The government is coming down heavily on the non-essential imports and the plan includes to reduce the import bill on segments such as furniture, leather and footwear among other luxury products.
As the imports are likely disincentivised, the focus will remain on the homegrown brands to match or better the international products and gradually become a global name.
But do the local players have it in them to become a mainstream luxury name worldwide?
Amanpreet Ahluwalia, Business Head, Zoya, said that historically India has not been a big market for luxury products. People were not as conscious of spending on vanities, but this has changed and today the luxury market is steadily growing. Since demand was not as strong in the past, it may not have been as much of an impetus for local luxury labels to develop.
Also, luxury needs patience and investment. The gestation period in this business is usually very high. It helps to have a big brand backing the effort.
For instance, the Taj Hotel is a great example of a very successful international luxury brand. But it took time to build. Also one needs global sourcing capabilities, she added.
According to her, Zoya has been successful because of the Titan network with global offices that allows the brand to source specific, rare stones from any part of the world. That may not be possible for others.
âMaybe eventually we will have more because luxury has also just started growing in India; people were not conscious of spending on the vanity, today they are. People are evolving,â she said.
A lot of the aura of high-end luxury brands derive from the source.Â While India may lag behind some of the worldâs leading luxury brands in the fashion space; many India brands such as Taj Hotels and Oberoi in hospitality, or jewellery brands such as Tanishq today compete with the best in the world.
According to Lloyd Mathias, Angel Investor and Business Strategist, building luxury brands requires deep pockets, quality marketing and a long-term perspective. Also, the ability to stay on course and avoid price discounting or compromise on any input.
âIndia is still new to the game that many European brands have been at for decades. I do think this trend will change as Indians embrace luxury and are able to build off our rich heritage,â he said.
Over the years, the market in India has witnessed home-grown brands such as Forest Essentials, HiDesign and Sabyasachi becoming global in terms of value proposition and quality of products competing with luxury brands.
Ambi M G Parameswaran, Brand Strategist and Founder of Brand-Building.com, said Indian brands have to build on the traditional strengths of India, i.e. craftsmanship and design. Several Indian apparel designers have gone global, so they can expand into other products under their label.
He added, âIn addition to exciting well-designed products, I think they need to do well-crafted brand communication. Maybe Nirav Modi had something going. He opened his eponymous stores in high street NYC locations. But he was playing it fast and easy. Maybe an Indian luxury brand can play that game more honestly and conquer the world.â
Even Kiran Khalap, Co-founder and Managing Director, Chlorophyll Brand and Communications Consultancy, said every nation will produce luxury brands in some categories, but the number of such brands will be governed by local demand and India does have luxury brands in the hospitality sector. All our local techniques of art and craft from Madhubani and Warli paintings to Dhokra can, therefore, be converted into luxury, but hasnât been!
âIndia does not have luxury brands maybe because the domestic market is too small. The one area where India does have global luxury brands even today is hospitality. Luxury brands are luxury because they are defined by scarcity, artificial or otherwise. Natural scarcity happens when the product is hand-made, hence is in limited supply. This does not depend on the nationality: single malts from Japan are as much in demand as those from Scotland,â he added.
For instance, the famous Birkin bag by Hermes handmade in France has a waiting period of several years. This makes it a luxury good for which demand increases as the price increases, in apparent contradiction of the law of demand.
Marketing the international way
Communication is a critical part of a luxury brandâs appeal as they often speak for the user.Â As luxury brands target very specific customer groups, they need to build deep relationships with their clients and offer a superior purchasing experience, Mathias said.
AI and big data may help luxury brands provide a personalised and superior customer experience through consumer segmentation, behaviour and sentiment analysis and predictive analytics.
He suggested Indian luxury brands will have to focus on each of these areas but most critically on the product offering and the purchase experience. Plus, experiential marketing and bespoke events, which are a big part of a luxury brandâs marketing mix. Indiaâs rich heritage offers an opportunity to build world-class brands in various segments of the luxury market â clothing and footwear; bags and accessories; jewellery and fragrances.
It is important to remember that there is a move against excessive consumerism and luxury brands of the future will need to evolve towards new models of ethical and sustainable luxury, he added.
When it comes to building a luxury brand, whatâs most important is the aura of exclusivity, personalisation and an exquisitely crafted product, Ahluwalia said.
Explaining how the strategy at Zoya revolves around offering an unparalleled retail experience, it has luxuriously appointed store interiors and refined customer service by trained staff, opulent in-store hospitality to private viewing areas that are designed to delight. Every aspect is thoughtfully curated to elevate the customersâ experience and engagement with the brand.
Even the masterful craftsmanship, inspired design and a rich legacy of rare jewellery all uniting to form the different facets of this one elusive jewel, underscoring Zoyaâs position as Indiaâs answer to timeless luxury, this care and attention is seamlessly extended to the customer touchpoints in its digital universe as well and highlighted through innovative PR and events. Thus, personalisation and exclusivity have become a key element of its core strategy.
Luxury represents status and people are always eager to replace the mediocre with opulence. Young, urban, affluent Indians are keen on experimenting with global brands and unlike an earlier generation, they donât have to wait to buy luxury on a trip abroad.
Over the past few years, many marquee global luxury brands â Armani, Chanel, Versace, Gucci, Christian Dior, Ermenegildo Zegna, Louis Vuitton, Canali, Salvatore Ferragamo â have established their presence in India with Indian partners. Increasing exposure through travel, global shows on OTT platforms have âflattened the world, and made global luxury brands both desirable and accessible.Â
This combination of awareness, desire, status and flaunt is a fertile ground for savvy global brands who have been ready to cater to it. They have created unique and bespoke brand experiences through a smart mix of boutique stores at top five-star hotels and luxury malls like Emporio in Delhi, Palladium in Mumbai and Bangalore's UB City; exclusive invitation-only events; and key influencers. This has helped them developed a loyal user base.
Apart from this, these global luxury brands primarily come from a few countries. So as far as this luxury audience is concerned, there is very little scope in the short run to do a pivot to do Make in India, said Parameswaran.