May 29, 2009 11:09:52 pm
We may be living in unstable times,but making a statement in finery is still a priority for Indias remaining urban rich. So despite a troubled economy and a fledging stock market Louis Vuitton established an 11 per cent growth worldwide in the last quarter,largely thanks to the emerging markets of China and India. This could be because in the giddy fashion scene here,people are just beginning to get acquainted with the world of luxury. Or,in their decade in India,Louis Vuitton has created a strong following; their signature bags are well entrenched as must-haves,flaunted by society ladies in South Delhi and South Mumbai.
However,considering our flashy aesthetic and elevated state of brand consciousness,and the fact that some luxury players are growing despite gloomy economic conditions,what explains the dismal straits other international luxury players find themselves in? Analysts generally agree that the luxury market in India will always exist,largely because high-end consumers are wealthy enough not to be affected by market conditions. Besides,Indians traditionally enjoy splurging on luxury (were among the highest buyers of gold and diamonds in the world). But already,internationally respected brands like Kenzo and Canali who entered India barely a year ago with Emporio,the countrys first mall dedicated to luxury retail,are selling stock at 80 per cent off. At a sale held over two days at a five star hotel in Delhi recently,garments by Just Cavalli,Aigner and Paul Smith were heaped up in piles,reminiscent of a Big Bazaar store. A later clearance sale at Aigner at Emporio declared goods at 90 per cent off. However,the sale model in this case didnt seem to work half as well as a full priced Louis Vuitton that,incidently,has never gone on sale. That could be because in tighter times,a luxury consumer is also probably on a budget,and would prefer not to waste money on subtlety,or lesser known brands with poor recall. His money is better spent zeroing in on the sure shot brand that provides the best value as a status symbol.
Theres no doubt that Indian franchisees who tied up with brands like Kenzo and Canali grossly overestimated the size of the luxury market in India,spurred on by Louis Vuittons success. The deals worked out with the brands are heavily loaded against them. So theyre stuck with high rentals,and huge inventories and the sinking realisation that Indians may have become cool enough to splurge on a bag,but try selling them a Lanvin gown for Rs 3 lakh: the market for apparel in this price segment simply isnt there. Jewellery purchases,on the other hand,are less susceptible to market forces,considering lavish Indian weddings. So,are we ready for Spicy,a dazzling,bejewelled,new shoe by Louis Vuitton priced at over 3,000 pounds,worn by the likes of Madonna and Victoria Beckham? Its unlikely,since the social returns on a mere shoe,are debatable.
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