While the entire industry is worried about how to recover in the New Year, the high end luxury segment is not really bothered and showing steady growth. According to luxury market players, for people, who can afford to spend on high end goods priced beyond Rs 2-3 lakh, slowdown is a petty issue, not affecting their buying habits. So while, retailers across the nation are struggling to clear inventories with discounts and promotions, luxury retailer are not worried, with consumers selecting their preferred choice of merchandise.
According to the recent CII-AT Kearney report, Indian luxury market was worth over Rs 37,500 crores in 2010 and is growing at 20 per cent every year. Perhaps this is why most luxury brands, noticed heavy purchases by Indians at their stores in Hong Kong, Singapore and Dubai. And they have realised the potential Indian market offers for luxury goods.
Interestingly, the luxury brands already present in India say sales are happening in a particular price segment that begins from Rs 4 lakh and above. And this category belongs to the wealthy clientele. As the CII-AT Kearney report suggests, the luxury market is gaining momentum beyond metros. For instance, Harley-Davidson has found buyers in the Northeast and in towns like Kanpur and Allahabad. Shreyans Group that retails Porsche and Ferrari claimed to have sold 10 Porsches in Kanpur till date. And with rates of luxury goods in India compared to the western world getting increasingly similar, customers are making high purchases in India itself, instead of making a list of things to buy, on their foreign jaunts.
High-end brands are doing lot of activities to keep their clientele engaged and make them come back to purchase more. For instance, some showcase live fashion shows on their social networking page, or personally communicate with their loyal customers about new launches and promotions. Brands such as Brioni, Louis Vuitton, Paul & Shark, Rolex and Tag Heuer offer customised signature perfumes, personalised dials in watches, and name initials on handbags and T-shirts.
So it all boils down to the fact that the luxury is here to stay and luxury companies are trying to catch their customers young, though the youth segment does not constitute a significant percentage of luxury consumption yet. But by hooking these consumers an, these players are looking to reap benefits in the long run. And now the government’s decision to allow 100 per cent FDI in single-brand retail will act as a big boost for foreign luxury brands. Despite challenges like infrastructure, the reach of this sector will definitely move beyond major cities, indicating a bright future.