Luxury in India

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Luxury in India

Painting a Picture
“Luxury is the necessity which
begins when real necessity ends”
- Coco Chanel
#1 Demographically
understanding the luxury
market in India

#2 Decoding the meaning of


luxury

#3 Understanding how luxury in


consumed in India

#4  Examining global luxury


brand

#5 Examining luxury brands here


in India

#6 Luxury imperatives for (client


name)

Sources:
The International Herald Tribune Luxury Brand Conference, New Delhi (25th-26th March, ‘09)
Qualitative Consumer Research (Quantum Market Research, April ‘09),
Qualitative expert interviews (Quantum Market Research & Rediffusion Y&R, April ‘09)
Desk research
Secondary data mining
A Brief Demographic Introduction
Understanding the Potential
Some Voices
‘You will be surprised to know that we have no market study, no set
market size for our brands in India. We don’t have a precise plan, we
just play it by ear’
-Mohan Murjani, Chairman- Murjani Group (Local Partners of Tommy
Hilfiger, Gucci, Calvin Klein & Jimmy Choo)

‘The affluent Indian consumer is for all intents & purposes a blind
spot. There is no one agreed on figure for how many of them they are
or where they live. The reasons for this are various- chief among
which are we are yet to all agree on who this consumer is. From a
marketing point if view, segmenting them purely basis income is
meaningless. ’
-Vinay Dixit, China Country Head- McKinsey & Co

‘There are no real numbers readily available with regard to the luxury
consumer in India. Reason being that our marketing plans are still
retail rather than consumer focused. We have no interest in knowing
how many super rich consumers there are in India when we have only
3 stores in the country.’
-Shantanu Mukherji, India Country Head- Ermenigildo Zegna

As can be seen, there is currently a severe dearth of valid information


about the ‘real’ size of the luxury market in India
No Clear Consensus

In 2006, there were 1.6 million households in India earning $100,000 a year and spending $9,000 annually
on luxury products

Both these figures are expected to grow at approximately 14% a year making the current number of
$100,000 household around 2.07 million

India has about 123,000 high net individuals, or millionaires in US dollar terms

The category of super wealthy is growing faster in India than anywhere else in the world, with a 22.6 %
increase in millionaires from 2006-2007

India has about 464,800 families with an annual disposable income of $75,000 or more, which translates
into less than 0.1 % of the country’s overall population
No Clear Consensus

Estimates that India’s luxury market will grow by 25% between 2009 and 2014

There are around 1.5 million households in India that can afford luxury goods (defined as ‘Globals’, i.e.
households earning $20,000 and above)

Currently, there seems to be no consensus regarding the definition of the luxury consumer in
India, with benchmarks for the same ranging from $20,000 to $75,000 to $100,000 to even
$10,00,000 AHI

This is compounded by a strong cash component based , ‘black money’ economy, ensuring
that incomes are largely under-reported

However, despite the relatively small size of the super affluent consumer vis-à-vis the overall
population, one thing that all sources agree on is that this segment is growing rapidly and
exponentially
The Big Picture
Annual Household Income : Rs. Lac Total HH: Million
2008/09 2009 2012 2015

Super Rich >136 0.14 0.28 0.54


High
Sheer Rich >68 0.25 0.48 0.82
Income
Clear Rich >27 1.04

Near Rich >14 2.37

Strivers >7 6.17


Mass
Seekers >3 22.2

Aspirers >1.2 75.3

Poor Deprived < 1.2 114.4

Source : NCAER MISH 2004.


Projections source: LG Electronics India
Where do they live?
95% of the Sheer/Super Rich are concentrated
Regional Contribution % (Urban/Rural) in 21 cities
Delhi & Mumbai alone comprise 62%

N : 40% (83/17) 28% Che 4%


Mum

Pun 6% Hyd 2%

Nag 3% Bang 1%

Ahm 2% Coi 1%
W : 43% (94/6) E : 4% (92/08) 1% Koc 0.4%
Sur
Nasik 1% Del 34%
Aur 0.6% Lud 2%
Raj 0.5% Chd 1%
Vado 0.5% Amr 1%
S : 8% (85/15) Fbd 1%
Kol 4%
Jal 1%

Source : Technopak India Luxury Trends 2006, NCAER MISH 2004, Y&R Analysis
What do they spend on?
Total Size of the Luxury Market in 2010 = $14350 mn

Others 24
1220
(8%) Home
Products
decor
49
Personal
care
73

Wine &
spirits
183
Services 3240

Electronics 232

2008
9890 Apparel/
Accessory 280
Assets
• Luxury defined as goods with very high price premium
compared to the average for the category
Watches/ • The Product Market size represent goods bought in the
Jewelry 378 Indian market only

Source: AT Kearney India Luxury Review 2007


What is driving the luxury market in India?

Source: AT Kearney India Luxury Review 2007


The Meaning of Luxury
Its roots and its future
A few definitions of luxury…
‘Something that simply makes me feel good- its what I deserve’
– Cal Simmons, Chairman, 5 Star Alliance

‘Luxury by definition is something that appears to be the best of


whatever it represents- whatever that may be’
-Isadore Sharp, Founder, Chairman & CEO, Four Seasons Hotels &
Resorts

‘Luxury is defined by attention to details’


-Robert Mackasek, CEO, Valera Global

‘Luxury means total serenity’


-Herve Van Der Straeten, Furniture Designer

‘Without a doubt, time is the biggest luxury today’


-Jamie Cheng, Co-Founder, Halogen Guides

‘Luxury is uniqueness & exclusivity’


-John Varghese, General Manager, The Westin- Alexandria

‘Luxury is quite simply having access to experiences that very few


other people have access to’
- Mohan Murjani, Chariman, The Murjani Group
Luxury no longer means one thing…

A Google Image Search for ‘luxury’ indicates a move towards a more experiential definition
of the word, with not a brand in sight.
Luxury no longer means one thing…

One man’s luxury may be another man’s ostentation. And vice-versa.

Above all else, luxury is personal.


Therefore…a 4-point framework for understanding luxury

Global

Today

Yesterday

Local
The global luxury brand- a brief timeline
Founded in Paris, Founded in Paris,
1837 as a harness 1847 as a Founded in Florence,
workshop, jewelers, Founded in Paris, 1921, as a retailer of
creating harnesses primarily 1910 as a retailer exclusive women’s
& bridles for the supplying to of women’s hats purses
European gentry European royalty

1837 1847 1854 1910 1913 1921

Founded in New Founded in Paris, 1854 Founded in Milan, 1913 as


York, 1837 as a as a purveyor of a manufacturer of fine
‘stationery & fancy exclusive leather leather goods, primarily
goods emporium’ luggage luggage
Global luxury has its roots in

Catering to the ‘gentry’ of Offering products that Creating products with


the time; offering were marked by the longevity; use of materials
exclusive products & quality of their such as leather & precious
services that were beyond craftsmanship and were stones to create objects
the reach of the everyday largely hand made that transcend first hand
man ownership
Key Global Luxury Themes: Slowness

The average waiting time at one of


Gordon Ramsay’s 3 Michelin Star
rated restaurants is 40 minutes, while
that at a McDonald’s is 120 seconds

Value is built through time. The longer a product


or service takes, the higher the quality, and the
better the experience. Craftsmanship is what
differentiates ‘product’ from ‘art’ and
The average Boucheron necklace craftsmanship only comes with time.
takes 500 man hours to produce
and 14 years to learn the craft
Key Global Luxury Themes: Authenticity

Only sparkling white wine produced within the


76,000 acre province of Champagne in North
‘Swiss Made’ has come to
Eastern France can be called ‘champagne’, liquor
stand for luxury and
produced anywhere else in the world can merely
quality (both technical as
be called ‘sparkling white wine’
well as aesthetic) with
regard to watches;
however a watch can only
carry the ‘Swiss Made’
label when its movement
is Swiss, its movement is
Luxury is strongly linked to authenticity; in
cased in Switzerland and
promising the consumer an experience that is
the manufacturer carries
unique, un-duplicable and rooted in a strong
out the final inspection in
tradition of quality
Switzerland
Key Global Luxury Themes: Authority

The Birkin bag by Hermes, A ‘perfect pint’ of Guinness


priced between $8,000 and can only be produced by a
$80,000 depending on the ‘double pour, which
size and quality of leather according to the brand takes
used- has an average waiting 119.53 seconds. It should
period of 2-3 years also be served exactly at 6
degrees centigrade.

Luxury needs to be authoritative in its approach to the


consumer and adopt an almost ‘take it or leave it’
attitude; the more authoritative a brand, the greater
the aspiration and quality perceptions built around it
Key Global Luxury Themes: Vision & Transcendence

Luxury needs to be visionary and long term in


its impact. It needs to transcend trends &
fashions and be continuously relevant

French designer Yves Saint Laurent was credited with ‘the


emancipation of the modern woman’ with the creation of the
‘Le Smoking’ pantsuit in 1966. Since then the pantsuit has
become a staple power statement for women, with one of its
most visible proponents today being US Secretary of State
Hilary Clinton
The origins of luxury in India Jewelry

Food
Painting

Music

Clothing

Every aspect of luxury has its roots in India, and every


one of them had their roots in royal patronage
Architecture
Parisian Jewelers & Indian Royalty

Cartier first came to India in


1911, to sell to the Maharaja of
Patiala

In 1924, Boucheron followed


suit, though Cartier remained
the jeweler of choice

Maharaja Bhupindra Singh


remains the single largest client
in Cartier’s history and his
portrait still hangs in the
reception of Cartier’s global
headquarters in Paris
Yadavendra Singh, son of
Bhupindra Singh, Bhupindra, in the legendary
Maharaja of Patiala Cartier ‘Bestiary’ necklace
Key Indian Luxury Themes: Customization

The idea of ‘bespoke’ is an integral part of


affluent Indian culture, whether pertaining to
clothes, jewelry or anything else

So powerful is the cultural currency of


bespoke that even middle class India largely
have their clothes ‘tailored’

Mass, un-personalized offerings are the anti-


thesis of luxury in India, where value is
derived only from highly customized offerings
Key Indian Luxury Themes: Personalized Attention

Recognition is an important aspect of luxury


in India

Intrinsically linked to this is the notion of


personalized attention, of being recognized ,
of one’s name carrying weight

An offshoot of this is the specialized service


that one commands
Key Indian Luxury Themes: Service at home

The real mark of luxury in India is having


everything you need come to you.

Traditionally, affluent families in India have


had ‘family’ jewelers, tailors, and artisans
who regularly frequented their homes,
thereby ensuring that they would never have
to make the effort to actively go out and seek
them
Key Indian Luxury Themes: Access

Indian culture has always been defined by


access & privilege; your status determines
who or what you have access to

True luxury in India is about never having to


buy a ticket but always getting passes, about
never having to pay at a restaurant but being
invited for a meal because of who you are
Key Indian Luxury Themes: Flouting the Rules

Luxury in India is largely about not having to


conform to the ‘rules’

Having ‘contacts’ is the real mark of luxury in


India; regardless of the situation or the
context, power and prestige in India is a
function of knowing someone and
consequently being able to skip the queue,
get in (to exclusive events), get out (of
trouble) and in general live by one’s own rules
Key Indian Luxury Themes: Servility

An ingrained culture of social stratification


has ensured that ‘servants’ have always
been a vital part of the affluent Indian way
of life

As a result, an important measure of


luxury is the extent to which one never
needs to do anything for one’s self, be it
household chores, account keeping,
administrative tasks or anything else
Traditional Global vs. Traditional Indian Luxury

Process Led
Product Led
Luxury was rooted more in the process of
Luxury was rooted in the physicality of the its delivery; in the aspects of how it was
product; in the quality of its craftsmanship offered and consumed
and authenticity of its pedigree
Luxury became ingrained in the overall
Luxury emanated outwards from the process, with the product becoming the
product, and by consequence from the end point of this experience- luxury had to
brand, leading luxury to be purchasable be lived not just purchased

Luxury in itself became a product Luxury in itself became a lifestyle


The changing face of luxury today

From Product to Experience

Luxury is no longer trapped in the physicality of the


product, which anyone can buy

Luxury consumption is instead about enriching


experiences- sensorial & emotional

It is also about a deeper understanding of the brand,


its philosophy and the story behind its purchase
The changing face of luxury today

Time is the Biggest Luxury

The single largest shift in luxury today is the


premium placed on time; the one commodity that
no amount of affluence can purchase

True luxury today will evolve around cheating,


collapsing and creating time, both for the consumer
as an individual as well as in a more social context
(with family or friends)
The changing face of luxury today

The Rise of Meditative Luxury

The rapidly evolving luxury consumer is beginning to


seek out guilt-free experiences that transcend
ostentation and go against the more ‘mass’ trend of
conspicuous consumption

Luxury is beginning to lie in the purity and simplicity


of products or services
The changing face of luxury today

Multi Sensorial Luxury

Enriching and engaging experiences are not


about one single experience but rather about
being sensorially and emotionally stimulated
simultaneously. It needs to appeal to all 5 senses
and offer the consumer a truly holistic
experience.
The changing face of luxury today

The Rising Need for ‘Status Stories’

Today , luxury is becoming less about the status


attached to the actual product consumed, and
more about the status attached to the stories
that consumers tell one another.

For example, true luxury is not just about being


able to explore exotic, unchartered islands on a
luxury cruise- but about being able to tell
impressive stories about this on one’s return
The changing face of luxury today

Luxury is about Ideology, not Product

Luxury brands do not sell products but


ideologies, which is today the only thing worth
paying a premium for

Emotional resonance will be built by brands that


can convince their consumers to not look ‘at’
them (at their products) but to instead look ‘into’
them (at their philosophy)

The Body Shop for example, does not sell


cosmetics but rather the idea of ‘beauty with
ethics’
Bang & Olufsen does not sell audio systems but
rather the idea of the Scandinavian confluence of
form & function
The changing face of luxury today

The rise of Uber Luxury

With the growing democratization of luxury,


traditional luxury brands are becoming
increasingly easier to obtain and own

Due to this, as well as increasing consumer


confidence in themselves, there has been a rise
of new ‘uber luxury’ which marks a return to
individual, customized products & services

Uber luxury does not concern itself with ‘mass


market luxury brands’ but instead with small
scale, exclusive craftsmen who are unheard of
except in the ‘right circles’
The idea of ‘New Luxury’

Absorption & Personalization Rarity Imperfection Responsibility


Participation Being able to order The more unique & Is the anti-thesis of The belief that the
Being part of the products ‘off the special the materials cold, impersonal product being
experience of the menu’ and in the and design, the factory line production purchased has had
brand, partnering process creating more emotionally and indicates the no untoward impact
the brand in deeper and more powerful products presence of a human on the environment,
creativity and emotional tend to be hand, a strong mark of or on the person
creation of new relationships with the differentiation & who has made it
products & services brand luxury in today’s day &
age
The 5 Levels of Luxury

Given today’s
rapidly evolving
luxury consumer, a
brand needs to
‘Story Telling’ deliver on all 5 of
Product Brand Brand Consumption these counts in
1 Name Ideology Experience Potential
order to be viewed
2 as ‘true luxury’
3
The Fondazione Zegna,
4 dedicated to safeguarding
5 the environment &
promoting community life,
the Oasis Zegna in Trivero,
Italy, association with the
WWF, world leader in wool
Fine Men’s Ermenegildo ‘The nature Bespoke tailoring, unparalleled production innovation,
Clothing Zegna of luxury is attention to detail, the world’s official producer of the
derived from largest single buyer of Merino world’s finest wool (in
the luxury of wool, private tailor to Benito terms of micron count)
nature’ Mussolini, Ermenegildo Zegna
Vellus Aureum Trophy for wool
that is 13.9 microns or finer
The Consumption of Luxury in India
What it takes to build luxury in India
Luxury in India…then

Lotto was at the time


one of the only foreign
brands available in the
country and
consequently, highly
aspirational

The Standard 2000: India’s first


‘luxury’ car

Prior to India’s liberalization in 1991, luxury


was broadly defined as anything ‘foreign’
The most potent sign of
conspicuous
consumption among
urban Indian youth in
pre-liberalization India
Luxury in India…now

Jimmy Choo is but one


of the many global
luxury brands that are
now available in the
country

Rolls Royce one of the first luxury


automobile brands to enter India and now
competes with Bentley, Porsche &
Lamborghini to name but a few

Today, India’s definition of luxury is closer to that


Perrier (not coffee) is the
of the rest of the world. While merely being
most ordered beverage at
‘foreign’ is no longer enough for a brand to be
the coffee shop of the
luxurious, most luxury brands still continue to be
Imperial Hotel, New Delhi
global, save for a few exceptions (primarily in
jewelry and ethnic fashion)
The Indian Luxury Consumer Today

Highly westernized, rapidly


changing exterior

Unchanging hidden core of


traditional Indian values
Case in point…

The Judith Leiber crystal


studded ‘Ganesha’ evening
bag was launched at Rs.
2,60,000 in October 2008.
By November, it was
completely sold out across
the country

The Indian consumer is ready and eager to


consume global luxury; however this needs
to fit into his cultural context

Lladro decided to develop an India specific line of


porcelain figures for its launch in the country- and
decided to tap into religion as a theme.
The result:
Average Global Spend Per Transaction- $490
Average Indian Spend Per Transaction- $1700
The Indian Luxury Consumer…

THEN NOW

Offspring of successful urban businessmen


Offspring of royalty, with access to the best & professionals, with immense global
education and finest products money could cultural exposure
buy
Riders on the post liberalization economic
Ministers, merchants, musicians and other wave; businessmen, farmers, traders, etc
members of the royal court
Luxury is about product ownership and has
Luxury was about culture and ‘tehzeeb’; gotten increasingly democratized- accessible
truly accessible only to a select few to all who can afford it
Setting a cultural context…

India has traditionally been defined by a


culture of Brahminical Restraint, which
focuses on a ‘simple living, high thinking’
notion of conduct

At first glance, Brahminical Restraint may


seem like the anti-thesis of luxury; however
as we have already seen, India has always
had a strong tradition of luxury.

However, the consumption of luxury in India


has always been dependent on its cultural
legitimacy
The Legitimacy of Luxury

Certain categories in India culturally lend themselves to the consumption of luxury

Real Estate Weddings Jewelry Sarees Automobiles

A key marker of The most socially A symbol of status A clear indicator One of the most
status as well as significant day in a & gifting as well of class and social overt external
an investment family’s life as an investment standing indicators of social
and an asset status

External projection of status is therefore an underlying theme of traditional luxury


consumption in India
This of course stems from the impact of the caste system, which had at its core the
maintenance of clear distinctions between classes
The significance of ‘Bought From Abroad’
The need to preserve class distinctions manifested itself in the aura around products ‘from
abroad’. Shopping abroad has become entrenched in the culture of the affluent Indian consumer
due to authenticity of product, selection of merchandise, overall shopping experience and most
importantly, the exclusivity attached to it

Beverly Hill’s famed Rodeo Drive shopping DLF’s Emporio Mall in Vasant Kunj, New Delhi-
district currently running in heavy losses

Indian consumers are open to splurging on expensive product abroad but not willing
to spend equivalent amounts at home
The ‘Global Indian’

The need to drive exclusivity vis-à-vis the masses has reached its apex in the rise of the
‘Global Indian’, who are the true consumers of luxury in India

These Global Indians, while citizens of India are truly residents of the world; they
travel extensively and consume culture and products first hand from around the world
In turn, they are the culture leaders back home in India are heavily influence brand
perceptions & imagery
As a result, luxury in India is slowly moving in a global direction

From luxury as an object… …to luxury as an experience

However, despite this movement most luxury consumption in India remains


predominantly about display
Two sides to luxury consumption in India

INTERNALIZED EXTERNALIZED

Prevalent among consumers who are confident and self Prevalent more among the ‘new rich’ consumer who is
assured; they seek discernment & quality and consume less confident and more focused on reinforcing his status
brands based on their individual tastes through conspicuous displays of ostentation; they
consume brands based on recognizeability & flaunt value

However, these two mindsets can often co-exist; the same consumer who drinks single malt by
himself will only serve Johnnie Walker Black Label socially, due to the cultural cachet of the brand
Regardless of the prevalent mindset, luxury remains about
exclusivity & scarcity

Luxury is strongly driven by products &


experiences that are rare, exclusive and out of
the reach of the masses in general. The idea of
flaunting something that is only available to a
select universe of people, be it a function of
price, limited edition or by invitation only is
likely to be highly resonant.

Experiences that ‘money can’t buy’ or products


that are ‘limited edition’ or ‘one time only’
have far more currency than standard products,
no matter how expensive they may be.
Finally…luxury is driven by conversation, not communication

For the luxury consumer in India, nothing is


ever purchased from an unknown person

Everything is through a ‘contact’ if not a friend;


personal recommendations are what drive
purchase decisions to a large extent

The luxury consumer in India does not consume


traditional ATL communication but instead
relies on his peer set for pre purchase
recommendation and post purchase ratification
Therefore…building luxury in India is about

Ensuring the
Building a story brand’s offering
at a global level is culturally
relevant

Creating peer
Building in
based
exclusivity at
acceptance for
every level
the brand
Global Luxury Brands
What we can learn from them
A Brief History

Hermes is one of world’s most exclusive fashion houses, and specializes primarily in leather
goods, lifestyle accessories and perfumes

Unlike its competitors such as Louis Vuitton, which are largely considered to have spear headed
the ‘democratization of luxury’ Hermes is considered to have maintained its standards of
quality, craftsmanship and exclusivity

Hermes was one of the first global luxury brands to move from
product to experience

In the 1970s, Hermes was considered ‘too mature’ and ‘too boring’
for the times (with a two week period in 1975 being the first and
last time the Hermes workshop in Paris had to be closed due to
lack of orders).

Communication from that time, indicate a brand strongly anchored


to its products. However, by the 1980s the brand had realized the
need for a more story led brand experience, culminating with the
launch of the now legendary Birkin bag in 1984
The Birkin Katie
Holmes

•The Birkin Bag was named after British actress Jane Birkin and is now
considered the symbol of ‘ultimate luxury’ according to luxury expert Michael
Tonello

•A basic Birkin starts at $7500 (not including tax). There is no upper price limit
on the bag, as this depends on the type of leather and degree of
customization required (prices of some Birkins have been known to reach 6 Victoria
figure numbers) Beckham
•The average waiting period for a Birkin in two years and Hermes does not
retail the product online

•Birkins are considered ‘investment products’, with the value of the bags
actually appreciating over time
Jennifer
•Hermes provides a 4 step tutorial regarding verification of authenticity, which
includes such details as ‘the interior leather zipper tag needs to be parallel, Lopez
not perpendicular to the zipper hardware’

•The legend of the Birkin has grown immensely due to its role in pop culture
(television, music & film) as well its popularity with celebrities including Carla
Bruni, Janet Jackson, Julia Roberts, Oprah Winfrey, Katie Holmes, Lindsay
Lohan, Paris Hilton and Naomi Campbell to name but a few
The brand today

2007 2008 2009

Above The Line communication focuses on building aspiration and a unique brand ‘feel’ through
highly differentiated visual imagery
The brand today

Welcome Page Main Page

Online, Hermes is an entirely different animal; warm, friendly and charming; inviting the
consumer to immerse himself into the various aspects of the brand
A Brief History

The Four Seasons chain was founded by Isadore Sharp in Toronto,


Canada in 1960 and was described as ‘probably the finest luxury
hotel chain in the world’ by the Zagat Guide in 2008

The Four Seasons was the first 5 Star chain in the world to
introduce a full service spa on premise, which it did as early as
1986. From 2001 onwards, all Four Seasons properties worldwide
have spas Isadore Sharp, Founder
& Chairman, Four
Today, the chain operates 22 AAA 5 Diamond rated properties, Seasons Hotels & Resorts
more than any other chain in the world

The first ever Four Seasons property,


opened in Toronto, Canada in 1961
Guiding Principles

1. To operate only mid-sized properties and to never be


so large & impersonal as to not be able to recognize
and remember each guest

2. To be the best hotel of its size in every possible way in


each location

3. To believe in the Power of Personal Service; that


competitive advantage is built not through
infrastructure, but through service

4. To treat all others- customers, employees, partners,


suppliers- as one would wish to be treated

5. To move from a ‘hotel brand’ to a ‘luxury brand’ and


to make the Four Seasons name synonymous with
luxury that would transcend the hospitality category
Guiding Values

To positively impact on
and support
community goals in
each location

To support both local as


well as global efforts The Four Seasons, Mumbai hires all of its non-
towards eradicating specialized support staff locally, provides them
cancer with English language training and then places
them in its hotel

To involve all The hotel also eschews the normal luxury cars
employees & guests in used by most hotels and instead only uses red,
the preservation & Indian made Ambassadors for guest pick ups
protection of the planet and other services
A Brief History

Bang & Olufsen was founded by Peter Bang & Svend Olufsen in
Struer, Denmark in 1925

Bang & Olufsen began manufacturing radios with a focus on


‘honest music reproduction’, meaning that the music that reached
your ears would be uninfluenced by the limitations of technology

Today, Bang & Olufsen specializes in producing distinctive,


category-breaking design, highly differentiated from that of any The Beocom 80 cordless
other technology brand phone, designed for
B&O’s 80th anniversary
and limited to 600
pieces worldwide
The Beolite 39, Bang &
Olufsen’s first ever
Bakelite radio,
manufactured in 1939
What makes B&O so special?

The Bang & Olufsen vision


Courage to constantly question the ordinary in
search of surprising, long-lasting experiences

This is further built on 6 guiding principles-

1. Development of unique technologies

2. Creation of beautiful design

3. Usage of creative solutions

4. Provision of outstanding quality

5. Pursuit of unparalleled perfection

6. Quest to make the impossible possible


Maintaining the B&O mystique

Although B&O manufactures car


Bang & Olufsen communication tends to audio systems, the brand comes as
echo the visual feel of its design aesthetic; standard equipment only on three
highly minimalist with a focus on subtlety brands; Audi, Aston Martin and
rather than overtness Mercedes-Benz AMG
Luxury: from product to lifestyle

Quintessentially is a private members-only club offering a 24 Hour global concierge service


promising best in class solutions ‘no matter what you need, no matter where you need it’
The Vision

Quintessentially is first
and foremost a club ‘for
those who believe that
life is too short to waste
time on the mundane or
second-best’

Its mission is to bring its


members only the very
best whether it be
opera, music, art, travel,
food and drink
The Clientele

Sophie Dahl Jemima Goldsmith Gwyneth Paltrow Tom Chaplin


(model) (socialite) (actress) (musician)

Quintessentially has an intensive screening process and offers accepted members entry
into an exclusive social circle that includes celebrities from a number of different fields

In essence, this is the anti-thesis of the ‘democratization’ of luxury, and takes it back to its
roots- the provision of services that are only available to a select, elite few
A Few Luxury 1. Luxury, by definition can never be large or mass; Louis Vuitton, which is today
owned by 40% of all Japanese citizens is no longer a true ‘luxury’ brand but merely
Imperatives an expensive one

2. Luxury can never be overt; it needs to be understated and not easily understood

3. Luxury needs to set its own standards; it needs to create its own benchmarks for
itself as well as for its competition

4. Luxury needs to redefine consumer expectations; it is about giving the consumer


an experience that he has never been exposed to before

5. Luxury needs to transcend its category; a brand needs to approach luxury


conceptually rather than merely in the context of its particular category

6. Luxury needs to be relatively inaccessible; luxury should be about exclusivity, and


not just a function of mere price but of a far more exclusive screening process

7. Luxury needs to optimize life; ultimately, the consumer’s life experience needs to
be enriched and optimized -physically, mentally and most importantly emotionally

8. Luxury is driven by its consumers; high profile consumer usage is critical in order to
build aura and desirability around a brand

9. Luxury needs to give something back; luxury can no longer afford to be self
absorbed- it needs to give something back in order to retain consumer empathy
and create a ‘soul’
Luxury Brands in India
The story thus far
Current Scenario- Brand over Business
A number of international luxury brands are now
available in India in malls such as Emporio (New
Delhi), Palladium (Mumbai) and The Collective
(Bangalore)

However, for most of these brands, their presence in


India is more of a brand statement and less a
profitable business initiative

‘For us, its all about planting the flag and letting the
consumer know that we believe in the Indian
market…its not about making money just yet’ – John
Hooks, Deputy Managing Director, Giorgio Armani
Group

‘Our marketing plans for the city of Guangzhou in


China are bigger than that for all of India put
together’ – Ravi Thakran, South Asia Group Director,
LVMH

‘Yes, we are in the red but we had not expected to


show a profit for at least the first 5 years anyway.
Luxury is a long term game in India’ – Pia Singh,
Chairman, DLF Retail (owners of Emporio)
However, there are still some successes
Tag Heuer launched in India in 2002, in a market that
dominated by Rolex, Omega & Rado

In order to counter its competitive weaknesses


(primary among which were an unpronounceable
brand name and a total lack of equity vis-à-vis its
competitors) the brand decided that it could not wait
for consumers to come to it, and instead decided to go
to the consumer instead

Tag adopted an aggressive ‘Go Indian’ strategy, signing


Leverage F1 to build Leverage Bollywood on Bollywood stars Shah Rukh Khan & Priyanka
global credentials to build local connect Chopra and focusing on the ‘Page 3’ sport of polo to
build awareness through events

In line with its decision to constantly remain local in


its approach, it was one of the first brands to also rope
in boxer Vijender Singh post his Olympic bronze medal
win

Today, Tag Heuer is the #2 luxury watch brand in India


and has a retail footprint of 70 stores & 6 boutiques
across 25 cities- more than any of its competitors

Leverage ‘local buzz’ Leverage aspirational sport


to build relevance to retain exclusivity
However, there are still some successes
Grey Goose was launched 5 years ago, in a market dominated by
dark spirits, and where the benchmark for premium vodka was a
brand priced Rs. 1500 below it

Its success has largely been attributed to the ability of the brand
to become part of the lifestyle & culture of the super affluent
Indian consumer at various different touch points

Grey Goose is a regular at Lakme Fashion week, where it recently


created a line of ‘Fashionista Cocktails’ each designed by Indian
designers using local Indian ingredients such as clove &
The ‘St.Tropez Smash’ cardamom; it also offers branded luxury holidays to the French
The Grey Goose Bar at
Grey Goose cocktail, Riviera called ‘Grey Goose Journeys’
Lakme Fashion Week
created by designer
Tarun Tahiliani Finally, close to half of all Grey Goose events are charity based,
aiming at raising funds for NGOs such as Help Age India and The
Nas Foundation

‘The only thing our consumers like more than being seen, is being
Actress Perizaad seen doing something good’ – Arvind Krishnan, Marketing Head,
Zorabian at the Grey Bacardi Martini India
Goose fund raiser in
Mumbai Today, Grey Goose is the #1 selling super premium brand of vodka
in India , virtually creating the category in a country largely
predisposed towards whisky at the higher end of the market
And finally…one of India’s most visible global luxury brands

Founded in 1934, The Oberoi Group currently owns 30 hotels


across 5 countries and in 2007 was named The World’s Best
Hotel Chain (Non U.S) by Conde Nast Traveler
Rajvilas
(Jaipur) Despite its legendary service, the brand was perceived as
being primarily a business chain; in order to capitalize on
India’s rapidly burgeoning tourist market the Vilas brand of
super luxury leisure hotels was launched with the Rajvilas in
Jaipur in 1999
Udaivilas
(Udaipur) While the opulence of the Vilas resorts is a far cry from the
traditional understatedness of Oberoi properties, the highly
personalized service they offer identifies them as being purely
Oberoi

Amarvilas
In 2008, Travel + Leisure Magazine rated the Rajvilas,
(Agra) Udaivilas & Amarvilas as the World’s 2nd, 4th & 6th best hotels
and as Asia’s 1st, 2nd & 3rd best hotels respectively
What makes the Vilas brand so special?
The key to The Vilas’ service excellence is its philosophy of Dharma, an 8 step
code of conduct defining its approach towards its business, its consumers and
each other. Chief among these are;

1. Putting the customer first, the company second and the self last

2. Caring for the customer through anticipation of need, attention to detail,


excellence & aesthetics and a respect for privacy tempered with constant
warmth & concern

3. Eschewing the short-term quick fix for the long term establishment of
healthy precedent

Asides from this, the ideal of ‘meeting and consistently exceeding customer
expectations’ be it in terms of architecture, facilities, décor, amenities and of
course service also forms an integral part of both the brand’s mission as well as
vision. Its primary focus is on ‘showcasing India to the world like no other’

In a way, the Vilas brand is the Four Seasons of the Indian hospitality industry- a
purist brand whose philosophy for service is so internally driven that it is
almost precognitive in its anticipation of consumer needs

The Vilas is less a hotel brand that is luxurious than a luxury brand that just
happens to be a hotel
Therefore…to succeed as a luxury brand in India

1. A brand needs to tread a fine line between global imagery & local relevance;
strong global imagery with no local relevance will render a brand aspirational yet
excessively niche, while strong local relevance without a maintenance of global
imagery will erode exclusivity

2. A brand needs to go deep; ultimately business success will depend on the depth
to which a brand can penetrate the market; urban metro consumers while highly
susceptible to luxury brands, do most of their shopping abroad thereby leaving it
up to Tier 2 consumers to really build the luxury business

3. A brand needs to integrate itself into the lifestyle of its consumers; luxury
brands can no longer expect to be aspirational enough to attract consumers to
them, instead they need to insert themselves into the lives of their consumers at
every possible point while at the same time maintaining their exclusivity

4. A brand needs to have a heart; contrary to popular belief, the Indian luxury
consumer is also highly attracted to brands that ‘give back’; the relative dearth
of brands currently doing so in India make this an ideal platform through which
to build differentiation & empathy

5. A brand needs to understand luxury from an Indian point of view; as discussed


previously, the Indian view of luxury is one of process over product, that focuses
on service and treatment more than just product quality- this is an important
imperative for all luxury brand, regardless of category
Thank You

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