MINOR PROJECT

ON

GROWTH AND POTENTIAL OF LUXURY INTERNATIONAL

FASHION BRANDS IN INDIA

SUBMITTED

BY

PALLAVI KHANDELWAL

UNDER THE SUPERVISION

OF

DR. BINAYA BHUSAN JENA

Department of Fashion Management Studies

National Institute of Fashion Technology,
Ministry of Textiles, Government of India,
CIT Campus, No 136/ 137, Ramchandrapur,
Jatni, Khurda, Bhubaneswar – 752050
Ph: 0674-2492997, Fax: 0674-2490992
Website: www.nift.ac.in
2011

1
2
 MINOR PROJECT

ON

GROWTH AND POTENTIAL OF LUXURY INTERNATIONAL

FASHION BRANDS IN INDIA

SUBMITTED

BY

PALLAVI KHANDELWAL

UNDER THE SUPERVISION

OF

DR. BINAYA BHUSAN JENA

Department of Fashion Management Studies

National Institute of Fashion Technology,
Ministry of Textiles, Government of India,
CIT Campus, No 136/ 137, Ramchandrapur,
Jatni, Khurda, Bhubaneswar – 752050
Ph: 0674-2492997, Fax: 0674-2490992
Website: www.nift.ac.in

3
 2011

ACKNOWLEDGEMENT

First and foremost I would like to thank Prof. Binaya Bhusan Jena who helped me a lot with
my topic and giving me a direction as to how to go about it.

He enlightened my mind with the major problems faced by the Indian luxury market and
helped me under his guidance.

Secondly I would like to thank all those retail industry executives who helped me fill the
survey and helped me to understand much more about the luxury market.

-PALLAVI KHANDELWAL

4
 DECLARATION

I Pallavi Khandelwal here by declare that this minor project has been prepared by me with the
help of few people.
I guarantee that this project does not contain any explicit content or any derogatory topic or
slang, which can hamper anyone’s reputation or can be against the code of conduct.
This project does not contain any vulgarity and abuse. I have accomplished this project with
full vigil and care.

Date- 07-05-2011 -PALLAVI KHANDELWAL

5
INDEX

6
 INTRODUCTION

S.NO. TOPICS PAGE NO.

1. INTRODUCTION 7

2. OBJECTIVE 8

3. PROBLEM DEFINATION 8

4. HYPOTHESIS 9

5. RESEARCH METHODOLOGY 9

CHAPTERISATIONS
S.NO.

6. INDIA AT A GLANCE 10-14

7. UNDERSTANDING LUXURY AND

AQUAINTING WITH THE LUXURY FASHION 15-22
BRANDS

8. PERSONA OF LUXURY BRANDS 23-26

9. FAMOUS LUXURY BRANDS AND THEIR 27-34

DESTINATIONS IN INDIA

10. SWOT ANALYSIS 35-38

11. GROWTH AND POTENTIAL OF LUXURY 39-45

FASHION BRANDS IN INDIA

12. LUXURY FASHION BRANDING STRATEGIES 46-47

13. FINAL SUMMARY 48-51

14. QUESTIONNAIRE 52-56

15. BIBLIOGRAPHY 57-58

7
If we look into the past, no one could imagine that a luxury market would exist in India. But
over the years with the change in the demographics of the Indian consumer and with higher
disposable income available, the luxury market in India has indeed emerged as one of the
fastest growing markets in the retail segment.
Through this report I have tried to give an estimate of the luxury retail market in India, how
much it has penetrated and also how much it is likely to grow. Also I have tried to specify
various factors that are crucial for the success of luxury brands in India. While doing out
research on this project I have come across many new findings. The role the Indian market
plays in the global scenario and the position of India vis-à-vis other countries. Also I
understood about the duties and legal requirements for this segment.
I have tried my level best to cover all the aspects in regard to my research.

India today is fast becoming a new world of modern luxury. The country now teems with
luxurious international brands, spurring the ascent of an Indian luxury market. One does not
need to travel abroad to shop for luxury. Luxury goods and services sit aplenty right at home.
Indians, however, have to realize such, be informed where to avail of them, and be convinced
of the convenience and ease of access to these luxury goods and services. In the same vein,
foreigners can also visit India to shop for same luxury.
India can very well be placed on the global luxury-shopping map. There is, therefore, a huge
opportunity to pump prime the luxury market field in India.

PROBLEM DEFINITION

8
The Indian Luxury Market is still a niche market and people have got a
very low personal disposable income, though it has increased a lot from
before but not so much to afford international luxury fashion brands and
the people who have got a high disposable income lack enough knowledge
about the international fashion brands available in India as the luxury
international stores are limited to metropolitans only.

OBJECTIVE

PRIME OBJECTIVE:

To analyze the Current Scenario and the Growth of Indian Luxury fashion brands and the
Market.

CO-OBJECTIVES:

1. Analyze the Luxury Brand Awareness among the Indian consumers.

2. Reasons behind customers buying Luxury fashion Brands
3. Analyze the major international fashion brands in India.

9
 HYPOTHESIS

1. Assuming that there is a strong scope for the growth of international luxury fashion brands
in India.

2. Taking an assumption that Luxury fashion brands do not have much scope in the Indian
market.

RESEARCH METHODOLOGY

NATURE OF RESEARCH:

Exploratory and Analytical research.

PRIMARY SOURCES:

Surveys and interviews with the luxury brand

Retailers.
Questionnaires to be filled by the customers.

SECONDARY SOURCES:

Books
Magazines
Newspapers
Internet and websites

10
CHAPTER 1

INDIA AT A
GLANCE

11
FOCUS OF THE CHAPTER: Study about India and its habitats.

India is one of the oldest civilizations in the world with a kaleidoscopic variety and rich
cultural heritage. It has achieved all-round socio-economic progress during the last 60 years of
its Independence. India has become self-sufficient in agricultural production and is now the
tenth industrialized country in the world and the sixth nation to have gone into outer space to
conquer nature for the benefit of the people. It covers an area of 32,87,2631 sq km, extending
from the snow-covered Himalayan heights to the tropical rain forests of the south. As the 7th
largest country in the world, India stands apart from the rest of Asia, marked off as it is by
mountains and the sea, which give the country a distinct geographical entity. Bounded by the
Great Himalayas in the north, it stretches southwards and at the Tropic of Cancer, tapers off
into the Indian Ocean between the Bay of Bengal on the east and the Arabian Sea on the west.
Lying entirely in the northern hemisphere, the mainland extends between latitudes 8°4′ and
37°6′ north, longitudes 68°7′ and 97°25′ east and measures about 3,214 km from north to
south between the extreme latitudes and about 2,933 km from east to west between the
extreme longitudes. It has a land frontier of about 15,200 km. The total length of the coastline
of the mainland, Lakshadweep Islands and Andaman& Nicobar Islands is 7,516.6 km.

12
GEOGRAPHY:
Location: The Indian peninsula is separated from mainland Asia by the Himalayas. The
Country is surrounded by the Bay of Bengal in the east, the Arabian Sea in the
west, and the Indian Ocean to the south.

Geographic Coordinates: Lying entirely in the Northern Hemisphere, the Country extends between 8° 4′
and 37° 6′ latitudes north of the Equator, and 68°7′ and 97°25′ longitudes east of
it.

Indian Standard Time: GMT + 05:30

Area: 3.3 Million sq km

Telephone Country Code: +91

Border Countries: Afghanistan and Pakistan to the north-west; China, Bhutan and Nepal to the
north; Myanmar to the east; and Bangladesh to the east of West Bengal. Sri Lanka
is separated from India by a narrow channel of sea, formed by Palk Strait and the
Gulf of Mannar.

Coastline: 7,516.6 km encompassing the mainland, Lakshadweep Islands, and the Andaman
& Nicobar Islands.

Climate: The climate of India can broadly be classified as a tropical monsoon one. But, in
spite of much of the northern part of India lying beyond the tropical zone, the
entire country has a tropical climate marked by relatively high temperatures and
dry winters. There are four seasons – winter (December-February), (ii) summer
(March-June), (iii) south-west monsoon season (June-September), and (iv) post
monsoon season (October- November).

Terrain: The mainland comprises of four regions, namely the great mountain zone, plains
of the Ganga and the Indus, the desert region, and the southern peninsula.

Natural Resources: Coal, iron ore, manganese ore, mica, bauxite, petroleum, titanium ore, chromite,
natural gas, magnesite, limestone, arable land, dolomite, barytes, kaolin, gypsum,
apatite, phosphorite, steatite, fluorite, etc.

Natural Hazards: Monsoon floods, flash floods, earthquakes, droughts, and landslides.

Environment – Current Air pollution control, energy conservation, solid waste management, oil and gas
Issues: conservation, forest conservation, etc.

Environment – International Rio Declaration on environment and development, Cartagena Protocol on

Agreements: biosafety, Kyoto Protocol to the United Nations Framework Convention on
climatic change, World Trade Agreement, Helsinki Protocol to LRTAP on the
reduction of sulphur emissions of nitrogen oxides or their transboundary fluxes
(Nox Protocol), and Geneva Protocol to LRTAP concerning the control of
emissions of volatile organic compounds or their transboundary fluxes (VOCs
Protocol).

Geography – Note: India occupies a major portion of the south Asian subcontinent.

13
PEOPLE:

Population: 1,21,01,93,422

Decadal Population Male: 9,15, 01,158

Growth: Female: 8,99, 54, 828

Density of Population: 382 per sq. km.

Sex Ratio: 940 per 1000 males

Nationality: Indian

Ethnic Groups: All the five major racial types – Australoid, Mongoloid, Europoid,
Caucasian, and Negroid find representation among the people of
India.

Religions: Hindus constituted the majority with 80.5 %, Muslims came second
at 13.4%, followed by Christians, Sikhs, Buddhists, Jains, and
others.

Languages: There are 22 National Languages have been recognized by the

Constitution of India, of which Hindi is the Official Union
Language. Besides these, there are 844 different dialects that are
practiced in various parts of the Country.

Literacy: Persons: 77,84,54,120

Males: 44,42,03,762
Females: 33,42,50,358

GDP: Nominal GDP stands at US$1.53 trillion as per 2010 census

14
GOVERNMENT:
Country Name: Republic of India; Bharat Ganrajya

Government Type: Sovereign Socialist Democratic Republic with a Parliamentary system of

Government.

Capital: New Delhi

Administrative Divisions: 28 States and 7 Union Territories.

Independence: 15th August 1947 (From the British Colonial Rule)

Constitution: The Constitution of India came into force on 26th January 1950.

Legal System: The Constitution of India is the fountain source of the legal system in the
Country.

Executive Branch: The President of India is the Head of the State, while the Prime Minister is the
Head of the Government, and runs office with the support of the Council of
Ministers who form the Cabinet Ministry.

Legislative Branch: The Indian Legislature comprises of the Lok Sabha (House of the People) and the
Rajya Sabha (Council of States) forming both the Houses of the Parliament.

Judicial Branch: The Supreme Court of India is the apex body of the Indian legal system, followed
by other High Courts and subordinate Courts.

Flag Description: The National Flag is a horizontal tricolour of deep saffron (kesaria) at the top,
white in the middle, and dark green at the bottom in equal proportion. At the
centre of the white band is a navy blue wheel, which is a representation of the
Ashoka Chakra at Sarnath.

National Days: 26th January (Republic Day)

15th August (Independence Day)
2nd October (Gandhi Jayanti; Mahatma Gandhi’s Birthday)

SOURCE: censusindia.gov.in/2011-prov-results/indiaatglance.html

15
CHAPTER 2
UNDERSTANDING
LUXURY AND
ACQUAINTING WITH
THE LUXURY FASHION
BRANDS

16
FOCUS OF THE CHAPTER: Getting introduced to the term “LUXURY”

Luxury, derived from the Latin word luxus, means indulgence of the senses, regardless of
cost.

Luxury is something that everyone wants but nobody needs, its an area of huge comfort and
the best of the best.

A luxury brand is a brand for which a majority of its products are luxury goods. It may also
include certain brands whose names are associated with luxury, high price, or high quality,
though few, if any, of their goods are currently considered luxury goods.
The luxury sector targets its products and services at consumers on the top-end of the wealth
spectrum. These self-selected elite is more or less price insensitive and chooses to spend their
time and money on objects that are plainly opulence rather than necessities.
For these reasons, luxury and prestige brands have for centuries commanded an unwavering
and often illogical customer loyalty.

17
DEFINING LUXURY
The concept of luxury has been present in various forms since the beginning of civilization. Its
role was just as important in ancient western and eastern empires as it is in modern
societies. With the clear differences between social classes in earlier civilizations, the
consumption of luxury was limited to the elite classes. It also meant the definition of luxury
was fairly clear. Whatever the poor cannot have and the elite can was identified as luxury.
With increasing ‘democratization’, several new product categories were created within the
luxury markets that were aptly called – accessible luxury or mass luxury. This kind of luxury
specifically targeted the middle class (or what is sometimes termed as aspiring class). As
luxury penetrated into the masses, defining luxury has become difficult.
In contemporary marketing usage, Prof. Bernard Dubois defines ‘luxury’ as a specific (i.e.
higher-priced) tier of offer in almost any product or service category. However, despite the
substantial body of knowledge accumulated during the past decades, researchers still haven’t
arrived on a common definition of luxury. Many other attempts have been made to define
luxury using the price-quality dimension stating higher priced products in any category is
luxury. Similarly, researchers have used the uniqueness aspects of luxury too. Prof. Jean-Noel
Kapferer, takes an experiential approach and defines luxury as items which provide extra
pleasure by flattering all senses at once. Several other researchers focus on exclusivity
dimension and argue that luxury evokes a sense of belonging to a certain elite group.

18
SOCIO-ECONOMIC SIGNIFICANCE OF LUXURY

Several manufactured products attain the status of "luxury goods" due to their design, quality,
durability or performance that are remarkably superior to the comparable substitutes. Thus,
virtually every category of goods available on the market today includes a subset of similar
products whose "luxury" is marked by better-quality components and materials, solid
construction, stylish appearance, increased durability, better performance, advanced features,
and so on. As such, these luxury goods may retain or improve the basic functionality for
which all items of a given category are originally designed.
There are also goods that are perceived as luxurious by the public simply because they play a
role of status symbols as such goods tend to signify the purchasing power of those who
acquire them. These items, while not necessarily being better (in quality, performance, or
appearance) than their less expensive substitutes, are purchased with the main purpose of
displaying wealth or income of their owners. These kinds of goods are the objects of a socio-
economic phenomenon called conspicuous consumption and commonly include luxury
vehicles, watches, jewelry, designer clothing, yachts, as well as large residences,
urban mansions, and country houses.

19
AQUAINTING WITH THE LUXURY FASHION BRANDS

Luxury fashion brands have often been associated with the core competencies of creativity,
craftsmanship, precision, high quality, innovation, & premium pricing. These product
attributes give the consumers the satisfaction of not only owning expensive items but the
extra-added psychological benefits like the esteem, prestige and a sense of a high status that
reminds them and others that they belong to an exclusive group of only a select few, who can
afford the pricey items.
The luxury sector targets its products and services at consumers on the top-end of the wealth
spectrum. These self-selected elite is more or less price insensitive and chooses to spend their
time & money on objects that are plainly opulence rather than necessities. For these reasons,
luxury and prestige brands have for centuries commanded an unwavering and often illogical
customer loyalty.
Luxury has never been something easy to define; yet this mystery concept is something highly
desired by one & all alike. I look at delving deeper into this mystery and aura of luxury goods
by way of comparing them against ‘regular goods’ as well as highlighting the characteristics
of the luxury industry.
But before beginning with that, lets first attempt to understand some common terms associated
in the world of high-end goods:

Luxury and Prestige brands such as Rolex, Louis Vuitton and Tag-heuer represent the
highest form of craftsmanship and command a staunch consumer loyalty that is not affected
by brands. These brands create and set the seasonal trends and are also capable to pulling all
their consumers with them wherever they go.

Premium brands are those brands like Polo Ralph Lauren, Versace and Tommy Hilfiger that
aspire to be luxury and prestige brands but their marketing mix strategies are more attuned to a
mass market, albeit a luxury mass market. They also termed as mass Premium brands or
luxury brands.

20
Fashion brands are those that address the masses.
LVMH (Louis Vuitton Moet Hennessy) is the largest luxury good producer in the world with
over fifty brands, including Louis Vuitton, the brand with the world's first designer label, other
famous fashion brands are Chanel, Gucci etc.

Luxury is a Hub of Business

Luxury brands take the elements they feel passionate about, add design then develop it and
present it to the customers that exceed their expectations.
A luxury good is a product at the highest end of the market in terms of quality and price.
Classic luxury goods include haute couture items such as clothing, accessories and luggage.
However, many markets have a luxury segment including for instance, cars, wine and
chocolates. Such brands share characteristics like consistent premium quality, a heritage of
craftsmanship, a recognizable style or design, a limited production run of any item to ensure
exclusivity, an element of uniqueness and an ability to keep coming up with new designs
when the category is fashion-intensive.
Keeping it simple and realistic, luxury is anything and everything that you may truly desire; it
can be short lived or a life long desire – it is ‘your’ emotional connect and reward that allows
it to appear as luxury.

21
 MAJOR DIFFERENCES BETWEEN REGULAR BRANDS AND
LUXURY BRANDS:

FACTOR REGULAR GOODS LUXURY GOODS

Available at convenience and Available at posh, exclusive

PLACE according to the product and selected locations
category

 Multiple mass variances  Highly customized or

but standardized. limited editions of
PRODUCT
 Service levels range from products.
low to high.  Very high personnel
service.

PRICING Value for money Premium pricing

PROMOTION  All kinds of media (ATL,  Pre-dominantly

BTL) used. premium above the line
 Product functional and media.
aspirational value appeals. e.g. Connoisseur,
 All kinds of reference Magazines,
group appeals used. Travel media)
 Products have the

22
 exclusive appeal.

 Mostly celebrity
appeals.

Those goods for which demand Luxury goods are also called
ECONOMIC is inversely proportional to as Veblen’s goods, the
DEFINITION price. demand for the product is
said to increase with the
increase in price.

BRAND Based on defending your turf. Based on marketing the

EXTENSION (R&D based decisions to an luxury brand.
DECISIONS extent).

DRIVERS OF Functional attributes and

Tradition and brand heritage.
BRANDS innovation.

Source: Luxury Marketing, Samit khanna- IIM-A

23
CHAPTER 3

PERSONA OF
THE INDIAN
LUXURY
INDUSTRY
24
FOCUS OF THE CHAPTER: Understanding the characteristics of luxury
brands.

CHARACTERISTICS OF INDIAN LUXURY INDUSTRY:

1. THE MEANING OF LUXURY HAS CHANGED:

Luxury has moved from its ‘old’ meaning of ownership (also known as conspicuous
consumption - Conspicuous consumption is a term used to describe the lavish spending on
goods and services that are acquired mainly for the purpose of displaying income or wealth
rather than to satisfy a real need of the consumer. In the mind of a conspicuous consumer,
such display serves as a means of attaining or maintaining social status. Invidious
consumption, a necessary corollary, is the term applied to consumption of goods and services
for the deliberate purpose of inspiring envy in others) of objects to the ‘new’ meaning of the
experience / fulfillment derived from possessing a certain object.

2. LUXURY MEANS DIFFERENT TO DIFFERENT PEOPLE:

Luxury has no certified origins. But luxury branding is said to have taken birth in the west
with the appearance of high-end brands. But there is still no definite meaning of luxury, for
someone luxury can be a necessity and vice-versa.
If one can think a luxury brand is really cheap, its not necessary that the other person also will
think the same way.

25
Luxury is yet to be defined, it totally differs from person to person.

3. LUXURY IS A PRODUCT CATEGORY IN ITSELF:

This can be best clarified by the fact that both an expensive watch and an apparel can be
considered to be luxury items. Therefore, all luxury marketers are not just competing in their ‘
technically defined’ product categories (like manufacturers of televisions compete among
themselves) but for the wallet share of luxury goods in total.

4. CLASSIFICATION OF LUXURY CONSUMERS:

SRI Consulting Business Intelligence places consumers in 3 groups according to what luxury
means to them:

Luxury is Indulgence – This group is the smallest of the three and tends to include
younger consumers and slightly more males than the other two groups. Their purpose for
luxury goods is to lavish themselves in self-indulgence. They are willing to pay a premium for
goods that express their individuality and make others take notice and are not overly
concerned with product longevity or possible criticism. They enjoy luxury for the way it
makes them feel, therefore have a more emotional approach to purchases.
They respond well to messages that highlight the unique and emotional qualities of a product.

Luxury is Reward – These consumers tend to be younger than the first group but older than
the third. They use luxury goods as a status symbol to say “ I’ve made it! ” They are motivated
by their desire to be successful and demonstrate this to others. Luxury brands that have
widespread recognition are popular, however they don’t wish to appear lavish or hedonistic in
their appearance. They want to purchase “smart” luxury that demonstrates importance while
not leaving them open to criticism. Marketing messages that communicate acceptable

26
exclusivity resonate with this group.

Luxury is Functional – these consumers tend to buy luxury products for their superior
functionality and quality. Consumers in this segment, the largest of the three, tend to be older
and wealthier and are willing to spend more money to buy things that will last and have
enduring value. They buy a wide array of luxury goods, from artwork to vacations, and
conduct extensive prepurchase research, making logical decisions rather than emotional or
impulsive. Messages that highlight product quality and are information-intensive are powerful
with this group.

5. CUSTOMER LOYALTY IS MORE IMPORTANT THAT BRAND

AWARENESS:

Rather than focus on measuring the brand awareness of a luxury company, measuring
customer loyalty is far more significant a metric regarding the success or failure of corporate
strategy to connect with the luxury consumer.

6. CERTAIN FACTORS WHICH PLAY A N IMPORTANT ROLE:

In luxury marketing there is a subtle interplay between three factors that most strongly
influence the luxury consumer to buy: product brand; dealer or store’s brand or service
providers’ reputation; and price/value relationship.

USERS OF LUXURY BRANDS IN INDIA:

 CEOs and other senior professionals
(in their thirties and early forties)

27
 Entrepreneurs in new businesses
 "Prodigal children"
 Actors and models
 Franchisees, and small and medium Retailers

CHAPTER 4
FAMOUS LUXURY
BRANDS AND THEIR
DESTINATIONS IN
INDIA
28
FOCUS OF THIS CHAPTER: To evaluate about all the famous luxury brands
available in India and the places where they are available.

THE PRESENT SCENERIO OF THE MARKET-

29
 Q u ic k T im e ª a n d a
d e c o m p re sso r
a r e n e e d e d t o s e e t h is p ic t u r e .

Source: IMD World Competiveness Yearbook 2006

30
LUXURY DESTINATIONS:

Q u ic k T im e ª a n d a
d e c o m p re s s o r
a r e n e e d e d t o s e e t h is p ic t u r e .

31
LUXURY MALLS IN INDIA:

Q u ic k T im e ª a n d a
d e c o m p re s s o r
a r e n e e d e d t o s e e t h is p ic t u r e .

Source: Google images

32
UB CITY- THE COLLECTION, BANGALORE:

UB City is the biggest commercial property project in Bangalore, India. Pioneered by the
chairman of UB Group, Dr.Vijay Mallya , it is built on 13 acres (53,000 m2) of land and hosts
1,000,000 sq ft (93,000 m2) of high-end commercial, retail and service apartment space. UB
City has four towers namely, UB Tower (19 Floors), Comet (11 Floors), Canberra (17 Floors)
and Concorde (19 Floors).

UB City has four towers namely, yelahanka. The later three towers are all named after aircraft.
UB City will house the Group offices under one roof - UB Tower. Concorde & Canberra will
have retail space on the lower floors and office space in the higher levels, while Comet will
have serviced apartments. It will house commercial offices, banks, high-end retail stores, a
five star hotel, serviced apartments, restaurants, food courts, pubs, health clubs and cafes.
Multi-level parking areas will offer virtually unlimited parking spaces. Also on the blueprint is
an amphitheatre with food courts and landscaped gardens. UB City will provide parking space
for over 1,100 cars. Being an environment friendly project and keeping in mind the green
surroundings of Cubbon Park, one-third of the space has been earmarked for landscaped
gardens.
An elevated roof top helipad will provide a five-minute aerial commute to the airport. Four
storeys of multi level parking, in addition to one common basement for the entire UB City and
extensive surface level car parks, will provide UB City the remarkable prospect of offering
literally unlimited car parking space.

33
BRANDS AVAILABLE AT UB CITY-THE COLLECTION:

 Louis Vuitton
 Alfred Dunhill
 Estee lauder
 Mont Blanc
 Zimson
 Rolex
 Canali
 Salvatore Ferragamo
 Paul Smith
 Lladro
 Versace
 Corneliani
 Burberry
 Jimmy Choo
 Diesel

34
DLF EMPORIO, NEW DELHI-

DLF Emporio has been designed as a name synonymous with luxury - offering a unique
shopping experience where the accent is on exclusivity, space and aesthetics. There is simply
no other place where such a wealth of designer and premium merchandise, lifestyle products
and services are showcased under one elegant roof. The nuances of luxurious serenity are
going to be expressed at DLF Emporio in a way found only in the fashion capitals of
the world, offering just the right kind of tasteful and sublime ambience to attract high value
spenders.

DLF EMPORIO RETAIL MIX-

Great care is being taken to ensure that the global retail community at DLF Emporio is the
most premium. Only the finest signature brands, designer labels and high end lifestyle
products co-exist here. Some of the brands in DLF Emporio include Giorgio Armani,
Salvatore Ferragamo, Louis Vuitton, Cartier, Fendi, Dior, Just Cavali, DKNY, Tods,
Burberry, Hugo Boss to name a few.

35
ESSENTIAL PLAYERS OF THE LUXURY MARKET IN INDIA:

 JEWELLERY- Cartier, De Beers, Tiffanys etc.

 CLOTHING- Louis vuitton, Varsace, Armani, Chanel, Gucci etc.
 ACCESSORIES- Fendi, Jimmy Choo, Ferragamo Salvatore etc.
 AUTOMOBILES- Mercedes, Volvo, BMW, Volkswagen, Nissan, Audi etc.

36
CHAPTER 5
SWOT ANALYSIS

37
FOCUS OF THE CHAPTER: To do the swot analysis and ascertain the major
problems faced by the international fashion brands in India.

STRENGTH WEAKNESS

1. Brand Name/Brand Ambassadors 1. Concentrated Market-only metro cities

2. Customer Loyalty 2. Government Regulations
3. Quality 3. High Prices
4. Global Presence 4. Percentage of target audience is Less
5. Higher Operational cost-rents.

OPPORTUNITY THREATS

1. Fake branded stuff available in India

1. Manufacturing the brands in India itself
2. Available at cheaper prices abroad
rather than importing it
2. FDI Regulations
3. Globalization

38
MAJOR PROBLEMS FACED BY THE LUXURY FASHION INDUSTRY-

1. LACK OF AWARENESS OF BRANDS AMONGST INDIAN CONSUMERS:

The Indian consumers are not aware of the brands available in India, Most rich people who
can afford the luxury brands either live in smaller towns and cities where there is no outlet or
awareness of the brands.

2. PREFERENCE OF BUYING FROM FOREIGN COUNTRIES:

People who are aware of the brands and live in metro cities and have a higher disposable
income prefer buying from abroad as they travel a lot and so they prefer buying from abroad
itself as they get a better and wide variety of products with lesser prices.

3. DUPLICATION AND KNOCK-OFFS:

There are a lot of duplicate and knock-offs available in the Indian market. Most of these
products come from China. The same branded product, which is available for 25000 Rs., is
available for 1500 Rs. When it is not authentic. Though the quality of these products is not
good, they appear to be the same and hence people don’t mind buying them.
But people in India do not believe in authenticity, if they see the name and the knock-off looks
exact, they buy that item as they believe in showing off.

4. LACK OF RETAIL SPACE:

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The luxury retail stores are located in 5 star hotels or malls in selected cities, as we all know
that there are only two luxury malls in India, The collection-UB City, Bangalore and the DLF-
Emporio Mall, New Delhi, because that is where the potential customers are most likely to
come for shopping, hence the feasible space available is very less.
5. LOW CUSTOMER TURNOVER:

The number of customers who visit a luxury store is comparatively lower than a regular store.
Also the luxury store outlets are located exclusively in certain areas and are sometimes not
accessible by everyone, this factor also affects the customer turnover.

6. HIGH OPERATIONAL COST:

The cost of operating a luxury outlet is high because the size of the store has to be elaborated
and also it has to locate at a prime location in major cities. Due to the image that is associated
with luxury products, the cost of maintaining the store is high because it has to look upbeat all
the time. At the same time these stores normally situated in 5 star hotels or big shopping malls
where the rents charged are very high and hence the cost is further increased.

40
CHAPTER 6
GROWTH AND
POTENTIAL OF THE

41
 LUXURY FASHION
BRANDS IN INDIA

FOCUS OF THE CHAPTER: Study about the roots and the growth of the
luxury market of India.

LUXURY is no stranger to India. The erstwhile maharajas and princes led a life of opulent
splendor. The only way to be apart of the elite as to be born into it. The lifestyle as also
associated with hunting, polo and her games of the rich. New money could never
get into this circuit. The aspiration was always there. But the princes operated in a different
league altogether. The era of the self-made millionaire was yet to arrive. So small possessions,
or copied fashion designs with a few geegaws thrown in, became the
height of luxury. An achiever of the 1970s could only get by with a good foam mattress — no
Omega, Rolex or BMWs. This trend saw a shift, a gradual one, in the 1980s.

Luxury began creeping into upper class homes through small things and symbols. The
colour TV came in, the humble pen was elevated to a Parker, successful self-made people
began to be featured in magazines. The concept of luxury as a reward for achievement gained
acceptance, though royalty and the aristocracy continued to remain the benchmark of the elite.
The real change came in the 1990s when more people started making more money. There was
a sudden explosion of colour and things and objet D'arts began to appear. In order to gain
access to luxury and class one could just go out and charge it. What contributed to this shift?
India opened up to the world. The liberalization process brought more than high economic
growth rates. It showed the people what was possible. In the process, it has altered mindsets.
The IT revolution, and the consequent demand for Indian brainpower, has created a whole
new breed of wealthy global Indians. At the other end, an increasingly open economy has

42
created new business opportunities, which has resulted in a slew of new, extremely successful
first generation businessmen. They are millionaires. They spend. They sport Vertu mobiles.
But they may not even be comfortable with English. All of a sudden, wealth is no longer the
preserve of the elite.

GROWTH OF INDIAN LUXURY MARKET:

India has the potential to be a retail powerhouse, with luxury as its keystone.
Though the U.S. and Europe have struggled with recession and economic downturns, the
high-end retail apparel industry has not been adversely affected in India, according to
Shailendra Sharma, PhD, professor of Politics at the University of San Francisco and author
of China and India in the Age of Globalization.

"Indications are that middle class consumers in both India and China continue to buy high-end
apparel,” Sharma says. "Keep in mind, that unlike Americans, Asian consumers are not
heavily indebted." Like China, India is a "saving society," Sharma says.

Currently, 77% of India's consumers have a "somewhat or very optimistic" outlook for their
country's economy, according to the Cotton Incorporated and Cotton Council
International Global Lifestyle Monitor survey. This translates to a high percentage of
consumers who plan to purchase apparel; about 54% plan to buy as much or more casual
clothes in next 12 months, while 61% plan to buy as much or more formal apparel.
The increase in planned purchases of formalwear hints at India's potential to become a leading
market for luxury goods within the next decade, a finding corroborated by a research report by
Sanford C. Bernstein Limited. It cited the migration of rural Indians into towns and cities, and
the country's median age of 25, with 35% younger than 14 years old, as factors for future
growth.

India was ranked third in A.T. Kearney's ninth annual Global Retail Development Index of
markets with the greatest potential for retail development.
Management consulting firm McKinsey & Company recently reported India apparel sales

43
could reach $25 billion this year and $55 billion by 2015. Indians spend the most on buying
clothes after food, with apparel accounting for about 10% of total retail sales in India,
McKinsey says.
Clothes shopping are a favorite activity for both men and women in India. The Global
Monitor survey finds nearly 70% of consumers "love shopping," while 26% "like" it, and
brand names are important to 77% of respondents.
American labels that have already entered India's retail market include DKNY, Judith Leiber,
Marc by Marc Jacobs and Tommy Hilfiger.
Padma Lakshmi, the Indian-born host of Bravo's Top Chef who also designs her own jewelry
line, says great opportunity exists because Indians have not yet established brand loyalties.
They also have great access to information. "Indian culture has embraced the Internet without
comparison,” Lakshmi says. "They all have satellite TV and Internet, and are aware of music
videos and reality shows. As your access to information increases, so does your desire. And as
your income increases, so does the quality of your goods."
The Global Monitor survey also finds that other than family members (79%) and friends
(74%), the most common source of clothing ideas for Indian consumers comes from television
(51%).
Howard Davidowitz, chairman of retail consultancy and investment banking firm Davidowitz
& Associates. Inc., describes India as "a tremendous possibility.”
"They're younger, they have an advantage with the number of English speakers and they have
a very high education level," he says. On the other hand, India doesn't "have the infrastructure,
and it's hard to do business there because of government bureaucracy. People get bogged
down with that. But once you get there, the possibilities are tremendous."
One barrier to growth has been India's requirement that foreign retailers have a local partner.
But joint ventures can prove profitable: For example, Burberry established a partnership with
Indian retailer Genesis Colors in November 2009 and already has five stores in India's top
cities.
The U.S. Commerce Department reports that for the first four months of 2010, U.S. apparel
and fabric exports to India totaled $22.7 million, a nearly 33% increase over the same, year-
ago period.
Opportunities for increased apparel sales can also be found in the 82% of Indian consumers
who prefer to change outfits for each event, according to Global Monitor data, compared to

44
the 71% of American consumers who say they prefer to wear one comfortable outfit all day,
according to the Cotton Incorporated Lifestyle Monitor™ survey.
Sharma says the Asian countries of China and India have long and distinguished histories in
producing high-quality textiles and apparel made from natural fiber: China in silk goods and
India in cotton.

It should come as no surprise, then, that Global Monitordata reveal 91% of Indian consumers
feel cotton and cotton blends are best suited for current fashions, and 83% say they would pay
more for clothes made of natural fibers such as cotton, as opposed to synthetics like polyester.

McKinsey reports the Indian middle class – households with annual income ranging from
USD $4,200 to USD $21,000 – of 50 million people is expected to swell to 580 million people
by 2025.

"However, over the past two to three decades the luxury fashion markets in both countries
have greatly expanded. With greater prosperity – meaning, greater purchasing power –
growing numbers of Chinese and Indian consumers are buying foreign brand name apparel.
Even though India has had its own high-end apparel industry, consumers in both countries
prefer foreign brand names because they are seen as symbols of success."

45
Source: http://lifestylemonitor.cottoninc.com/LSM-Issue-Fall-2010/India-Expanding Luxury-
Apparel-Market/

What Fiber is suited best for fashion?

Source: http://lifestylemonitor.cottoninc.com/LSM-Issue-Fall-2010/India-Expanding-Luxury-
Apparel-Market/

46
47
POTENTIAL OF THE LUXURY FASHION BRANDS IN INDIA-

Q u ic k T im e ª a n d a
d e c o m p re s s o r
a r e n e e d e d t o s e e t h is p ic t u r e .

Source: www.UnityMarketing/luxurymap.com

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CHAPTER 7

LUXURY FASHION
BRANDING
STRATEGIES

49
FOCUS OF THE CHAPTER: Understanding about what strategy’s can be
implemented in order to boom the Indian luxury fashion market.

1. THE BRAND MUST BE “EXPANSIVE”:

It means it should be full of innovation opportunities for the marketer and in terms of
satisfying the divergent needs of the luxury consumer.

2. THE BRAND MUST BE RELEVANT TO THE CONSUMERS’ NEEDS:

Depending upon the mindset of the luxury class, it is imperative for a brand to satisfy those
needs, whether they be for recognition or functional use etc.

3. THE BRAND MUST MATCH WITH THE CONSUMERS’ VALUES:

A brand that does not concur with the basic values of a consumer’s society has a small chance
of succeeding because luxury items are forms of expression or identification for a luxury
consumer. This makes it difficult for the consumer to adopt the brand in such cases.

4. THE BRAND MUST PERFORM:

Irrespective of which category the brand belongs to, a performance assurance is a must for the
brand if it wishes to be in the evoked set of luxury consumers, considering the price being
paid for luxury.

Conclusion- Based on the inputs given above as well as an understanding of the decision making process of
the luxury consumer, we recommend the following paths for luxury marketers based on what Indian consumers
really desire from their luxury brands, i.e. product brand, dealer/store brand and price/value relationship.

50
 CHAPTER 8

FINAL
SUMMARY
85

51
Indian luxury market to touch US$ 452 million:
A recent luxury trends report from Ledbury Research advises companies to start focusing on
India. They are estimating that the number of families with annual incomes of more than
$230,000 will have more than doubled from 20,000 in 2002 to 53,000 by the end of 2005 and
will grow to 140,000 by 2010. By way of comparison, the UK has 400,000 families at this
income level currently.
Luxury carmakers are pouring in to woo the nouveau riche (Audi, BMW are the most recent
entrants). A recent article in the Christian Science Monitor talks about how the luxury product
makers are trying to tap the lavish spending that occurs around the wedding season by timing
their new product introductions, market promotions etc. An average Indian wedding ($34,000)
costs almost 30% more than the average American wedding ($26,327), with rich Indian
families spending as much as $2 million dollars.

Indian luxury market may boom to US$ 30 billion by 2015:

Luxury is all set for an unprecedented flourish here as the Indian consumer has overcome the
guilt pangs associated for ages with indulgence. The size of the luxury market in India is
estimated at around $3.5 billion, and what’s best, given the right impetus, it could easily
leapfrog to $30-billion by 2015.

Indians are lapping up luxury assets, services and goods with voracious appetite, according to
a comprehensive survey done by AT Kearney for The Economic Times. Indians splurge $2.9
billion on luxury assets (essentially private jets and luxury homes, cars or yachts and art),
spend another $953 million on luxury services and top it by buying luxury goods worth $377
million.

52
 QuickTimeª and a
decompressor
are needed to see this picture.

Source: www.indianluxuryreview-2007,A.T Kerney

53
The starting point for identifying successful luxury brand strategies in India has been
established by identifying certain salient aspects of luxury brands that remain constant as well
as identifying the stage of mindset of the Indian consumer towards these brands.
The focus is now towards ‘how soon’ luxury brands will enter the market to gain a first mover
advantage, which is of significant importance in India. Apart from how soon, we primarily
focus on ‘how will’ luxury brands cater to the mainly aspirational needs of the Indian
consumer.
A word of caution that goes for luxury marketers, irrespective of their brands and
geographical presence – The luxury consumer is always looking for newer ways to satisfy his
continuously changing needs. Hence, the need to keep a close tab through insightful research
is of prime importance.
As far as India is concerned, given the rapidly accelerating affluence of the masses, the
scenario is set to witness a boom. The ones who will be riding the wave will be the ones
who’ve kept their ears open to each and every word of their each and every customer. After
all, in the luxury business, no marketer can afford the luxury of treating its consumers as a
loosely bunched segment.
Through my research I have come to a conclusion that my hypothesis one is justified that
international luxury brands have a strong scope to do really well in India as India is growing at
a speed of light and so soon the personal disposable income will also grow and so people will
buy more and more of the luxury items as we also know that now a days fashion is all about
showing off so India has a great scope.

54
 QUESTIONNAIRE
GROWTH AND POTENTIAL OF
LUXURY BRANDS IN INDIA

Page One
1.) NAME:

____________________________________________

2.) AGE GROUP:

( ) under 18
( ) 18-24
( ) 25-34

55
( ) 35-54
( ) 55+

3.) GENDER:

( ) Male
( ) Female

4.) LOCATION:

____________________________________________

5.) CONTACT NUMBER:

____________________________________________

6.) EMAIL ID:

____________________________________________

7.) EDUCATIONAL QUALIFICATION:

( ) 12th grade or less

( ) Graduated high school or equivalent
( ) Some college, no degree
( ) Associate degree
( ) Bachelor's degree
( ) Post-graduate degree
( ) Phd

8.) OCCUPATION:

56
____________________________________________

9.) ANNUAL INCOME:

( ) Less than 1,00,000

( ) 1,00,000 to 5,00,000
( ) 5,00,000 to 10,00,000
( ) 10,00,000 to 15,00,000
( ) 15,00,000 or more
( ) Not Working

New Page

10.) FASHION FOR YOU IS:

[ ] Its all about confort

[ ] Economic Dressing
[ ] Show off
[ ] Spending heavily

11.) DO YOU WEAR DESIGNER BRANDS?

( ) Yes
( ) No

12.) DESIGNER BRANDS YOU WEAR:

a): _________________________
b): _________________________
c): _________________________

57
d): _________________________
e): _________________________

13.) YOUR FAVORITE LUXURY BRANDS:

a): _________________________
b): _________________________
c): _________________________
d): _________________________
e): _________________________

14.) BRANDS YOU ARE AWARE OF:

[ ] Louis Vuitton
[ ] Versace
[ ] Christian Dior
[ ] Coco Chanel
[ ] Rolex
[ ] Tag-heuer
[ ] Dolce & Gabbana
[ ] Georgio Armani
[ ] Prada
[ ] Gucci

15.) HOW MUCH DO YOU SPEND ON APPARELS AND ACCESSORIES

IN A MONTH:

( ) Less than 3000

( ) 3000-5000
( ) 5000-7000
( ) 7000-10000
( ) Above 10000

58
16.) HOW MUCH DO YOU SPEND FOR ONE SINGLE BRANDED
GARMENT:

[ ] Below 1000
[ ] 1000-1500
[ ] 1500-2000
[ ] 2000-2500
[ ] above 2500

17.) BRAND NAME IS VERY IMPORTANT:

( ) Strongly disagree
( ) Disagree
( ) Neutral
( ) Agree
( ) Strongly agree
( ) Not Applicable

18.) WHAT DOES LUXURY MEAN TO YOU:

19.) ACCORDING TO YOU, WHAT ARE THE MAJOR PROBLEMS

FACED BY THE INDIAN LUXURY MARKET?

20.) ACCORDING TO YOU, WHAT IS THE FUTURE OF LUXURY

FASHION IN INDIA?

21.) HOW MUCH WOULD YOU RATE THIS QUESTIONNAIRE:

()1

59
()2
()3
()4
()5
()6
()7
()8
()9
( ) 10

BIBILIOGRAPHY

BOOKS

1. Okonkwo Uche, “Luxury Fashion Branding- trends, tactics and techniques”, Palgrave
Macmillan Publications

2. Moor Liz, The rise of Brands

60
 3. Chadha Radha, Husband Paul, ‘Cult of luxury fashion brand’, Nicholas Brealy
publications, edition 1, 2006

4. Tungate mark, ‘Fashion Brands’, Kogan page publications, edition 2, 2008

MAGAZINES

1. Vouge
2. Fnl
3. Elle
4. Coffee Table

INTERNET LINKS AND WEBSITES

1. http://www.mid-day.com/lifestyle/2009/jun/190609-Fashion-iTalk-Mumbai-Foreign-
luxury-brand-Priyanka-Chopra-Loreal-Womens-accessories-mens-wear.htm

2. http://www.chillibreeze.com/articles_various/Luxury-retail-in-India-610.asp

3. http://thirdeyesight.in/blog/2010/01/07/international-fashion-brands-in-india-
perspective-2010/

4. http://www.fashionunited.in/news/fashion/indias-luxury-market-poised-for-major-
growth-060420111874

61
5. http://futureinida.wordpress.com/india-at-a-glance/

6. http://www.businessoffashion.com/2010/01/in-india-luxury-brands-need-localised-
strategies.html

7. http://en.wikipedia.org/wiki/Luxury_good

8. www.wikipedia.com

9. www.slideshare.net

10. www.amazon.uk

11. www.ebooks.com

12. www.scribd.com

13. www.docstoc.com

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