When I introduce myself during gatherings, the inevitable
question comes soon; what do you do?
Working for a Luxury Eyewear company, the answer is not as
simple as it seems. The worldwide Eyewear market is organised differently from many
other branded markets. Big Fashion Houses are not in a position to design,
manufacture and distribute Eyewear by themselves because it’s too different
from their core business. Cloth, shoes, belts or perfumes are differently designed,
produced and are sold in entirely different channels than Eyewear. This is why
the eyewear market is dominated by companies like mine, who focus on the
eyewear category for these brands and of course we would have some brands which
we own ourselves.
Having that question cleared, the next one is very
predictable; how is the market in India?
Quite often it becomes a little tricky to respond to the
aspirational well-off society without offending the people in India, who have
made it in their life and would generally qualify to own these exact products
which I am in charge of. Therefore one has to realize, that organized retail
only started about 20 years back in India. As a result, one should not expect
the same standards prevailing in markets where modern retail has it routes many
decades back. Not only that a vast majority does not have the economical
capacity to buy luxury goods, 98% of the Indian population would not have the
geographical access to it, because luxury retail still keeps its focus on the
powerful metros, which are only a few. Given the nature of the Luxury business,
the blooming e-commerce platforms cannot bridge this gap. Keeping in mind that
we have more than 60 cities in India, which are populated with one million or
more citizen, the number of metros might increase in the near future. Of course
there are some regions in India which do not belong to the metros, but still
have high potential, given their accumulation of High net worth individuals
(HNI’s).
As a result, many luxury brands are only known by their name
and maybe by their price point. The distinctive brand values, which are the
fundament in the luxury business, are not celebrated or appreciated. The distinguished
brand heritage, design, technology or creativity do not make a difference to
many Indian luxury customer, and it’s more important to include a big logo to
ensure that the have’s can proclaim from the have-not.
We should not be surprised by this fact, as the western
world grew up for a long time surrounded by luxury brands whereas the same
brands were kind of thrown at Indian customers and therefore serve a totally
different purpose.
Another challenging circumstance is, that the Indian culture
is a bargaining culture. This might route in the recent history, were sellers
would overprice their goods, to increase their own margin and to be in a
position to give discount as a feel good factor. This is also why the Indian
government recently introduced a Maximum Retail Price (MRP) law, which does not
allow to sell above the imprinted price on the product, to solely protect the
consumer from overpaying a product.
However, the bargaining culture has not changed but goes
against the culture of luxury products. To ask for a discount is not the
exception but the rule, in most purchasing activities in India. Some retailer,
who cannot sustain this pressure, might even find the solution in trading off counterfeit,
which again stands in contrast with luxury retail and is a considerable problem
in India, as IP protection is not well enough guarded.
Therefore the Indian Luxury market is still highly
underdeveloped and many luxury brands have not yet found their entry into the
market.
Needless to say that the potential is huge, and growth rates
are big (on a smaller basis), otherwise I would not have stayed within this
Industry for such a long time. But many commonly learned success models might
not work in India, and the industry has to be re-invented to tailor such and
interesting but complex market.
The future is here, the future is India. Jai-Ho!
