Maharajas to Masses

25 Mar 2014|puddickm

Added Value has a wealth of luxury expertise across many sectors and countries. So we were thrilled to be asked to write a chapter for “The Luxury Market in India: Maharajas to Masses” book published by Palgrave Macmillan, released 28th September 2012. Here’s an extract from our chapter, written by Melanie Puddick one of our luxury experts.

Fuelled by economic growth, wealthy Indian’s represent a source of enormous potential for global luxury brands. But, as this book amply illustrates, India is a marketplace that poses significant challenges to luxury brands. Indian luxury consumers have distinctive characteristics, informed by regional differences, culture, levels of wealth and experience. Generalisation in any market is a risky business. In India, it can prove fatal to a brand.

There are a few rules of engagement that luxury brands need to understand at the outset about India. Firstly, value-conscious shopping is ingrained into Indian culture. Indians know the price of items in different markets and they will absolutely shop around for the best deal.  The luxury consumer here is no exception.

Culture plays another dimension in the way that the average Indian is used to personal service in their daily life. When it comes to luxury shopping, this demand is therefore even higher; much more than what most Western luxury brands are used to – or often able to – deliver.

Indian luxury consumers do not buy many ‘Western’ luxury products in India itself. Partly, this is due to limited infrastructure. But it is also because they consciously choose not to. For many Indians, luxury is considered to be more luxurious if it is purchased abroad. Buying brands from their native places of origin means more prestige.

Rooted in the Indian culture is an understanding of the value of products that are precious, exotic, rare and hand-crafted. Until very recently brands and their logos in ‘the Western sense’ have not been a part of this appreciation by the Indian luxury consumer.

As a result, our research found that the Indian market has a sizeable percentage of ‘Know’ consumers, who are very established in luxury, but who have never purchased luxury brands per se.  Equally, there are plenty of ‘Show’ consumers who exhibit conspicuous consumption, yet they overtly display their wealth and status by the amount of luxury items they consume, rather than the brands they adopt.*

In addition, Indians are less individualistic than many Western cultures. The outer motivation is often more about demonstrating ‘belonging’ rather than demonstrating ‘uniqueness.’ For example, decision-making about important luxury items may often be shared with family or friends. Take a woman buying jewellery. It is natural in India that she will invite her mother, or perhaps an aunt, to join her because they ‘Know’ jewellery. Group decision making is of particular relevance when purchasing luxury items for a wedding.

Flashy North, Subdued South

Arguably, one of the biggest factors facing luxury brands is how they engage consumers in different regions of India. Spending power in India may be distributed equally across the country’s various geographies, but luxury behaviour differs significantly.

The willingness to indulge in luxury spending is most obviously found in the north of the country. This distinction bears witness to distinct regional differences in how people communicate their status in society. The conspicuous consumption of northern consumers is epitomised in the colloquial expression of “Show Sha”. These individuals are more likely to use lavish possessions, such as jewellery and cars, to demonstrate what they have.

By contrast, their southern counterparts are more understated. Here, a successful person (particularly from the upper classes) may be worth millions of rupees, but that wealth may be deliberately kept under the proverbial radar. Intellectual strength has been historically prized by southerners. This may also explain a greater tendency towards more ‘Know’ and less ‘Show’.

*Research “Attitudes to Luxury” © Added Value and The Partners.

 

LUXURY MARKETThe book ‘Luxury in India’ published by Palgrave Macmillan is available on Amazon

“Successful luxury branding involves understanding how to position your provenance… their team of professional contributors eschew the simplistic one-size-fits-all global branding approaches of yesterday to describe the nuances of customer-centric segmentation necessary to delight the subcontinent’s luxury demanding market.”

— Rohit Deshpande, Sebastian S. Kresge, Professor of Marketing, Harvard Business School

If you need to know how luxury consumers think and feel in new and old markets in the world Melanie and our Prestige Brands team can certainly help, email: m.puddick@added-value.com

 

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