L is for Luxe

In economics, luxury is defined as something whose demand increases as one’s income increases. This also means when there is a drop in income, the demand for luxury will drop too. Luxury goods are those that are superior in quality, design or durability.
Today, every item of manufacture has become a luxury good: right from a handbag to a hairbrush. Homes, hotels, holiday packages and bottled water often pre-fix ‘luxury’ to its tag-line. Simply because they are more expensive than regular variants, they are deemed as luxury and sold at premium prices. And so, in socioeconomics, luxury goods are status symbols today.

All brands — designer brands — call themselves luxury items these days. This is simply because their names are associated with expensive goods, albeit their manufacturing bases may be China or Vietnam. Luxury then is also just a signature, nothing more thana name.

And then there is ‘mass luxury’. These are items made for mass consumption, for high street retail, but cannot be called so as they may dilute the label’s snobbish image. They are often priced in between very expensive and accessible.

Amrita Banta, a managing director of a research firm, offers her analyses on the site luxurysociety.com. The survey states that women consumers match high prices with high quality. ‘For affluent Asian females, the idea of luxury goes far beyond that of a price tag; it has strong emotional associations with quality of life, social status and ultimately happiness’. For these women, affluence and luxury are outwardly represented by branded items, and designer handbags are seen as the epitome of luxury and class.

Branded items are so popular in Asia simply because they’ve only just become available. European labels have been owned and made in Europe, but with the new shift in manufacturing and money bases, their going eastwards is largely ignored. As long as
the name, or logo, comes from Europe.

Naturally, labels have scurried into India, China, Hong Kong and Dubai to make the most of this trend. Many are ill-planned ventures, relying more on hype than awareness, and are coming out bruised. Many big players are being forced to reassess their game plans to please the consumer’s evolving tastes, and many senior executive positions are given to those who have worked in Asia. (Coach’s Victor Luis was president of Coach Asia, Givenchy’s Sebastian Suhl previously headed Prada Asia and Louis Vuitton’s new global exec VP Christopher Zanardi-Landi worked in China.)

The ‘handmade’ schlep didn’t work for designer goods in countries like India where Kolhapuri chappals are made by hand but not considered luxury goods. Khadi or hand-spun fabric is only discussed around Independence Day or Gandhi’s birthday. Organic and chemical-free didn’t hold much water either since the best perfumes — a major market mover — are made with expensive chemicals called aldehydes.

The foundation of luxury lies in its exclusivity, but then how does one open 30 stores in two years per Asian country? Luxury is ideally that which is rare — not everywhere. For example, in India, live-in domestic helps are becoming a luxury. But no one will call household help a luxury outside of tony Park Avenue-style homes in the USA.

European labels and their marketing managers are struggling to define luxury. Insofar, they are only settling for that which is super pricey. This is a trend the rest of the world is also cashing in.

Meanwhile, I’m deleting Luxury-anything from my Twitter profile.

namratanow@gmail.com