With consumers for luxury goods more in numbers than adult population of several countries, luxury brands are setting up shops in India to tap the growing market. So you have Fossil wrist watches, Dunhill menswear, Bang and Olufsen, Escada, Mon Chateau, the list is growing in the metros and they are now planning to spread.

For 21 year old, Mukesh Kumar, his most prized possession is the Fossil watch that his father got him for his birthday early this year. “I had always wanted to buy this watch but could not afford it with my pocket money. He gave me Rs 7,000 and I bought the watch,” he says. For many like Mukesh looking for high-end premium branded clothes, accessories, perfumes, footwear and electronic goods, the growing recognition of India as a potential market by international luxury brands is a boon.

“India is a huge market for us. We are looking at having eight more stores across the major cities here,” says Mark Newman, Asia Pacific Managing Director, Dunhill, a premium men’s-wear brand, which recently launched its first store in the capital. 

Luxury brands
Of late, companies such as premium electronics-maker Bang & Olufsen and fashion designers like Escada and Brioni have opened shops in New Delhi and Mumbai, joining the likes of Chanel, Louis Vuitton, Versace, Fendi and Valentino.

“The market for luxury goods including premium electronics goods like LCD and Plasma TV in India has grown rapidly in recent times. The sudden surge for these goods can be attributed to increasing disposable incomes, evolving lifestyles and greater brand consciousness. Possessing such hi-tech products has become a status symbol in the upper middle class strata,” says Tarun Jain, Country Head, Hitachi Home Electronics Singapore.
In India the LCD and plasma market (costing between Rs 35,000 to Rs 3.4 lakh) is expected to grow to 3 to 3.5 lakh units in 2007 as compared to 2 lakh in 2006. Easy availability of loans,  and simple repayment options has brought such products within the reach of the consumer.

American lifestyle
In Bangalore if you want the world’s best interior products, you may have to visit the showroom of Mon Chateau which is the purveyor of American luxury lifestyles for the Indian home.

Mon Chateau has brought together the premium American brands and designers in furniture, fabrics and accessories to create a cocoon of luxury for you.
“The exclusive brands we have painstakingly picked to create Mon Chateau are known for their style, craftsmanship and use of expensive materials. You will find them in the homes of the rich and famous including American presidents, Hollywood stars and business leaders” said a spokesperson of the company.
Mon Chateau provides a sophisticated and understated luxury that makes a home elegant, comfortable and a joy to live in, claims the company.

Small but growing
According to a study conducted by The Knowledge Company, an initiative of KSA Technology, there are over one million consumers in the luxury market, a number which is expected to treble by 2010. Going by the above data, it can be said that India has more consumers for luxury goods than the adult population of several countries.

According to the Forbes annual list of World’s wealthiest people, India has the most billionaires of any Asian country, with 36 together worth $ 191 billion. Fourteen Indians were new to Forbes’ list this year. “Indians have now become global. They know about all kinds of luxury goods in the market and with the economy growing, there is now a huge market for luxury goods,” says Filmmaker Karan Johar who has often been criticised for making movies, which portray luxuries.

“India is a long term market and hence the present potential is not the reason to be aggressive in the market. Rather, the current market is actually quite small although the consumption by Indians is quite substantial - the difference due to the fact that many Indians still prefer to make their purchases overseas on account of high duties and taxes,” says Amar Agrawal, MD Spa Agencies. Spa agencies, is the Indian partner for Spanish porcelain maker Lladro. Currently Lladro has five ‘boutiques’ in India, which sells products ranging from Rs 5,000 to Rs 75 lakh.

More money
“People have higher disposable income because of double incomes and are more aware due to international exposure. Now, they don’t just go in for brands but also demand higher quality,” says Shankar Prasad, Chez Elle, a premium furniture store having presence in both Bangalore and Chennai. Chez Elle, where a single-seater sofa can cost anywhere between Rs 30,000 to Rs 2 lakh plans to now open two more stores in Ludhiana and Goa respectively.

According to market reports, around 6- 7 million Indians can afford to buy luxury goods but hesitate to do so since they are unfamiliar with brands and products. But people who indulge in luxury goods, have their own reasons. “When I take my Prada bag to office, people compliment me for my bag. When you wear or carry branded especially premium, you are making a snob statement.

No matter what people say, everybody likes to make such a statement,” says Swapnil Sharma, a young Call Centre Executive. But for Rohit Kapoor, a Bank Executive, indulgence in luxury is personal. “I buy the products for myself than to show off in front of others. Its more personal for me,” he says.

According to sources in Villeroy & Boch, a German luxury tableware brand, which entered the Indian market recently, India is growing market for luxury goods. Currently they have two stores here but are planning to have seven by the end of this year. Industry experts however argue that the present size of luxury market is small and will branch out much bigger. High duties and taxes are the major impediments.

Source: Press Trust of India