ET Dialogue on Luxury: Companies need India-specific model to succeed
Luxury chains can succeed in India only if they choose a model which is India-specific, said commerce & industry minister Kamal Nath at The Economic Times Dialogue on Luxury conference in New Delhi on Thursday.
By TNN |
NEW DELHI: Luxury chains can succeed in India only if they choose a model which is India-specific, said commerce & industry minister Kamal Nath at The Economic Times Dialogue on Luxury conference in New Delhi on Thursday. The minister pointed out that the centres of purchasing power are not necessarily just in large metros such as Kolkata and Bangalore, but could also be in smaller cities. “There are a lot of emerging markets which could be tapped,” he said.
Addressing representatives of both Indian and foreign luxury brands and chains attending the meet, Mr Kamal Nath said the success of a venture lay in the business plan chosen by the investors. Pointing out that about 19 foreign luxury chains have been approved by the Indian government so far through the single brand foreign direct investment (FDI) window, the minister said that the companies had choice of various models of investment, including the franchisee route, the FDI route and the wholesale model.
Success in India also depended on the model of business, the minister said, emphasising that the model followed by multinationals in other countries may not work in India.
“India is not Malaysia, Thailand or Singapore. That is what makes it different. Luxury companies must have an India-specific approach,” he said.
Speaking at the conference, EL Rothschild LLC CEO Lady Lynn Forester de Rothschild said the luxury industry was not in contrast with rest of the economy. She pointed out that the industry should focus on creating more jobs. “There is a luxury industry which can be nurtured for the poor,” she said.
Pointing out that in Hollywood, producers and directors preferred actors who were engaged in some societal development activity, Lady Rothschild said that a similar approach could be adopted for the luxury industry. According to Entrack Group chairman Dilip Doshi: “For every item we sell, we will donate Rs 1,000 to non-governmental organisations working for underprivileged children till March 2008.”
Be it gourmet, fashion or jewellery, Indian flavours have become a luxury in itself globally. “It has become a tradition to have Indian elements,” said Dia Diamonds promoter Devaunshi Mehta. Some other speakers, though, choose to disagree. “International brands have been able to create a sustainable brand identity through logos and unique features. We have the unique ringtone for Vertu world over and Indians are demanding the same,” says Vertu president Alberto Torres.
According to Titan managing director Bhaskar Bhat, its important for marketers to bear in mind that Indian youth is digressing from owning ‘materialistic luxury’ to luxury that defines and describe them. “The high-networked Indians have a catchment area of $500 million which is growing rapidly. So, we must look forward to the emergence of new rich category that may immediately translate into spending in the market,” said Ficci’s secretary general Amit Mitra.
Wine and food is ultimate luxury for Indians. Indians have a distinct taste different form their global counterparts when it comes to the above two. Says Rohit Bal who runs his restaurant Veda in Delhi,
Above all, perhaps, time, is emerging as the most precious luxury after all. Says World Aircraft Trading president Larry McElyea, “For many luxury is about saving time.” The rising orders for private jets is a case in point.
Addressing representatives of both Indian and foreign luxury brands and chains attending the meet, Mr Kamal Nath said the success of a venture lay in the business plan chosen by the investors. Pointing out that about 19 foreign luxury chains have been approved by the Indian government so far through the single brand foreign direct investment (FDI) window, the minister said that the companies had choice of various models of investment, including the franchisee route, the FDI route and the wholesale model.
Success in India also depended on the model of business, the minister said, emphasising that the model followed by multinationals in other countries may not work in India.
“India is not Malaysia, Thailand or Singapore. That is what makes it different. Luxury companies must have an India-specific approach,” he said.
Speaking at the conference, EL Rothschild LLC CEO Lady Lynn Forester de Rothschild said the luxury industry was not in contrast with rest of the economy. She pointed out that the industry should focus on creating more jobs. “There is a luxury industry which can be nurtured for the poor,” she said.
Pointing out that in Hollywood, producers and directors preferred actors who were engaged in some societal development activity, Lady Rothschild said that a similar approach could be adopted for the luxury industry. According to Entrack Group chairman Dilip Doshi: “For every item we sell, we will donate Rs 1,000 to non-governmental organisations working for underprivileged children till March 2008.”
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“The prices in India are lower compared to Singapore but are 5-6% higher than UK. So I think Indian consumers are no different than Western consumers,” according to Murjani Group managing director Vijay Murjani. Murjani Group have recently brought Gucci and Jimmy choo to India. Be it gourmet, fashion or jewellery, Indian flavours have become a luxury in itself globally. “It has become a tradition to have Indian elements,” said Dia Diamonds promoter Devaunshi Mehta. Some other speakers, though, choose to disagree. “International brands have been able to create a sustainable brand identity through logos and unique features. We have the unique ringtone for Vertu world over and Indians are demanding the same,” says Vertu president Alberto Torres.
According to Titan managing director Bhaskar Bhat, its important for marketers to bear in mind that Indian youth is digressing from owning ‘materialistic luxury’ to luxury that defines and describe them. “The high-networked Indians have a catchment area of $500 million which is growing rapidly. So, we must look forward to the emergence of new rich category that may immediately translate into spending in the market,” said Ficci’s secretary general Amit Mitra.
Wine and food is ultimate luxury for Indians. Indians have a distinct taste different form their global counterparts when it comes to the above two. Says Rohit Bal who runs his restaurant Veda in Delhi,
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“We first tried the western style of serving small quantities of food on a big plate. The restaurant failed. Then we changed it according to the Indian customer. Today you have long queues outside the restaurant.”Above all, perhaps, time, is emerging as the most precious luxury after all. Says World Aircraft Trading president Larry McElyea, “For many luxury is about saving time.” The rising orders for private jets is a case in point.
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