The Indian fashion and lifestyle consumption landscape is not triangular in shape, it’s more like a flat disc with a blip on the top. Luxury consumption is still a shimmer in thin air.
Having said that, as wealth creation trickles from top to bottom—the largest numbers of newly minted billionaires are emerging from India as well as the second largest number of unicorns, next only to China—and aspirational consumers rise to the surface, the pyramid will surely start taking shape.
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A shot of confidence
The immediate, and probably transient, factor contributing to luxury sales is revenge shopping. A large number of fully vaccinated people, especially in urban areas, have gained confidence in what they believe to be the post-pandemic period.
They’re out shopping, dining and returning to business-as-usual, and find an emotional release in buying expensive products. Hence the birth of the term “revenge buying". Of course, these revenge shoppers, too, represent consumers who will become repeat buyers—after all, luxury is all about the experience, and once the experience has been savoured, it’s hard to give up.
India’s luxury market has also expanded in the past year due to the well-heeled and habitual international traveller and shopper being “trapped" inside the country. These customers, who, in the past, took pride in shopping for luxury internationally, have now discovered the convenience, the freshness and the width of merchandise assortment within their own country.
They have discovered that the pricing is comparable. And most importantly, they have discovered the personalized, welcoming and warm service—which is just not available in the western shopping arena, no matter how much you pay—of the Indian luxury shopping theatre.
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Having experienced all this and more firsthand, these first timers have not only become converts but are also now ambassadors of the joys of shopping in India.
EMOTIONAL EXPRESSION
The pandemic has also made consumers acutely aware of their mortality. It’s led to a clear trading up to shopping for timeless luxury products, very often a surrogate for their emotional expression for their loved ones. Never ones to express ourselves well in words, we’re now giving gifts that have ageless appeal to tell our loved ones what they mean to us.
Luxury gifting has also found a space in weddings. Weddings have always been a big part of the societal narrative—we are either attending a multitude of weddings, talking about the ones that we just attended, or planning the next set of weddings in the family.
Weddings offer a unique occasion to demonstrate and reaffirm the family’s standing in the social hierarchy. And the big fat Indian wedding is back with a bang after a hiatus in 2020.
‘Let’s grab this window before the next wave of covid-19 restrictions hits’ is the emotional theme of the moment. Indian designers are finding it difficult to cope with the avalanche of business. Shelves are empty and order books closed by most of the sought-after designer names.
There is another aspect to the demand for and demonstration of luxury at weddings right now. Wedding budgets are planned and frozen years in advance, and they’re usually massive as they’ve been accumulated over decades.
Given the restrictions on the number of guests and size of the event, the ban on travel for global destination weddings, and fear of contracting the virus, all those spends set aside for weddings are finding their ways into luxury gifting.
Time and again it’s been proven that in India, supply creates demand. The significant increase in the availability and accessibility of luxury products has set in motion a virtuous upward trend of consumption.
GUSH OF LIQUIDITY
Young professionals, benefitting from the changes to the economy, are also diverting their cash into luxury. In the past year, there has been an unparalleled appreciation across asset classes, a boom across most business and industry verticals, and the era of the Great Resignation, where a talent crunch has led to a massive rise in talent rewards.
All this easy gush of liquidity is finding its way to conspicuous consumption.
In the past, finding rich and aspirational consumers in India was akin to looking for the proverbial needle in a haystack. The arrival of internet commerce and its rapid spread has made these geographical challenges vanish.
It’s ecommerce that has helped fuel this consumption rally, creating an outreach to consumers who were hitherto beyond our physical reach and thus sporadic in their purchases, limiting their shopping for luxury only to their domestic and international travels.
All good things
Even innovative channels of sale such as distance selling are gaining permanent roots now. These are the many factors creating a habit of buying all things expensive and good.
And then there is the maturing of the first wave of brand and logo victims. It’s been more than a decade since the first luxury mall opened in the country, and those early buyers have transformed into consumers who are not only confident of their own persona but also deeply aware of and attracted to the craft and heritage of true luxury.
All of this has led to the birth of a new strata of consumers who view unique and timeless luxury as an expression of their own individuality.
At the end of 2021, I’d say the Indian luxury narrative is strong. Its roots are firm, growth is steady—we have 10 million ready and habitual consumers of luxury with another 25 million flirting and increasingly getting attached and addicted. Though small in percentage terms, these are significant as absolute numbers. They’re significant enough to make India the new but growing centre of the global luxury stage.
Darshan Mehta is MD, Reliance Brands Limited. He is a chartered accountant who has led an advertising agency and a stock broking firm before setting up India’s largest luxury fashion retail company. An avid trekker, he finds time at least once a year to explore the Himalayas, and loves contemporary art.
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