Prime Minister Narendra Modi is a truly a visionnaire extraordinaire. Not only did he extend the warmest welcome to the Chinese President Xi Jinping and his beaming wife, he also managed to showcase how modern Amdavad, not one of India’s big metropolises, really is. Just a week later, on the much memed interview with Fareed Zakaria on CNN, Modi relaxed and indicated that our neighbour, China, was nothing special, and much of its progress was only very recent.
If only he had waxed so prophetically to the fashion houses of Europe a little earlier, many of whom have no less that 20 stores in Greater China (Mainland, Hong Kong and Macau), he may have managed to proselytise a few. As an Indian journalist travelling abroad and meeting various CEOs of luxury labels, one cannot help but feel like a poorer country cousin to the behemoth that China has become. Only now, the tide is turning.
China is slowing the fashion industry down. Its demand for luxury goods is on the wane. Many causes can be attributed to this decline — an economic slowdown and the major anti-corruption drive in the government. But most importantly, China’s consumer is maturing. It is moving away from logos and bling, and growing resistant to big spends. The financial results of Louis Vuitton, Gucci and Prada are disappointing and all fingers are pointing eastwards. Even Hermès, that has just opened its flagship store in Shanghai and its 22nd in China, says it needs to slow down here.
The Guardian reports: “There was no shortage of frocks and handbags in Milan last week as representatives of the $1.5 trillion global fashion industry gathered for the Spring 2015 trade shows. Behind the glamour and gloss, however, there was discernible anxiety that the mighty Chinese consumer, responsible for one-third of luxury goods and fashion sales, is not living up to expectation.” It further states that the luxury goods market in China has slowed by 2 per cent after rising as much as 30 per cent in 2011.
Modi, I suspect, would call it as a classic case of easy come, easy go. And he would be absolutely right.
The new Chinese manufacturing-industry consumer is unlike India’s new IT-boom consumer. The new Indian buyer has been far more circumspect and less easy to please. It has demanded high quality and innovation as opposed to following the herd logic. It has argued for better prices. Whether it was a high-end luxury product or a high-street brand like Zara — each one had to correct its figures to make it in India.
Each time some marketing wiz-kid comes up with a case study where India has shown a theory to be true, one can so easily present another case where the opposite theory is also true. India has confounded everybody.
Everybody who came in for sheer business and magical numbers that is. My constant reply to all — Indians studying luxury and foreigners seeking Indian markets — is the same. The Indian consumer is an emotional consumer. He/she will buy only when you win his/her heart and her mind. While others will buy for a status update,
an Indian consumer will buy for love.
So yes, come to India with your stores and factories and investment figures. But take it easy and take your time. Because India is a lady who likes it nice and slow.