Opinion Mister,can you spare a Dior?
International luxury brands in India should open outlet malls to kickstart sales and ride out the slowdown.
International luxury brands in India should open outlet malls to kickstart sales and ride out the slowdown.
In unstable times,the ephemeral value of a $1,000 handbag is hard to evaluate,yet repeated consumer studies suggest that people used to maintaining a luxury aesthetic will continue to do so; even if they need to tweak that aesthetic to fewer purchases at lower price points. If luxury brands newly opened in India want to lure in the customers,theyd do well to connect with the psyche of the wealthy Indian,for whom the idea of foreign trips and shopping are deeply entrenched,as is a judicious approach to non-essentials during uncertainty.
The size of the luxury market in India,evaluated by Technopak and the World Wealth Report is estimated to be over 500 million dollars,in emerging economies,second only to China. Indians have always enjoyed the idea of splurging on expensive brands; Cartier watches and Mont Blanc pens have completed over a decade in India. However,this segment has really only taken off after Indias first mall dedicated to high-end brands,Emporio,opened in Delhi last year with Dior,Cavalli,and Armani entering the market in partnership with Indian firms. Bad timing or bad luck,terror attacks and a fledging economy turned the mood of the shopper from flashy and optimistic to overtly cautious overnight,and the Emporio has looked spookily desolate ever since. Most Indian firms have no experience in the luxury segment and the deals worked out with the brands are heavily loaded against them. Theyre stuck with huge inventories and are buckling under high rents and fixed costs. Etam,the French lingerie brand has pulled out of its partnership with the Future Group within a year,while Gas,which entered the market in a deal with Raymonds,has also fallen through.
All fashion capitals of the world,whether its New York,London or Paris have outlet malls,for people addicted to luxury brands who cant always afford to shop in chic designer boutiques. In India,promoters of luxury are still figuring out a solution for old merchandise,and so far there are no options for getting rid of last seasons wares. For example,in Rome,its not just the Spanish Steps and the Colosseum that attracts the tourists. Fashionistas flock to a Prada outlet mall situated half-an-hour outside the city. The deals can be spectacularly unbelievable; a Prada leather bag,marked down by 80 per cent for a 100 dollars or a pair of stilettos for 200 dollars. Even though the goods arent cheap by any standard,they are a steal compared to their equivalent shops located in prime real estate in the heart of the city. You could stumble on last seasons Diors,Ralph Laurens and Salvatore Ferragamos,while strolling around in a quaint,medieval village. Luxury retailers have grossly overestimated the size of this market in India and gloomy predictions from insiders suggest that its going to be a long time before a customer sees the value of a 2 lakh rupee ball gown by Dior. But in the meantime,who says no to a bargain?
leher.kala@expressindia.com
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