The article discusses the state and scope of luxury retailing in India. Understanding consumer psychology in a diversified market with a huge potential of growth is challenging. Since luxury is still in its introductory stage in India, there is vast scope of research specially in evolving marketing practices in the related field with special reference to a culturally distinguished consumer group.
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, 23,000 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.