varies with the maturity of the market and the exposure to which the consumers have been subjected.With the democratization of luxury in the 1990s (Kapferer & Bastien,2009) which broke out with the conglomeration of luxury initiated by Bernard Arnault, the construct of several luxury houses has changed to more organized corporate firms and their reach has crossed borders. A luxexplosion (Chadha & Husband, 2006) has hit Asia. Asian consumers account for as much as half of the global luxệ industry. Hong Kong boasts more Gucci and Hermes stores than New York or Paris. Chinas luxury market is growing with such gusto that it will single-handedly become the biggest by 2014. Even Indian luxury market which is still in its nascent stage, has 3-month waiting lists for exclusive pieces, while in Tokyo, the epicenter of the cult, 94% of women in their 20s own a Louis Vuitton bag.
India has a rich tradition of luxury. Addressed as the Golden Bird, India has experienced Maharajas and Nawabs who had refined tastes and were connoisseurs of luxury (Kapoor, 2010). Describing luxury as "balance, harmony and beauty of human race," French ambassador to India Jerome Bonnafont told the luxury summit, "because of lavish Indian weddings, media advertisements, maharajas and Bollywood stars, I feel the art of luxury is alive in India (Pandey Omkar, 2008). Jacques Cartier visited India in 1911 in pursuit of fine pearls. He also persuaded a number of Maharajas to reset their jewels using Cartier designs. The necklace,cartier love bracelet white gold forum, created for the erstwhile Maharaja Bhupinder Singh of Patiala by the House of Cartier in 1928 is one of the most expensive pieces of jewellery ever made (Chuganee Bhakti, 2010). Indians still have the concept of luxury connected to their lives; one would not fall short of instances, be it the luxurious Residence Antilla of Mukesh Ambani, or worlds most expensive tie by Satyapaul.
Luxury brands have their presence in the major cities like Delhi, Mumbai and Bangalore. Demographics of several other cities suggest huge potential for luxury retail. Okonkwo (2007) argues that India with a growing population of literates who have a high spending power woos most of the international luxury brands.
For customer-centric retailing of luxury goods in India, the understanding of cross cultural impact on global brands becomes essential which can be achieved through segmentation of markets appropriate to luxury goods. It considers issues such as income, affluence, wealth as well as psychographic approaches of individuals (Seringhaus, 2002). Purchasing habits, being a major part of the overall consumer behavior, are deeply affected by the prevailing cultures of the society in which consumers live (Belwal, 2009). Kotler and Armstrong (2008) state that consumer purchases are influenced strongly by cultural, social, personal, and psychological characteristics which must take into account for successful marketing. Subcultures that can be differentiated by nationalities, regions, religions, social beliefs and languages, and share identical values; play an important role in customer behavior, especially in their preferences for purchase. Likewise, other socio-demographic variables such as family income, age and life cycle stage, education, occupation, are also important (Belwal Rakesh & Shweta, 2009). The growing number of brands and the spurge in retail relates to consumer expectations up to a certain extent-which can be known by studying their behavior.
Luxury goods industry is quite different from regular goods in terms of market characteristics and behavior of consumers. Also the level of acceptance and understanding of luxury in different markets is different. India is in nascent stage of its development as a luxury retail market. Only a few cities like Delhi, Mumbai and Bangalore enjoy the presence of luxury culture thereby making the accessibility and visibility of these products quite low. There has been quite a lot of debate on the potential growth of luxury as a concept in India. While many experts see India as an upcoming market and the next China for luxury, there are others who think that the potential of the Indian market has been overrated and argue that since India is a developing country there is a little scope for conspicuous consumption. Several researches have been conducted on the luxury markets of Asia with special reference to China and Japan. But very less relevant research has been done with focus on the Indian market. The significance of Indian market in the international retail scenario is distinguished. Hence a comprehensive research on the potential of India as a luxury market is highly relevant.
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