Luxury in India

India is not new to luxury. It has a rich tradition of luxury since the times of maharajas (rulers of the princely states). In fact the royalty and their tales influence many of its cultural ideals of luxury. Even today, the palaces of Rajasthan, now converted to heritage hotels like the Udaivilas serve as fine examples of Indian luxury. Most of the religious text such as the Mahabharata are set in the times of prosperity and describe a rather opulent lifestyle.

What’s new to India however, is the market for luxury. In the last two decades, India has been about the mainstream, middle class consumers. All the attention and resources have been focused on understanding the mass market. While India has always had a millionaires club, most of these people have traditionally shopped on their trips aboard or depended on the informal import channel.

With rising affluence levels, the size of the premium segment or the top of the pyramid is becoming significant. As a result, the luxury segment in India is ready to takeoff. According to Swiss wealth manager, Julius Baer, India would more than double the number of HNIs to 403,000 by 2015. The wellness market in India, for instance, is estimated at around $ 2.2 billion and growing at 30 to 35%. Interestingly, when the passenger car segment in India reported a slowdown in the year 2011, brands such as Audi scored a 83% growth over 2010 (Jan – November).

This is the new market for luxury in India. In housing, for instance, this segment has seen several launches by builders like Lodhas and India Bulls in Mumbai and DLF and Unitech in Delhi. Brands such as Audi and BMW in luxury sedans, Jean Claude Beguine in spa salons, and Neutrogena and L’Oreal in personal care are serving this market. On the retail front, three big luxury destinations are already in play: the UB City mall, spread across 125,000 square feet in Bangalore, and the DLF Emporio mall, with 320,000 square feet in Delhi and the Palladium in Mumbai, which is spread across 200,000 square feet of restaurants, up-market brand stores, salons and lounges.

Like most other things in India, its luxury market isn’t an easy one to crack either. As it happened in the early nineties, post the opening up of the Indian markets, several global brands and businesses opened shops in India expecting the Indian consumers to flock to their door steps. Brands realized it the hard way that despite being smitten by everything foreign, the Indian consumer expected them to work their product and pricing according to them rather than the other way round. Of course the luxury consumer is different from the mainstream consumer, she is far more discerning and rather well traveled. While her behavior is different from the mainstream middle class consumers, it’s not free from the Indian idiosyncrasies.

My travel schedules make it imperative that I use the airborne time productively. Parts of this chapter were written on flights from various places to various places. On one such flight from Mumbai to Delhi, I happened to be recording the idiosyncrasies of the Indian luxury consumer. As a coincidence, on my adjacent seat was a luxury clad lady, wearing Jimmy Choo and Burrberry, carrying a coach handback which she refused to put in the overhead compartment. A long conversation followed between the flight attendant who was persuading her to part with the handbag, as you are not allowed to carry anything in your lap during takeoff, for security reasons. The lady was apparently apprehensive about letting go of her precious jewelry that she was carrying in the bag, lest it is lost in the overhead compartment.

The luxury market in India is at the same stage as the Indian consumer market was about 15 years ago. It boasts of a large consumer base that has the disposable income and has demonstrated encouraging rates of growth in several categories. Clearly, the market is poised for a takeoff. However, just as the Indian middle class market came with its own idiosyncrasies, the luxury market in India unravels its own quirks.

The market for luxury in India doesn’t chase the disposable income curve blindly. One of the reasons is that the declared incomes of individuals may not always be their real income. The biggest learning for luxury retailing in India is not to mistake your consumer’s appearance for her propensity to spend. Luxury brands in the country have reported growth from surprising geographies. Many of them are from outside the key metropolitan cities. The stories of Coimbatore being the largest market for Mercedes and Mahindra launching luxury tractors for the rich farmers in Punjab are not new anymore. Depending on their financial appetite and social conditioning, India is witnessing select pockets of luxury emerging. In terms of geography, the rich agricultural belts of the north including parts of Punjab, Haryana and Uttar Pradesh; the trading and industrial belts of Punjab and the Southern India; upcoming small towns such as Pune and Chandigarh; the suburbs of mega metros such as Gurgaon and Noida, which are fed largely by the service industry, are some of the high performing pockets.

In terms of age group as well, there are pockets, which are more amenable to the idea of luxury, possibly owing to the life stage and the mindset. While the mainstream, middle-aged population has a steady contribution to the luxury market, the young in India are turning out to be the unlikely heroes. Many of the young people in India, below the age of 30 years, have high disposable incomes, courtesy their new-age jobs in consulting, investment banking, IT and so on. Some of them also come from wealthy parentage. What makes them a good target for luxury is their outlook towards life and their mindset, which is distinct from the traditional Indians.

Brought up largely in the post-economic-liberalization era, these are the no-strings generation of India. They have lived in the times of plenty and are not burdened by the consumption guilt typical of the traditional Indian mindset. In fact, they are eager to experiment with the new and experience the good life. This is the generation in India, which wants to look good, be rich and have fun, not necessarily in the same order though. However, its critical for this segment that the luxury brands speak in their language. Typical luxury brand speak such as that of heritage, refined taste and status may be too heavy for the generation that wants to live it light. Of course they want to signal their good life and the fact that they are arrived, but they want to look cool in doing so, not staid and old. Luxury for this segment needs to embrace youth values; it needs to be nimble, fun and may be a little quirky.

The other segment that’s a natural target for luxury in India is the people above 45 years. In their mindset, this segment may be at the other extreme of the no-strings generation, but they are not untouched by the dramatic changes that India has seen in the last two decades. The partition generation as they may be called, they have lived most of their early lives in the decades that followed the political Independence of India. They are the ones who have lived a cautious life, building up for a future that may not be so good. But as it happens, the future has actually turned out to be good. For them, the Income is still flowing in and they have a decent wealth created for themselves during the last few decades. Most of them may have kids who are doing well for themselves. Armed with a significant potential to spend and a mindset to explore, the matured segment in India too wants a taste of luxury. Their luxury however, is made up of harder stuff. They are more likely to spend their money on expensive real estate, automobiles and jewellery than on apparel and accessories.

Both, in terms of geography as well as demographics, the market for luxury in India is in pockets. As discussed above, its critical to know where these consumers are coming from, because that determines to a large extent, what they are looking for. While the luxury consumers of small town Punjab will not go beyond the known labels because unknown labels will have no social worth, the younger consumers of metros will continuously seek to experiment and look for a marriage of luxe with cool. At the same time, the mature generation of India will fall for relatively more tangible offerings such as real estate and automobiles. They would also give more benefit to taste and refinement than a twenty eight year old would.

India is currently a huge mass of consumers, constantly upgrading their lifestyle. Malls and multiplexes have brought together people of varied classes who would otherwise never rub shoulders with each other. The need for luxury here is also the need for the well heeled to signal the distance from the mainstream. For instance, the High Street Phoenix in Mumbai, which was once a premium shopping and entertainment destination has now been rendered mainstream by the Palladium, which is geographically adjacent to it. Palladium is the destination in Mumbai that separates the rich from the mainstream with its lineup of brands such as Burberry, Hugo Boss, Canali and others.

The last two decades of sudden economic growth in India has levelled consumers of all types and united them through shared symbols of consumption. Partly owing to new work places and their egalitarian cultures and partly because of the symbols of consumption that could be owned by anyone, the traditional hierarchies of caste and class have broken down considerably in the last few decades in India. McDonalds with its Rs. 20 (less than half a dollar) burger in many ways broke the divide between classes, so did the hypermarket chain Big Bazaar by selling affordable household and grocery items in air-conditioned environments, thereby making it attractive to all.

The next few decades will be about recreating the class differences by upgrading people to lifestyles that mark out their exclusivity. The bulk of the luxury market in India therefore, is in helping signal the distance from the mainstream. This segment is about upgrading people one step at a time from mass premium to the mid-luxury segment market. The big market for luxury in India is therefore between mass premium and ultimate luxury; in bridging the distance between what’s desirable and what’s affordable.

For example, in the luxury car segment, it’s the Rs. 20 lac (around $40,000) segment where BMW plays with its X1 and Audi with its Q3 is doing rather well. This segment is a bridge to the super luxury segment of BMW 5 series or Audi A6. Similarly, real estate projects that promise affordable luxury, selling an upgraded lifestyle with swimming pool, clubhouse and other such amenities are coming up in significant numbers. While these residences may not fulfill the ultimate dreams of the Indian luxury consumer, they are helping him upgrade to the next level of living and more importantly, to mark his transition from everybody to somebody.

Its a long drawn conclusion that products and services catering to the mainstream Indian market need to be customised to the local taste. Many brands like MTV, McDonalds and Suzuki (Maruti) are now case studies in localizing their offerings to the Indian market. Its true that a large number of luxury consumers in India are well traveled and would like the same experience from the brands that they get globally. But its also true that India’s own signature on luxury is emerging, and its rich culture is playing a big role in it.

Culturally, the royal way of living has influenced the Indian idea of luxury. The royalty have had their own style and precedence. Indian designers who have drawn inspiration from this tradition are well positioned on the Indian luxury market. The market for Indian designer wear has always been significant. Indian designers such as Anita Dongre who has six individual brands under her fashion umbrella, including a wellness spa and Ritu Kumar with thirty four outlets in all major cities in India have demonstrated that the idea of Indian luxury has widespread potential.

In many ways, India is rediscovering its own heritage and relishing the quintessential Indian luxury experience. Brands like Neemrana and Oberoi in hotels have restored the traditional forts and havelis (residences of the royalty) into luxurious vacation resorts. This experience of royalty as embodied in these luxury abodes is attractive for the Indians in the same way as the foreign tourists. Similarly, when it comes to jewelry, brands such as Tanishq (a brand of jewelry from Tatas) have preserved and revived traditional Indian design. Some years ago, an advertising campaign by Tanishq, positioned it as ‘tales of tradition’.

As in many other areas such as cuisine, luxury in India would do well to draw an inspiration from the Indian way of life. Whether it’s the sarees by Hermes, or the bandhgala by Canali, there is a lot in the rich tradition of India to fuel some trends in luxury. The emergence of India’s signature in its pursuit of luxury is an encouraging pattern, especially in the context where the market is still warming up to the idea of luxury consumption. Local and traditional motifs will play an increasingly larger role in expanding the idea of luxury. India may want its luxury products and services to confirm to the International class, albeit in an Indian way.

India is in a stage of rediscovering the idea of luxury. In this process, its inspired by its tradition and filled with its own idiosyncrasies. Even though most ideas of luxury have universal global appeal, brands and businesses would do well to understand the details of the Indian mindset and the market. The Indian luxury market, which is growing in pockets, needs to be understood for its specific motivations. We also need to be aware that the larger need in India right now is for signaling the distance. The big market here is in providing the bridge from the mainstream to the exclusive.

(This is a Chapter from ‘The Luxury Market in India: Maharajas to Masses’ published by Palgrave Macmillan)

India is not new to luxury. It has a rich tradition of luxury since the times of maharajas (rulers of the princely states). In fact the royalty and their tales influence many of its cultural ideals of luxury. Even today, the palaces of Rajasthan, now converted to heritage hotels like the Udaivilas serve as fine examples of Indian luxury. Most of the religious text such as the Mahabharata are set in the times of prosperity and describe a rather opulent lifestyle.

What’s new to India however, is the market for luxury. In the last two decades, India has been about the mainstream, middle class consumers. All the attention and resources have been focused on understanding the mass market. While India has always had a millionaires club, most of these people have traditionally shopped on their trips aboard or depended on the informal import channel.

With rising affluence levels, the size of the premium segment or the top of the pyramid is becoming significant. As a result, the luxury segment in India is ready to takeoff. According to Swiss wealth manager, Julius Baer, India would more than double the number of HNIs to 403,000 by 2015. The wellness market in India, for instance, is estimated at around $ 2.2 billion and growing at 30 to 35%. Interestingly, when the passenger car segment in India reported a slowdown in the year 2011, brands such as Audi scored a 83% growth over 2010 (Jan – November).

This is the new market for luxury in India. In housing, for instance, this segment has seen several launches by builders like Lodhas and India Bulls in Mumbai and DLF and Unitech in Delhi. Brands such as Audi and BMW in luxury sedans, Jean Claude Beguine in spa salons, and Neutrogena and L’Oreal in personal care are serving this market. On the retail front, three big luxury destinations are already in play: the UB City mall, spread across 125,000 square feet in Bangalore, and the DLF Emporio mall, with 320,000 square feet in Delhi and the Palladium in Mumbai, which is spread across 200,000 square feet of restaurants, up-market brand stores, salons and lounges.

Like most other things in India, its luxury market isn’t an easy one to crack either. As it happened in the early nineties, post the opening up of the Indian markets, several global brands and businesses opened shops in India expecting the Indian consumers to flock to their door steps. Brands realized it the hard way that despite being smitten by everything foreign, the Indian consumer expected them to work their product and pricing according to them rather than the other way round. Of course the luxury consumer is different from the mainstream consumer, she is far more discerning and rather well traveled. While her behavior is different from the mainstream middle class consumers, it’s not free from the Indian idiosyncrasies.

My travel schedules make it imperative that I use the airborne time productively. Parts of this chapter were written on flights from various places to various places. On one such flight from Mumbai to Delhi, I happened to be recording the idiosyncrasies of the Indian luxury consumer. As a coincidence, on my adjacent seat was a luxury clad lady, wearing Jimmy Choo and Burrberry, carrying a coach handback which she refused to put in the overhead compartment. A long conversation followed between the flight attendant who was persuading her to part with the handbag, as you are not allowed to carry anything in your lap during takeoff, for security reasons. The lady was apparently apprehensive about letting go of her precious jewelry that she was carrying in the bag, lest it is lost in the overhead compartment.

The luxury market in India is at the same stage as the Indian consumer market was about 15 years ago. It boasts of a large consumer base that has the disposable income and has demonstrated encouraging rates of growth in several categories. Clearly, the market is poised for a takeoff. However, just as the Indian middle class market came with its own idiosyncrasies, the luxury market in India unravels its own quirks.

The market for luxury in India doesn’t chase the disposable income curve blindly. One of the reasons is that the declared incomes of individuals may not always be their real income. The biggest learning for luxury retailing in India is not to mistake your consumer’s appearance for her propensity to spend. Luxury brands in the country have reported growth from surprising geographies. Many of them are from outside the key metropolitan cities. The stories of Coimbatore being the largest market for Mercedes and Mahindra launching luxury tractors for the rich farmers in Punjab are not new anymore. Depending on their financial appetite and social conditioning, India is witnessing select pockets of luxury emerging. In terms of geography, the rich agricultural belts of the north including parts of Punjab, Haryana and Uttar Pradesh; the trading and industrial belts of Punjab and the Southern India; upcoming small towns such as Pune and Chandigarh; the suburbs of mega metros such as Gurgaon and Noida, which are fed largely by the service industry, are some of the high performing pockets.

In terms of age group as well, there are pockets, which are more amenable to the idea of luxury, possibly owing to the life stage and the mindset. While the mainstream, middle-aged population has a steady contribution to the luxury market, the young in India are turning out to be the unlikely heroes. Many of the young people in India, below the age of 30 years, have high disposable incomes, courtesy their new-age jobs in consulting, investment banking, IT and so on. Some of them also come from wealthy parentage. What makes them a good target for luxury is their outlook towards life and their mindset, which is distinct from the traditional Indians.

Brought up largely in the post-economic-liberalization era, these are the no-strings generation of India. They have lived in the times of plenty and are not burdened by the consumption guilt typical of the traditional Indian mindset. In fact, they are eager to experiment with the new and experience the good life. This is the generation in India, which wants to look good, be rich and have fun, not necessarily in the same order though. However, its critical for this segment that the luxury brands speak in their language. Typical luxury brand speak such as that of heritage, refined taste and status may be too heavy for the generation that wants to live it light. Of course they want to signal their good life and the fact that they are arrived, but they want to look cool in doing so, not staid and old. Luxury for this segment needs to embrace youth values; it needs to be nimble, fun and may be a little quirky.

The other segment that’s a natural target for luxury in India is the people above 45 years. In their mindset, this segment may be at the other extreme of the no-strings generation, but they are not untouched by the dramatic changes that India has seen in the last two decades. The partition generation as they may be called, they have lived most of their early lives in the decades that followed the political Independence of India. They are the ones who have lived a cautious life, building up for a future that may not be so good. But as it happens, the future has actually turned out to be good. For them, the Income is still flowing in and they have a decent wealth created for themselves during the last few decades. Most of them may have kids who are doing well for themselves. Armed with a significant potential to spend and a mindset to explore, the matured segment in India too wants a taste of luxury. Their luxury however, is made up of harder stuff. They are more likely to spend their money on expensive real estate, automobiles and jewellery than on apparel and accessories.

Both, in terms of geography as well as demographics, the market for luxury in India is in pockets. As discussed above, its critical to know where these consumers are coming from, because that determines to a large extent, what they are looking for. While the luxury consumers of small town Punjab will not go beyond the known labels because unknown labels will have no social worth, the younger consumers of metros will continuously seek to experiment and look for a marriage of luxe with cool. At the same time, the mature generation of India will fall for relatively more tangible offerings such as real estate and automobiles. They would also give more benefit to taste and refinement than a twenty eight year old would.

India is currently a huge mass of consumers, constantly upgrading their lifestyle. Malls and multiplexes have brought together people of varied classes who would otherwise never rub shoulders with each other. The need for luxury here is also the need for the well heeled to signal the distance from the mainstream. For instance, the High Street Phoenix in Mumbai, which was once a premium shopping and entertainment destination has now been rendered mainstream by the Palladium, which is geographically adjacent to it. Palladium is the destination in Mumbai that separates the rich from the mainstream with its lineup of brands such as Burberry, Hugo Boss, Canali and others.

The last two decades of sudden economic growth in India has levelled consumers of all types and united them through shared symbols of consumption. Partly owing to new work places and their egalitarian cultures and partly because of the symbols of consumption that could be owned by anyone, the traditional hierarchies of caste and class have broken down considerably in the last few decades in India. McDonalds with its Rs. 20 (less than half a dollar) burger in many ways broke the divide between classes, so did the hypermarket chain Big Bazaar by selling affordable household and grocery items in air-conditioned environments, thereby making it attractive to all.

The next few decades will be about recreating the class differences by upgrading people to lifestyles that mark out their exclusivity. The bulk of the luxury market in India therefore, is in helping signal the distance from the mainstream. This segment is about upgrading people one step at a time from mass premium to the mid-luxury segment market. The big market for luxury in India is therefore between mass premium and ultimate luxury; in bridging the distance between what’s desirable and what’s affordable.

For example, in the luxury car segment, it’s the Rs. 20 lac (around $40,000) segment where BMW plays with its X1 and Audi with its Q3 is doing rather well. This segment is a bridge to the super luxury segment of BMW 5 series or Audi A6. Similarly, real estate projects that promise affordable luxury, selling an upgraded lifestyle with swimming pool, clubhouse and other such amenities are coming up in significant numbers. While these residences may not fulfill the ultimate dreams of the Indian luxury consumer, they are helping him upgrade to the next level of living and more importantly, to mark his transition from everybody to somebody.

Its a long drawn conclusion that products and services catering to the mainstream Indian market need to be customised to the local taste. Many brands like MTV, McDonalds and Suzuki (Maruti) are now case studies in localizing their offerings to the Indian market. Its true that a large number of luxury consumers in India are well traveled and would like the same experience from the brands that they get globally. But its also true that India’s own signature on luxury is emerging, and its rich culture is playing a big role in it.

Culturally, the royal way of living has influenced the Indian idea of luxury. The royalty have had their own style and precedence. Indian designers who have drawn inspiration from this tradition are well positioned on the Indian luxury market. The market for Indian designer wear has always been significant. Indian designers such as Anita Dongre who has six individual brands under her fashion umbrella, including a wellness spa and Ritu Kumar with thirty four outlets in all major cities in India have demonstrated that the idea of Indian luxury has widespread potential.

In many ways, India is rediscovering its own heritage and relishing the quintessential Indian luxury experience. Brands like Neemrana and Oberoi in hotels have restored the traditional forts and havelis (residences of the royalty) into luxurious vacation resorts. This experience of royalty as embodied in these luxury abodes is attractive for the Indians in the same way as the foreign tourists. Similarly, when it comes to jewelry, brands such as Tanishq (a brand of jewelry from Tatas) have preserved and revived traditional Indian design. Some years ago, an advertising campaign by Tanishq, positioned it as ‘tales of tradition’.

As in many other areas such as cuisine, luxury in India would do well to draw an inspiration from the Indian way of life. Whether it’s the sarees by Hermes, or the bandhgala by Canali, there is a lot in the rich tradition of India to fuel some trends in luxury. The emergence of India’s signature in its pursuit of luxury is an encouraging pattern, especially in the context where the market is still warming up to the idea of luxury consumption. Local and traditional motifs will play an increasingly larger role in expanding the idea of luxury. India may want its luxury products and services to confirm to the International class, albeit in an Indian way.

India is in a stage of rediscovering the idea of luxury. In this process, its inspired by its tradition and filled with its own idiosyncrasies. Even though most ideas of luxury have universal global appeal, brands and businesses would do well to understand the details of the Indian mindset and the market. The Indian luxury market, which is growing in pockets, needs to be understood for its specific motivations. We also need to be aware that the larger need in India right now is for signaling the distance. The big market here is in providing the bridge from the mainstream to the exclusive.

(This is a Chapter from ‘The Luxury Market in India: Maharajas to Masses’ published by Palgrave Macmillan)

India is not new to luxury. It has a rich tradition of luxury since the times of maharajas (rulers of the princely states). In fact the royalty and their tales influence many of its cultural ideals of luxury. Even today, the palaces of Rajasthan, now converted to heritage hotels like the Udaivilas serve as fine examples of Indian luxury. Most of the religious text such as the Mahabharata are set in the times of prosperity and describe a rather opulent lifestyle.

What’s new to India however, is the market for luxury. In the last two decades, India has been about the mainstream, middle class consumers. All the attention and resources have been focused on understanding the mass market. While India has always had a millionaires club, most of these people have traditionally shopped on their trips aboard or depended on the informal import channel.

With rising affluence levels, the size of the premium segment or the top of the pyramid is becoming significant. As a result, the luxury segment in India is ready to takeoff. According to Swiss wealth manager, Julius Baer, India would more than double the number of HNIs to 403,000 by 2015. The wellness market in India, for instance, is estimated at around $ 2.2 billion and growing at 30 to 35%. Interestingly, when the passenger car segment in India reported a slowdown in the year 2011, brands such as Audi scored a 83% growth over 2010 (Jan – November).

This is the new market for luxury in India. In housing, for instance, this segment has seen several launches by builders like Lodhas and India Bulls in Mumbai and DLF and Unitech in Delhi. Brands such as Audi and BMW in luxury sedans, Jean Claude Beguine in spa salons, and Neutrogena and L’Oreal in personal care are serving this market. On the retail front, three big luxury destinations are already in play: the UB City mall, spread across 125,000 square feet in Bangalore, and the DLF Emporio mall, with 320,000 square feet in Delhi and the Palladium in Mumbai, which is spread across 200,000 square feet of restaurants, up-market brand stores, salons and lounges.

Like most other things in India, its luxury market isn’t an easy one to crack either. As it happened in the early nineties, post the opening up of the Indian markets, several global brands and businesses opened shops in India expecting the Indian consumers to flock to their door steps. Brands realized it the hard way that despite being smitten by everything foreign, the Indian consumer expected them to work their product and pricing according to them rather than the other way round. Of course the luxury consumer is different from the mainstream consumer, she is far more discerning and rather well traveled. While her behavior is different from the mainstream middle class consumers, it’s not free from the Indian idiosyncrasies.

My travel schedules make it imperative that I use the airborne time productively. Parts of this chapter were written on flights from various places to various places. On one such flight from Mumbai to Delhi, I happened to be recording the idiosyncrasies of the Indian luxury consumer. As a coincidence, on my adjacent seat was a luxury clad lady, wearing Jimmy Choo and Burrberry, carrying a coach handback which she refused to put in the overhead compartment. A long conversation followed between the flight attendant who was persuading her to part with the handbag, as you are not allowed to carry anything in your lap during takeoff, for security reasons. The lady was apparently apprehensive about letting go of her precious jewelry that she was carrying in the bag, lest it is lost in the overhead compartment.

The luxury market in India is at the same stage as the Indian consumer market was about 15 years ago. It boasts of a large consumer base that has the disposable income and has demonstrated encouraging rates of growth in several categories. Clearly, the market is poised for a takeoff. However, just as the Indian middle class market came with its own idiosyncrasies, the luxury market in India unravels its own quirks.

The market for luxury in India doesn’t chase the disposable income curve blindly. One of the reasons is that the declared incomes of individuals may not always be their real income. The biggest learning for luxury retailing in India is not to mistake your consumer’s appearance for her propensity to spend. Luxury brands in the country have reported growth from surprising geographies. Many of them are from outside the key metropolitan cities. The stories of Coimbatore being the largest market for Mercedes and Mahindra launching luxury tractors for the rich farmers in Punjab are not new anymore. Depending on their financial appetite and social conditioning, India is witnessing select pockets of luxury emerging. In terms of geography, the rich agricultural belts of the north including parts of Punjab, Haryana and Uttar Pradesh; the trading and industrial belts of Punjab and the Southern India; upcoming small towns such as Pune and Chandigarh; the suburbs of mega metros such as Gurgaon and Noida, which are fed largely by the service industry, are some of the high performing pockets.

In terms of age group as well, there are pockets, which are more amenable to the idea of luxury, possibly owing to the life stage and the mindset. While the mainstream, middle-aged population has a steady contribution to the luxury market, the young in India are turning out to be the unlikely heroes. Many of the young people in India, below the age of 30 years, have high disposable incomes, courtesy their new-age jobs in consulting, investment banking, IT and so on. Some of them also come from wealthy parentage. What makes them a good target for luxury is their outlook towards life and their mindset, which is distinct from the traditional Indians.

Brought up largely in the post-economic-liberalization era, these are the no-strings generation of India. They have lived in the times of plenty and are not burdened by the consumption guilt typical of the traditional Indian mindset. In fact, they are eager to experiment with the new and experience the good life. This is the generation in India, which wants to look good, be rich and have fun, not necessarily in the same order though. However, its critical for this segment that the luxury brands speak in their language. Typical luxury brand speak such as that of heritage, refined taste and status may be too heavy for the generation that wants to live it light. Of course they want to signal their good life and the fact that they are arrived, but they want to look cool in doing so, not staid and old. Luxury for this segment needs to embrace youth values; it needs to be nimble, fun and may be a little quirky.

The other segment that’s a natural target for luxury in India is the people above 45 years. In their mindset, this segment may be at the other extreme of the no-strings generation, but they are not untouched by the dramatic changes that India has seen in the last two decades. The partition generation as they may be called, they have lived most of their early lives in the decades that followed the political Independence of India. They are the ones who have lived a cautious life, building up for a future that may not be so good. But as it happens, the future has actually turned out to be good. For them, the Income is still flowing in and they have a decent wealth created for themselves during the last few decades. Most of them may have kids who are doing well for themselves. Armed with a significant potential to spend and a mindset to explore, the matured segment in India too wants a taste of luxury. Their luxury however, is made up of harder stuff. They are more likely to spend their money on expensive real estate, automobiles and jewellery than on apparel and accessories.

Both, in terms of geography as well as demographics, the market for luxury in India is in pockets. As discussed above, its critical to know where these consumers are coming from, because that determines to a large extent, what they are looking for. While the luxury consumers of small town Punjab will not go beyond the known labels because unknown labels will have no social worth, the younger consumers of metros will continuously seek to experiment and look for a marriage of luxe with cool. At the same time, the mature generation of India will fall for relatively more tangible offerings such as real estate and automobiles. They would also give more benefit to taste and refinement than a twenty eight year old would.

India is currently a huge mass of consumers, constantly upgrading their lifestyle. Malls and multiplexes have brought together people of varied classes who would otherwise never rub shoulders with each other. The need for luxury here is also the need for the well heeled to signal the distance from the mainstream. For instance, the High Street Phoenix in Mumbai, which was once a premium shopping and entertainment destination has now been rendered mainstream by the Palladium, which is geographically adjacent to it. Palladium is the destination in Mumbai that separates the rich from the mainstream with its lineup of brands such as Burberry, Hugo Boss, Canali and others.

The last two decades of sudden economic growth in India has levelled consumers of all types and united them through shared symbols of consumption. Partly owing to new work places and their egalitarian cultures and partly because of the symbols of consumption that could be owned by anyone, the traditional hierarchies of caste and class have broken down considerably in the last few decades in India. McDonalds with its Rs. 20 (less than half a dollar) burger in many ways broke the divide between classes, so did the hypermarket chain Big Bazaar by selling affordable household and grocery items in air-conditioned environments, thereby making it attractive to all.

The next few decades will be about recreating the class differences by upgrading people to lifestyles that mark out their exclusivity. The bulk of the luxury market in India therefore, is in helping signal the distance from the mainstream. This segment is about upgrading people one step at a time from mass premium to the mid-luxury segment market. The big market for luxury in India is therefore between mass premium and ultimate luxury; in bridging the distance between what’s desirable and what’s affordable.

For example, in the luxury car segment, it’s the Rs. 20 lac (around $40,000) segment where BMW plays with its X1 and Audi with its Q3 is doing rather well. This segment is a bridge to the super luxury segment of BMW 5 series or Audi A6. Similarly, real estate projects that promise affordable luxury, selling an upgraded lifestyle with swimming pool, clubhouse and other such amenities are coming up in significant numbers. While these residences may not fulfill the ultimate dreams of the Indian luxury consumer, they are helping him upgrade to the next level of living and more importantly, to mark his transition from everybody to somebody.

Its a long drawn conclusion that products and services catering to the mainstream Indian market need to be customised to the local taste. Many brands like MTV, McDonalds and Suzuki (Maruti) are now case studies in localizing their offerings to the Indian market. Its true that a large number of luxury consumers in India are well traveled and would like the same experience from the brands that they get globally. But its also true that India’s own signature on luxury is emerging, and its rich culture is playing a big role in it.

Culturally, the royal way of living has influenced the Indian idea of luxury. The royalty have had their own style and precedence. Indian designers who have drawn inspiration from this tradition are well positioned on the Indian luxury market. The market for Indian designer wear has always been significant. Indian designers such as Anita Dongre who has six individual brands under her fashion umbrella, including a wellness spa and Ritu Kumar with thirty four outlets in all major cities in India have demonstrated that the idea of Indian luxury has widespread potential.

In many ways, India is rediscovering its own heritage and relishing the quintessential Indian luxury experience. Brands like Neemrana and Oberoi in hotels have restored the traditional forts and havelis (residences of the royalty) into luxurious vacation resorts. This experience of royalty as embodied in these luxury abodes is attractive for the Indians in the same way as the foreign tourists. Similarly, when it comes to jewelry, brands such as Tanishq (a brand of jewelry from Tatas) have preserved and revived traditional Indian design. Some years ago, an advertising campaign by Tanishq, positioned it as ‘tales of tradition’.

As in many other areas such as cuisine, luxury in India would do well to draw an inspiration from the Indian way of life. Whether it’s the sarees by Hermes, or the bandhgala by Canali, there is a lot in the rich tradition of India to fuel some trends in luxury. The emergence of India’s signature in its pursuit of luxury is an encouraging pattern, especially in the context where the market is still warming up to the idea of luxury consumption. Local and traditional motifs will play an increasingly larger role in expanding the idea of luxury. India may want its luxury products and services to confirm to the International class, albeit in an Indian way.

India is in a stage of rediscovering the idea of luxury. In this process, its inspired by its tradition and filled with its own idiosyncrasies. Even though most ideas of luxury have universal global appeal, brands and businesses would do well to understand the details of the Indian mindset and the market. The Indian luxury market, which is growing in pockets, needs to be understood for its specific motivations. We also need to be aware that the larger need in India right now is for signaling the distance. The big market here is in providing the bridge from the mainstream to the exclusive.

(This is a Chapter from ‘The Luxury Market in India: Maharajas to Masses’ published by Palgrave Macmillan)

India is not new to luxury. It has a rich tradition of luxury since the times of maharajas (rulers of the princely states). In fact the royalty and their tales influence many of its cultural ideals of luxury. Even today, the palaces of Rajasthan, now converted to heritage hotels like the Udaivilas serve as fine examples of Indian luxury. Most of the religious text such as the Mahabharata are set in the times of prosperity and describe a rather opulent lifestyle.

What’s new to India however, is the market for luxury. In the last two decades, India has been about the mainstream, middle class consumers. All the attention and resources have been focused on understanding the mass market. While India has always had a millionaires club, most of these people have traditionally shopped on their trips aboard or depended on the informal import channel.

With rising affluence levels, the size of the premium segment or the top of the pyramid is becoming significant. As a result, the luxury segment in India is ready to takeoff. According to Swiss wealth manager, Julius Baer, India would more than double the number of HNIs to 403,000 by 2015. The wellness market in India, for instance, is estimated at around $ 2.2 billion and growing at 30 to 35%. Interestingly, when the passenger car segment in India reported a slowdown in the year 2011, brands such as Audi scored a 83% growth over 2010 (Jan – November).

This is the new market for luxury in India. In housing, for instance, this segment has seen several launches by builders like Lodhas and India Bulls in Mumbai and DLF and Unitech in Delhi. Brands such as Audi and BMW in luxury sedans, Jean Claude Beguine in spa salons, and Neutrogena and L’Oreal in personal care are serving this market. On the retail front, three big luxury destinations are already in play: the UB City mall, spread across 125,000 square feet in Bangalore, and the DLF Emporio mall, with 320,000 square feet in Delhi and the Palladium in Mumbai, which is spread across 200,000 square feet of restaurants, up-market brand stores, salons and lounges.

Like most other things in India, its luxury market isn’t an easy one to crack either. As it happened in the early nineties, post the opening up of the Indian markets, several global brands and businesses opened shops in India expecting the Indian consumers to flock to their door steps. Brands realized it the hard way that despite being smitten by everything foreign, the Indian consumer expected them to work their product and pricing according to them rather than the other way round. Of course the luxury consumer is different from the mainstream consumer, she is far more discerning and rather well traveled. While her behavior is different from the mainstream middle class consumers, it’s not free from the Indian idiosyncrasies.

My travel schedules make it imperative that I use the airborne time productively. Parts of this chapter were written on flights from various places to various places. On one such flight from Mumbai to Delhi, I happened to be recording the idiosyncrasies of the Indian luxury consumer. As a coincidence, on my adjacent seat was a luxury clad lady, wearing Jimmy Choo and Burrberry, carrying a coach handback which she refused to put in the overhead compartment. A long conversation followed between the flight attendant who was persuading her to part with the handbag, as you are not allowed to carry anything in your lap during takeoff, for security reasons. The lady was apparently apprehensive about letting go of her precious jewelry that she was carrying in the bag, lest it is lost in the overhead compartment.

The luxury market in India is at the same stage as the Indian consumer market was about 15 years ago. It boasts of a large consumer base that has the disposable income and has demonstrated encouraging rates of growth in several categories. Clearly, the market is poised for a takeoff. However, just as the Indian middle class market came with its own idiosyncrasies, the luxury market in India unravels its own quirks.

The market for luxury in India doesn’t chase the disposable income curve blindly. One of the reasons is that the declared incomes of individuals may not always be their real income. The biggest learning for luxury retailing in India is not to mistake your consumer’s appearance for her propensity to spend. Luxury brands in the country have reported growth from surprising geographies. Many of them are from outside the key metropolitan cities. The stories of Coimbatore being the largest market for Mercedes and Mahindra launching luxury tractors for the rich farmers in Punjab are not new anymore. Depending on their financial appetite and social conditioning, India is witnessing select pockets of luxury emerging. In terms of geography, the rich agricultural belts of the north including parts of Punjab, Haryana and Uttar Pradesh; the trading and industrial belts of Punjab and the Southern India; upcoming small towns such as Pune and Chandigarh; the suburbs of mega metros such as Gurgaon and Noida, which are fed largely by the service industry, are some of the high performing pockets.

In terms of age group as well, there are pockets, which are more amenable to the idea of luxury, possibly owing to the life stage and the mindset. While the mainstream, middle-aged population has a steady contribution to the luxury market, the young in India are turning out to be the unlikely heroes. Many of the young people in India, below the age of 30 years, have high disposable incomes, courtesy their new-age jobs in consulting, investment banking, IT and so on. Some of them also come from wealthy parentage. What makes them a good target for luxury is their outlook towards life and their mindset, which is distinct from the traditional Indians.

Brought up largely in the post-economic-liberalization era, these are the no-strings generation of India. They have lived in the times of plenty and are not burdened by the consumption guilt typical of the traditional Indian mindset. In fact, they are eager to experiment with the new and experience the good life. This is the generation in India, which wants to look good, be rich and have fun, not necessarily in the same order though. However, its critical for this segment that the luxury brands speak in their language. Typical luxury brand speak such as that of heritage, refined taste and status may be too heavy for the generation that wants to live it light. Of course they want to signal their good life and the fact that they are arrived, but they want to look cool in doing so, not staid and old. Luxury for this segment needs to embrace youth values; it needs to be nimble, fun and may be a little quirky.

The other segment that’s a natural target for luxury in India is the people above 45 years. In their mindset, this segment may be at the other extreme of the no-strings generation, but they are not untouched by the dramatic changes that India has seen in the last two decades. The partition generation as they may be called, they have lived most of their early lives in the decades that followed the political Independence of India. They are the ones who have lived a cautious life, building up for a future that may not be so good. But as it happens, the future has actually turned out to be good. For them, the Income is still flowing in and they have a decent wealth created for themselves during the last few decades. Most of them may have kids who are doing well for themselves. Armed with a significant potential to spend and a mindset to explore, the matured segment in India too wants a taste of luxury. Their luxury however, is made up of harder stuff. They are more likely to spend their money on expensive real estate, automobiles and jewellery than on apparel and accessories.

Both, in terms of geography as well as demographics, the market for luxury in India is in pockets. As discussed above, its critical to know where these consumers are coming from, because that determines to a large extent, what they are looking for. While the luxury consumers of small town Punjab will not go beyond the known labels because unknown labels will have no social worth, the younger consumers of metros will continuously seek to experiment and look for a marriage of luxe with cool. At the same time, the mature generation of India will fall for relatively more tangible offerings such as real estate and automobiles. They would also give more benefit to taste and refinement than a twenty eight year old would.

India is currently a huge mass of consumers, constantly upgrading their lifestyle. Malls and multiplexes have brought together people of varied classes who would otherwise never rub shoulders with each other. The need for luxury here is also the need for the well heeled to signal the distance from the mainstream. For instance, the High Street Phoenix in Mumbai, which was once a premium shopping and entertainment destination has now been rendered mainstream by the Palladium, which is geographically adjacent to it. Palladium is the destination in Mumbai that separates the rich from the mainstream with its lineup of brands such as Burberry, Hugo Boss, Canali and others.

The last two decades of sudden economic growth in India has levelled consumers of all types and united them through shared symbols of consumption. Partly owing to new work places and their egalitarian cultures and partly because of the symbols of consumption that could be owned by anyone, the traditional hierarchies of caste and class have broken down considerably in the last few decades in India. McDonalds with its Rs. 20 (less than half a dollar) burger in many ways broke the divide between classes, so did the hypermarket chain Big Bazaar by selling affordable household and grocery items in air-conditioned environments, thereby making it attractive to all.

The next few decades will be about recreating the class differences by upgrading people to lifestyles that mark out their exclusivity. The bulk of the luxury market in India therefore, is in helping signal the distance from the mainstream. This segment is about upgrading people one step at a time from mass premium to the mid-luxury segment market. The big market for luxury in India is therefore between mass premium and ultimate luxury; in bridging the distance between what’s desirable and what’s affordable.

For example, in the luxury car segment, it’s the Rs. 20 lac (around $40,000) segment where BMW plays with its X1 and Audi with its Q3 is doing rather well. This segment is a bridge to the super luxury segment of BMW 5 series or Audi A6. Similarly, real estate projects that promise affordable luxury, selling an upgraded lifestyle with swimming pool, clubhouse and other such amenities are coming up in significant numbers. While these residences may not fulfill the ultimate dreams of the Indian luxury consumer, they are helping him upgrade to the next level of living and more importantly, to mark his transition from everybody to somebody.

Its a long drawn conclusion that products and services catering to the mainstream Indian market need to be customised to the local taste. Many brands like MTV, McDonalds and Suzuki (Maruti) are now case studies in localizing their offerings to the Indian market. Its true that a large number of luxury consumers in India are well traveled and would like the same experience from the brands that they get globally. But its also true that India’s own signature on luxury is emerging, and its rich culture is playing a big role in it.

Culturally, the royal way of living has influenced the Indian idea of luxury. The royalty have had their own style and precedence. Indian designers who have drawn inspiration from this tradition are well positioned on the Indian luxury market. The market for Indian designer wear has always been significant. Indian designers such as Anita Dongre who has six individual brands under her fashion umbrella, including a wellness spa and Ritu Kumar with thirty four outlets in all major cities in India have demonstrated that the idea of Indian luxury has widespread potential.

In many ways, India is rediscovering its own heritage and relishing the quintessential Indian luxury experience. Brands like Neemrana and Oberoi in hotels have restored the traditional forts and havelis (residences of the royalty) into luxurious vacation resorts. This experience of royalty as embodied in these luxury abodes is attractive for the Indians in the same way as the foreign tourists. Similarly, when it comes to jewelry, brands such as Tanishq (a brand of jewelry from Tatas) have preserved and revived traditional Indian design. Some years ago, an advertising campaign by Tanishq, positioned it as ‘tales of tradition’.

As in many other areas such as cuisine, luxury in India would do well to draw an inspiration from the Indian way of life. Whether it’s the sarees by Hermes, or the bandhgala by Canali, there is a lot in the rich tradition of India to fuel some trends in luxury. The emergence of India’s signature in its pursuit of luxury is an encouraging pattern, especially in the context where the market is still warming up to the idea of luxury consumption. Local and traditional motifs will play an increasingly larger role in expanding the idea of luxury. India may want its luxury products and services to confirm to the International class, albeit in an Indian way.

India is in a stage of rediscovering the idea of luxury. In this process, its inspired by its tradition and filled with its own idiosyncrasies. Even though most ideas of luxury have universal global appeal, brands and businesses would do well to understand the details of the Indian mindset and the market. The Indian luxury market, which is growing in pockets, needs to be understood for its specific motivations. We also need to be aware that the larger need in India right now is for signaling the distance. The big market here is in providing the bridge from the mainstream to the exclusive.

(This is a Chapter from ‘The Luxury Market in India: Maharajas to Masses’ published by Palgrave Macmillan)

India is not new to luxury. It has a rich tradition of luxury since the times of maharajas (rulers of the princely states). In fact the royalty and their tales influence many of its cultural ideals of luxury. Even today, the palaces of Rajasthan, now converted to heritage hotels like the Udaivilas serve as fine examples of Indian luxury. Most of the religious text such as the Mahabharata are set in the times of prosperity and describe a rather opulent lifestyle.

What’s new to India however, is the market for luxury. In the last two decades, India has been about the mainstream, middle class consumers. All the attention and resources have been focused on understanding the mass market. While India has always had a millionaires club, most of these people have traditionally shopped on their trips aboard or depended on the informal import channel.

With rising affluence levels, the size of the premium segment or the top of the pyramid is becoming significant. As a result, the luxury segment in India is ready to takeoff. According to Swiss wealth manager, Julius Baer, India would more than double the number of HNIs to 403,000 by 2015. The wellness market in India, for instance, is estimated at around $ 2.2 billion and growing at 30 to 35%. Interestingly, when the passenger car segment in India reported a slowdown in the year 2011, brands such as Audi scored a 83% growth over 2010 (Jan – November).

This is the new market for luxury in India. In housing, for instance, this segment has seen several launches by builders like Lodhas and India Bulls in Mumbai and DLF and Unitech in Delhi. Brands such as Audi and BMW in luxury sedans, Jean Claude Beguine in spa salons, and Neutrogena and L’Oreal in personal care are serving this market. On the retail front, three big luxury destinations are already in play: the UB City mall, spread across 125,000 square feet in Bangalore, and the DLF Emporio mall, with 320,000 square feet in Delhi and the Palladium in Mumbai, which is spread across 200,000 square feet of restaurants, up-market brand stores, salons and lounges.

Like most other things in India, its luxury market isn’t an easy one to crack either. As it happened in the early nineties, post the opening up of the Indian markets, several global brands and businesses opened shops in India expecting the Indian consumers to flock to their door steps. Brands realized it the hard way that despite being smitten by everything foreign, the Indian consumer expected them to work their product and pricing according to them rather than the other way round. Of course the luxury consumer is different from the mainstream consumer, she is far more discerning and rather well traveled. While her behavior is different from the mainstream middle class consumers, it’s not free from the Indian idiosyncrasies.

My travel schedules make it imperative that I use the airborne time productively. Parts of this chapter were written on flights from various places to various places. On one such flight from Mumbai to Delhi, I happened to be recording the idiosyncrasies of the Indian luxury consumer. As a coincidence, on my adjacent seat was a luxury clad lady, wearing Jimmy Choo and Burrberry, carrying a coach handback which she refused to put in the overhead compartment. A long conversation followed between the flight attendant who was persuading her to part with the handbag, as you are not allowed to carry anything in your lap during takeoff, for security reasons. The lady was apparently apprehensive about letting go of her precious jewelry that she was carrying in the bag, lest it is lost in the overhead compartment.

The luxury market in India is at the same stage as the Indian consumer market was about 15 years ago. It boasts of a large consumer base that has the disposable income and has demonstrated encouraging rates of growth in several categories. Clearly, the market is poised for a takeoff. However, just as the Indian middle class market came with its own idiosyncrasies, the luxury market in India unravels its own quirks.

The market for luxury in India doesn’t chase the disposable income curve blindly. One of the reasons is that the declared incomes of individuals may not always be their real income. The biggest learning for luxury retailing in India is not to mistake your consumer’s appearance for her propensity to spend. Luxury brands in the country have reported growth from surprising geographies. Many of them are from outside the key metropolitan cities. The stories of Coimbatore being the largest market for Mercedes and Mahindra launching luxury tractors for the rich farmers in Punjab are not new anymore. Depending on their financial appetite and social conditioning, India is witnessing select pockets of luxury emerging. In terms of geography, the rich agricultural belts of the north including parts of Punjab, Haryana and Uttar Pradesh; the trading and industrial belts of Punjab and the Southern India; upcoming small towns such as Pune and Chandigarh; the suburbs of mega metros such as Gurgaon and Noida, which are fed largely by the service industry, are some of the high performing pockets.

In terms of age group as well, there are pockets, which are more amenable to the idea of luxury, possibly owing to the life stage and the mindset. While the mainstream, middle-aged population has a steady contribution to the luxury market, the young in India are turning out to be the unlikely heroes. Many of the young people in India, below the age of 30 years, have high disposable incomes, courtesy their new-age jobs in consulting, investment banking, IT and so on. Some of them also come from wealthy parentage. What makes them a good target for luxury is their outlook towards life and their mindset, which is distinct from the traditional Indians.

Brought up largely in the post-economic-liberalization era, these are the no-strings generation of India. They have lived in the times of plenty and are not burdened by the consumption guilt typical of the traditional Indian mindset. In fact, they are eager to experiment with the new and experience the good life. This is the generation in India, which wants to look good, be rich and have fun, not necessarily in the same order though. However, its critical for this segment that the luxury brands speak in their language. Typical luxury brand speak such as that of heritage, refined taste and status may be too heavy for the generation that wants to live it light. Of course they want to signal their good life and the fact that they are arrived, but they want to look cool in doing so, not staid and old. Luxury for this segment needs to embrace youth values; it needs to be nimble, fun and may be a little quirky.

The other segment that’s a natural target for luxury in India is the people above 45 years. In their mindset, this segment may be at the other extreme of the no-strings generation, but they are not untouched by the dramatic changes that India has seen in the last two decades. The partition generation as they may be called, they have lived most of their early lives in the decades that followed the political Independence of India. They are the ones who have lived a cautious life, building up for a future that may not be so good. But as it happens, the future has actually turned out to be good. For them, the Income is still flowing in and they have a decent wealth created for themselves during the last few decades. Most of them may have kids who are doing well for themselves. Armed with a significant potential to spend and a mindset to explore, the matured segment in India too wants a taste of luxury. Their luxury however, is made up of harder stuff. They are more likely to spend their money on expensive real estate, automobiles and jewellery than on apparel and accessories.

Both, in terms of geography as well as demographics, the market for luxury in India is in pockets. As discussed above, its critical to know where these consumers are coming from, because that determines to a large extent, what they are looking for. While the luxury consumers of small town Punjab will not go beyond the known labels because unknown labels will have no social worth, the younger consumers of metros will continuously seek to experiment and look for a marriage of luxe with cool. At the same time, the mature generation of India will fall for relatively more tangible offerings such as real estate and automobiles. They would also give more benefit to taste and refinement than a twenty eight year old would.

India is currently a huge mass of consumers, constantly upgrading their lifestyle. Malls and multiplexes have brought together people of varied classes who would otherwise never rub shoulders with each other. The need for luxury here is also the need for the well heeled to signal the distance from the mainstream. For instance, the High Street Phoenix in Mumbai, which was once a premium shopping and entertainment destination has now been rendered mainstream by the Palladium, which is geographically adjacent to it. Palladium is the destination in Mumbai that separates the rich from the mainstream with its lineup of brands such as Burberry, Hugo Boss, Canali and others.

The last two decades of sudden economic growth in India has levelled consumers of all types and united them through shared symbols of consumption. Partly owing to new work places and their egalitarian cultures and partly because of the symbols of consumption that could be owned by anyone, the traditional hierarchies of caste and class have broken down considerably in the last few decades in India. McDonalds with its Rs. 20 (less than half a dollar) burger in many ways broke the divide between classes, so did the hypermarket chain Big Bazaar by selling affordable household and grocery items in air-conditioned environments, thereby making it attractive to all.

The next few decades will be about recreating the class differences by upgrading people to lifestyles that mark out their exclusivity. The bulk of the luxury market in India therefore, is in helping signal the distance from the mainstream. This segment is about upgrading people one step at a time from mass premium to the mid-luxury segment market. The big market for luxury in India is therefore between mass premium and ultimate luxury; in bridging the distance between what’s desirable and what’s affordable.

For example, in the luxury car segment, it’s the Rs. 20 lac (around $40,000) segment where BMW plays with its X1 and Audi with its Q3 is doing rather well. This segment is a bridge to the super luxury segment of BMW 5 series or Audi A6. Similarly, real estate projects that promise affordable luxury, selling an upgraded lifestyle with swimming pool, clubhouse and other such amenities are coming up in significant numbers. While these residences may not fulfill the ultimate dreams of the Indian luxury consumer, they are helping him upgrade to the next level of living and more importantly, to mark his transition from everybody to somebody.

Its a long drawn conclusion that products and services catering to the mainstream Indian market need to be customised to the local taste. Many brands like MTV, McDonalds and Suzuki (Maruti) are now case studies in localizing their offerings to the Indian market. Its true that a large number of luxury consumers in India are well traveled and would like the same experience from the brands that they get globally. But its also true that India’s own signature on luxury is emerging, and its rich culture is playing a big role in it.

Culturally, the royal way of living has influenced the Indian idea of luxury. The royalty have had their own style and precedence. Indian designers who have drawn inspiration from this tradition are well positioned on the Indian luxury market. The market for Indian designer wear has always been significant. Indian designers such as Anita Dongre who has six individual brands under her fashion umbrella, including a wellness spa and Ritu Kumar with thirty four outlets in all major cities in India have demonstrated that the idea of Indian luxury has widespread potential.

In many ways, India is rediscovering its own heritage and relishing the quintessential Indian luxury experience. Brands like Neemrana and Oberoi in hotels have restored the traditional forts and havelis (residences of the royalty) into luxurious vacation resorts. This experience of royalty as embodied in these luxury abodes is attractive for the Indians in the same way as the foreign tourists. Similarly, when it comes to jewelry, brands such as Tanishq (a brand of jewelry from Tatas) have preserved and revived traditional Indian design. Some years ago, an advertising campaign by Tanishq, positioned it as ‘tales of tradition’.

As in many other areas such as cuisine, luxury in India would do well to draw an inspiration from the Indian way of life. Whether it’s the sarees by Hermes, or the bandhgala by Canali, there is a lot in the rich tradition of India to fuel some trends in luxury. The emergence of India’s signature in its pursuit of luxury is an encouraging pattern, especially in the context where the market is still warming up to the idea of luxury consumption. Local and traditional motifs will play an increasingly larger role in expanding the idea of luxury. India may want its luxury products and services to confirm to the International class, albeit in an Indian way.

India is in a stage of rediscovering the idea of luxury. In this process, its inspired by its tradition and filled with its own idiosyncrasies. Even though most ideas of luxury have universal global appeal, brands and businesses would do well to understand the details of the Indian mindset and the market. The Indian luxury market, which is growing in pockets, needs to be understood for its specific motivations. We also need to be aware that the larger need in India right now is for signaling the distance. The big market here is in providing the bridge from the mainstream to the exclusive.

(This is a Chapter from ‘The Luxury Market in India: Maharajas to Masses’ published by Palgrave Macmillan)