Five ways how Luxury Goods and Services companies are charting new course to woo the super-rich in India

Some learnings from the strategies being adopted by the luxury brands in making their place in the fastest growing luxury market

There was a time when India was passed on by a number of luxury brands as “not yet ready” when compared to the other emerging markets.Well, things have been changing over last few years and how! India is now the fastest-growing emerging market for luxury goods & services; reporting more than 30% annual growth since 2012. The country’s wealthiest continue to spend unabated on luxury products such as apparel, accessories, home decor, pens, watches, wines and spirits, and jewelry; and services such as fine dining, concierge services, travel, hotels and spas. With increasing purchasing power and widening middle class, the target segment of these products and services largely constitutes but is not limited to the urbane-well-travelled-segment in metros or tier-1 anymore. Nearly half of the country’s ultra-wealthy reside in tier-2 and tier-3 cities. Here we share a round-up of some of the interesting strategies that the luxury product companies are putting to use to capture market in tier-2 and 3 cities:

#1 Establishing long term consumer connect and ‘educating’ the consumer

Smaller cities and towns typically have huge numbers of potential first-time luxury consumers. A key aspect to convert this segment into buyers and loyalist is educating and creating awareness. Companies like BMW organize brand connect programmes for students in these areas with an aim to motivate them to become a customer at a later stage.

#2 Employing innovative channels to reach the target customer

Different companies use different means to reach their target segment in the smaller towns and cities. On one hand where Judith Leiber uses local influence groups to cosy up to buyers by organizing trunk shows, the team of Ermenegildo Zegna, the Italian luxury menswear brand visits homes of brand loyalists in cities such as Ahmedabad, Pune, Ludhiana, Chandigarh and Jaipur, besides metros like Chennai, Kolkata and Bangalore, as a part of its 'Made-to-Measure' program.

#3: Indianization is the key

With the intent to include local elements to their products – brands have taken to tying up with Indian designers, promoting in local languages and tweaking offerings to suit Indian festivities, weddings and celebrations. Additionally many companies are localizing their products to capitalise on aspects such as traditional craftsmanship, unique aesthetics or heritage. Players like Moet Hennessy, luxury champagne brand, who previously offered only imported products, launched Indian-made wines and companies like Baron Aviation offering Indian cuisines to the clients availing charter flights are signs of this trend.

#4 Experimenting with new channels

Over last few years, many companies such as Corneliani, Villeroy & Boch, Versace and Guess have changed partners or chosen to exit a partnership in favour of opening own stores or establishing a wholly-owned subsidiary . Many companies have chosen to move out of the luxury hotels and malls and creating high streets to attract customers. For instance, Hermes was among the first brands to move beyond luxury malls and hotels to Mumbai’s Horniman Circle, creating a high street in India and the trend has been picking up.

# 5 Targeting the value conscious to convert them into loyalists

With a large part of the target segment now comprising high earning professionals and first-time-buyers as opposed to the inherent rich - brands are pushed to focus on strong performance, cost and after-sales service. Increasingly brands are indulging in end-of-season-sales and easy finance options (sply. for luxury cars)