Luxury is not new to India, despite the country’s image as a ‘poor’ nation. A peek into history tells us that Indian royalty has played in the lap of luxurious products and experiences from time immemorial.

Diamonds were first mined in India more than 3,000 years ago. The last Nizam of Hyderabad is fifth on Forbes’ list of ‘all-time wealthiest’. The Taj Mahal, a luxurious expression of love, stands testimony to the need of royals for opulence and extravagance. The clear divide between different strata of society through the ages served to amplify the longing for anything premium and luxurious in the hearts and minds of the ‘have-nots’ while the ‘haves’ felt that luxury is their birthright and a reflection of just ‘who’ they are.

India has witnessed an intense transformation in urban pockets with globalisation, modernisation and an increase in living standards. There is a strong competitive culture with a focus on achievement. Emphasis on education in the years gone by has created a section of society that has succeeded in the corporate sector and, hence, considerably bridged the distance from the old-money upper-class. A rise in entrepreneurial spirit has put new money into the hands of some social segments, some unlikely. Youngsters with rising salaries and minimal expenses (since they largely stay with their families) are also looking for avenues to spend.

All of this, coupled with the increasing ‘I’ focus of today’s Indian, has opened up the luxury and premium products market to a larger Indian audience, in metros and smaller towns, too. Any opportunity to showcase one’s ability to spend, erase social boundaries and feel ‘at par’ with the ‘haves’ is seized by the New Indian. In fact, the confidence that has accompanied India’s economic growth has led to a feeling of entitlement among the Indians of today, a licence to experience similar luxuries as those in the West or in other successful Asian countries such as China and Japan, hitherto the preserve of only a few. All in all, luxury has a strong identity-defining role in an India which has always had a clearly defined social hierarchy.

However, the traditional Indian restraint makes the new-rich, especially the middle-aged, a little hesitant to spend on indulgences. A middle-class upbringing coupled with constant reminders of the extensive poverty in the nation, ensures that considerable thought is put into luxury purchases. A well-known luxury brand is not enough; different offers are compared to ensure the best ‘deal’ is obtained. True value is sought along with a superlative product, and premium purchases are rarely made on a whim.

A consequence of this more pragmatic approach to luxury is that it is easier to loosen the purse strings for buys such as jewellery, watches and luxury homes, items whose value could appreciate over time. The collectivism of Indian society also raises its head in this sphere; extravagances for the family, such as luxurious vacations or a designer handbag for the wife are simpler to justify. (To make up for hours spent away at work?)

The Big Fat Indian Wedding The proverbial Great Indian Wedding provides a legitimate outlet for indulging in extravaganza. It is a plausible excuse to succumb to indulgence and luxury as family honour and a child’s happiness are at stake. It is the most important event in a man’s life that puts to test his ability to care for his family – a key facet of his ‘success’ as an individual in Indian society. Families pull out all stops to put up a ‘show’ as grand as none other in order to save (or promote) their ‘face’. The elaborate functions spread over several days create a host of occasions for families to give in to the ‘premiumisation bug’. The practice of dowry, though illegal, creates further opportunities for luxury and premium products to enter. Loans are taken to ensure there are no half measures when it comes to a daughter’s wedding.

From designer trousseau to elaborate invitation cards to grandiose venues to flowers flown in from Europe to entertainment by celebrities to event managers, the Great Indian Wedding sees it all. A new television channel focused on weddings alone stands testimony to the sway that a marriage holds over a typical Indian family.

Clearly, as long as they are cloaked in the right garb (in this case, family honour and love for the family), luxury expenses enter the Indian’s life with ease.

Luxury extends to service too The last few years have seen an evolution in luxury. True luxury is now much more than just the product being owned and used. It is also about receiving exceptional service.

Consumers are laying more and more emphasis on experiencing luxury at each step of the purchase process. The service experience is seen as a factor separating the wheat from the chaff. The newer luxury consumer finds it challenging to discern ‘real’ luxury with an increasing premiumisation of products/ services and a plethora of international mid-premium brands available. The sales staff takes on the role of consultants and advisors, keeping in mind clients’ needs and preferences from prior interactions as well. Clients are ushered into inner, more private sections of a store to emphasise their importance; beverage requests from previous visits are referred to and confirmed; presenting options in a customer’s home, rather than at a retail outlet, is gaining prominence; post-sale interactions to confirm satisfaction with the purchase and experience and to build a relationship with the consumer are increasingly becoming the norm.

Romance and mystique It’s not enough to just focus on a luxury brand name and quality product. Consumers are looking for a romantic story of a super-premium product in order to truly ‘feel’ like they’ve indulged. There is a thirst to know the ‘roots’ of the product being purchased, its provenance – Who designed it? What inspired it? How was it made? What was it made of? Where were the raw materials sourced from? Such a ‘story’ serves two purposes – first, it creates some mystique around a product which differentiates it from the slew of other options available. More importantly, it tells a tale about its authenticity.

Authenticity is gaining importance for the Indian consumer. With stories of scams, swindles and corruption abounding, the pragmatic, value-conscious buyer lays a premium on authenticity as it assures him he is getting what he is paying for. Being convinced about the genuineness and legitimacy of a product makes it much easier for him to overcome his restraints and just take the plunge.

On the other hand, authenticity is also gaining traction with a small section of the more evolved luxury shopper who believes he is above the pomp and pageantry of super-premium brands. This, in a way, is a sort of reverse snobbery where the ‘show’ of known luxury brands is discarded in favour of ‘true worth’. As a result, he seeks to carve a distinct identity for himself – a person who has (rare) knowledge about the product in question, who is unfazed by the splendour of brands that mesmerise others, who stands head and shoulders above the rest.

Some of those who have been habituated to such products and experiences for years are now demanding personalised luxury, differentiating themselves clearly from the rest. There is no guilt associated with the excessive outflow of money to meet one’s individual tastes. They live in the moment, indulging their aspirations, without any thought for future value. Instances of macaroons being flown in from Europe, single-piece outfits created by top designers, flights being chartered for an ‘up in the air’ party, penthouses constructed to individual tastes, customised holidays covering deep sea diving, a journey on the Palace on Wheels, staying overnight in old forts and palaces … In fact, there is a group of consumers which consciously looks for products tailored to their Indian sensibilities. Increasing confidence in one’s tastes and preferences and pride in one’s heritage has reduced the need to ape others and the West.

While personalised luxury may be niche at the moment, it is a trend that is here to stay. Addressing the needs of this small but high value set could reap dividends for marketers of luxury products.

The interest in India’s luxury market arises from two spheres – the immense growth of China’s luxury market and India’s historical association with luxury through royalty. However, the path forward in India is different from China which does not have established social hierarchies and a heritage of luxury. India is different in this way and should be looked at with fresh eyes to fully reap its benefits.

Shivani Dayal Kapoor is Executive Director – India, Ipsos Marketing

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