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Jacket @ Rs 1.7 lakh; shoes @ 40K!
Kishore Singh |
April 30, 2005
Chanel's launch in India last month was a low-profile event, but word of mouth is out that the store stocks an international selection of perfumes (Rs 3,300 for a 100 ml phial of Chance), watches (Rs 10.5 lakh for its diamond-studded Camelia) and apparel (Rs 1.7 lakh for a jacket) at The Imperial, Delhi.
By contrast, Bang & Olufsen pulled out all stops at its launch a fortnight ago, and has already received 600 "serious" enquiries for its audio systems (starting price: Rs 3 lakh); it had sold systems worth Rs 75 lakh in just a few days from its stores in Delhi and Mumbai.
And Audi announced its arrival with a price tag that seemed, by many luxury car standards, "affordable" at Rs 40 lakh.
The second coming of the luxury brands in the market is also seeing renewed activity among the first wave that arrived a few years earlier.
Louis Vuitton (belts Rs 18,000, women's shoes starting Rs 25,000, travelling bags Rs 1 lakh) followed up its New Delhi outlet at The Oberoi with another at Mumbai's Taj Mahal Hotel, and is now set to mark its arrival in Bangalore as a precursor to having, according to promoter Tikka Shatrujit Singh, "six or seven stores in the next two years".
Nina Ricci launched its new perfume, Love in Paris, at the same time as it was introduced in Europe. Hugo Boss (formal suits Rs 75,000) has a store each in the Oberoi hotels in Delhi and Mumbai, and will soon have another in Mumbai's Grand and one in Bangalore.
And that's just the tip of the iceberg. Thomas Kastgen, CEO for Aston Martin in the Middle East, has been in India scouting for partners for three models it hopes to launch here within the year, starting with the Vantage 8 priced at Rs 1 crore before introducing India to its high-end DB9 and Vanquish.
And the World Luxury Council, the international arm of the British Luxury Council, has been busy with appropriate brands that should mark their presence in India.
These include Edmiston, Sunseeker London and Cavendish White for yachts and speedboats; Theo Fennel, Boodle & Dunthorne and Garrods & Asprey for jewellery; Swiss private bankers Dryden Financial; Netsjets to provide high-flying Indians with private jets; luxury liquor merchants Berry Bros & Rudd, Uluvka Vodka and Diageo Reserve; shirtmakers Thomas Pink; and realtors The Knightsbridge.
"India is home to some 61,000 millionaires," says Devyani Raman, director for business development in India for the World Luxury Council.
"This is a 22 per cent increase from 50,000 high net worth individuals (HNWIs) in 2002. India recorded one of the biggest jumps in 2003 in terms of HNWIs percentage growth. However, according to official sources, the number of tax assesses in the over 1 million slab in 2002-03 was 71,000. This figure, which does not take into account others not covered by the tax net, could soon exceed 1,00,000."
What she and others are saying is that India now has the propensity to spend. "Omega Constellation watches (Rs 70,000) probably sell in lakhs," says Shaifalika Panda, a partner in luxury furniture store Renaissance Homes (a Baker dining table for 10, Rs 4 lakh), "and the luxury brands are obviously trying to move in so that the same spenders will graduate to higher levels in the coming years."
High spends have not been unknown in India, not even in the fashion industry (Rs 1 lakh for a J J Valaya wedding dress), contemporary art (Rs 92 lakh for a V S Gaitonde at a recent Saffronart auction), or real estate (Rs 2.5 crore for a villa at Jaypee Greens, Greater Noida), but it is the excitement in the retail trade that is causing more than just a frisson in the market.
Are there buyers for these luxury brands? Are they making money in India?
Almost everyone is tight-lipped about sales, targets and profits/losses. And not surprisingly. While rumour has it that there is a waiting line at Louis Vuitton for bags, the store has few shoppers at any time.
"This is not a vegetable shop where you will see customers all the time," reprimands Shatrujit Singh, whose future plans remain ambitious with regard to expansion.
"We've grown by 35 per cent on a year-on-year basis," he says. His clients? "They would like to maintain their privacy."
At another luxury store, customers walk in with bags of money to buy a piece of jewellery or a scarf. "Cheques are rare," shares the store's manager, strictly "off the record".
But whatever the nature of the business, it's clear that there is a huge market for "writing instruments" (pens to you and me), watches and the like.
Watch stores, at any rate, are often crowded with brands seen only in fashion magazines a few years ago. Now, the Swiss industry is keeping a sharp eye on the Indian market: this, it acknowledges, is the future market for the world, including its most luxurious brands.
"Luxury," confirms Shaifalika Panda, "is a perception, a certain distinct style that fulfills a requirement you think you have." And not immodest about what she'd like to acquire at some stage -- "a Breguet watch, a Ferrari" -- she says: "One likes the good things of life."
But she says that brands that have underestimated the Indian market's propensity to define and consume luxury have paid the price.
"The old model of the Mercedes didn't work," she points out, "till they brought in the latest cars from their stable. You have to give the Indian market what's in fashion abroad, what's the best."
Bang & Olufsen is finding that out, much to its delight. "We've had calls from Kolkata and Bangalore regarding opening stores there," and certainly sees the possibility of "five to six stores across India by the middle of 2006, each doing an annual business of § 2-3 million," says Prakash Ramsingh, managing director, B&O India.
And at the Bvlgari store, its manager confirms there has been "a good growth in jewellery with women losing their fixation for traditional gold and diamond jewellery".
Eventually, though, what is it that makes a luxury brand work? After all, wealth cannot be the only criterion. "Luxury is anything we believe is luxury," says Devyani Raman.
"By itself, it's something that is unique, not easily accessible by everyone, and creates desire." Tikka Shatrujit Singh believes that, ultimately, customers pay "for heritage value, workmanship, quality and innovative design".
But perceptions differ. Shantanu Basu, promoter of railway signalling and automation company Eldyne, has a collaboration with German company Alcatel.
"Since Alcatel and Hugo Boss are both German companies, I feel my collaborator will be happy that I am wearing a Hugo Boss suit and promoting a German company," he says.
The main problem, as has been pointed out by Dr Bruno Salzer, chairman and CEO of Hugo Boss on a visit some time ago, is the lack of availability of luxury retail spaces.
What about the burgeoning malls? "We cannot be there," Dr Salzer had exclaimed, and hotels -- the only other logical space for such high-end branded goods -- have currently little space to offer.
Typically, though, such stores need a minimum floor area to display their goods, and till the retail market matures, it's doing more to hold back the growth of luxury branded goods in the market than the question of whether there is a market yet in India or not.
In the case of automobiles, the market seems to consist of cars in the range of Rs 70 crore (in limited numbers, naturally) and Porsche, with just two dealerships, has some 20-odd cars already on the road, while the Rs 2-crore Bentley market has seen half that number being sold so far.
The stupendously priced Maybach (Rs 5 crore) has suffered an image setback because of the three cars sold in India so far, two have gone to Gutka barons who have been exposed in a scam, and the third belongs to Anil Ambani who is entangled in ownership hassles with his brother for Reliance Industries.
But putting such controversies behind it, the World Luxury Council would like to see the "best of breed" British companies, for instance, make headway into India.
Therefore, Mont Blanc may soon have competition from Conway Stewart fountain and ballpoint pens, Henredon and Donghia from Adrian Alan period furniture, the various polo clubs and associations in India from the Royal County of Berkshire Polo Club, while Steinway (pianos), the Hanina Gallery of Fine Arts (a member of the Society of London Art Dealers) and The Silver Fund (vintage holloware and jewellery) should soon mark their presence in the country.
Once, Indians travelled overseas to shop for luxury goods. But now that these are becoming available at their own doorstep, it's time that their holidays turned into a luxury experience instead.
And Abercrombie & Kent's Vikram Madhok points out that his "original luxury travel company" with "insider access" has ideal solutions for the Indian traveller who isn't scrimping on dollars for exotic destinations and superior management of holiday arrangements.
Fancy a villa in Tuscany, complete with maid service, great meals and a "personalised" holiday far from the madding crowds? For $1,000 per person per night, you can have it all.
Don't forget your Prada shoes (Rs 40,000) and Gucci sunglasses (Rs 30,000) though -- you wouldn't want to look out of place now, would you?
Q&A: "There is potential"
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