The Indian Complication - Part I

We all hear things like India is one of the biggest upcoming markets for luxury brands... and most people, when they say luxury brands; they’re referring to luxury fashion (apparel and accessories) brands. The growth of LV, Prada, Armani and Gucci in China and other Asian markets, has the whole industry optimistic about India too. And with the economic crisis in USA and Europe, the industry is betting a lot more, more than ever, on these two largest growing economies – India and China!

However, India, unlike the USA, has a vast ocean of history and legacy, right from the Vedas and other mythological texts. It is one of the oldest surviving cultures of the world. Hence, most of our habits, mannerisms and beliefs stem from hundreds of thousands of years ago. Obviously they have all gone though several modifications, but the roots still remain intact. Which is why, unlike the USA, which is young, and has borrowed most of its culture from Europe, India, is one of those cultures, which finds it most difficult to borrow from others. Even though religious practitioners talk about westernization and growing influence of western cultures in India, India is one of those unique nations that Indianizes all those western concepts as they enter in. The resistance to foreign concepts is very high at a subconscious level.

One of the biggest barriers that Luxury brands will face in India is to overcome the Indian mindset of ‘saving’ v/s ‘spending’. Though we’ve seen a change in this over the past few years, the current economic crisis has thrown us back into the past in terms of these values. Modern day Indians are suddenly realizing the worth of what their parents always told them, and are going back to saving.

Now I’m not saying that Luxury is a western concept that will find resistance in India. No! In fact luxury is very much an Indian concept, culturally since the age of Gods, and kings and princes. India has been used to opulence and show off forever, and hence, to consume luxury, is in our DNA. However, what kind of luxury is also in our genes.

Opulence in India is mainly displayed through jewellery and property much before clothes and bags. The Indian weddings are the biggest occasion for Luxury consumption in India – more like a platform used to show off how rich you are. Even here, jewellery is what we most spend on! (However, why branded jewellery has not been successful in India is another discussion, which I shall touch upon in my next article)

Rich Indians don’t mind buying diamonds for lakhs, but would definitely think twice before buying a dress for a lakh.

In terms of hierarchical show-off values, the house and jewellery would come first, then a car, then gadgets, then clothes, and then bags, shoes and other accessories. Hmmmn... This takes us back to the Indian mindset of ‘saving’ v/s ‘spending’. Because if we look here, there is only one kind of luxury that Indians most indulge in, and most value – Luxury with an ‘investment value’.

So then what will happen of all these European luxury brands of designer clothes and accessories, hoping to make a fortune in India? They have to do something to overcome this Indian mindset, and as seen in the current figures, simply being present in India is not really helping too much.

Perhaps, to overcome the ‘saving’ mindset of the Indian, luxury brands need to portray themselves as an ‘investment’ rather than an ‘expense’.

Why can’t branded designer wear dress or a bag have an investment value? Why can’t they have a resale value?

Now, ‘resale’ has another complication in India. The concept of ‘Vintage’, unlike the way it is looked at in Europe, is considered as ‘second-hand’ items, by Indians. The concept of used clothes or rented outfits, is traditionally, seen as derogatory in India. Hence, the brands have to handle it carefully, from their own end. For example, the ‘resale’ value could be in the form of brands willing to buy back the products after 30-35yrs or in the form of auctions, organised by the brands themselves, which would give it the feel of ‘true vintage’ and not ‘second-hand’.

Are there other ways that European designer wear brands can overcome this mindset of ‘saving’ v/s ‘spending’? Post your views...