In this article we will traverse through the growth and the market perception about Luxury brands, the current scenario in the Indian market, the factors that assist sales or become huddles and the strategies adopted by the Luxury Brands’ marketers to promote sales of luxury goods as they prepare to face the global economic crisis and the rupee depreciation.

1. The Rise of Luxury Brands in India - a Study
Praveen Asokan, MBA (IB)
Abstract: In this article we will traverse through the growth
and the market perception about Luxury brands, the current
scenario in the Indian market, the factors that assist sales or
become huddles and the strategies adopted by the Luxury
Brands’ marketers to promote sales of luxury goods as they
prepare to face the global economic crisis and the rupee
depreciation.
Introduction
Any goods or services that are not considered as dire essentials for living are termed
luxury items and once these goods manufactured under a specific brand they are termed Luxury
Brands. From ancient days, luxury has been considered a status symbol in the society. In the
modern era, consumers consider luxury as a necessity and not as an indulgence.
Luxury brands are regarded as images in the minds of consumers that comprise
associations about a high level of price, quality, aesthetics, rarity, extraordinariness and a high
degree of non-functional associations.
The modern understanding of a brand is consumer and identity oriented. Accordingly,
brands are regarded as images in the minds of consumers and other target groups, which are
designed by companies to identify their products. Luxury brands are highly associated with their
core products. This is reflected by the larger part of the existing definitions of luxury brands,
which refer to specific associations about product characteristics
What makes a Luxury Brand?
Any potential luxury brand should be evaluated by the constitutive characteristics of
luxury, which are described below.
Price: The brand offers products which belong to the most expensive products of their
category.
Quality: The brand offers everlasting top-of-the-line products, which won’t be disposed
of even after long utilization or defect, but rather repaired and which often even gain in value
over time.
Aesthetics: The brand behaves like a chic and vain dandy, who would never leave the
house in less than perfect style. Whenever and wherever the brand is seen, it embodies a world of
beauty and elegance.

2. Rarity: In contrast to mass-market brands, the brand needs to limit its production and
tries not to disclose its (high) sales numbers. The brand plays hard to get and is not available at
all times or places.
Extraordinariness: The brand has a mind and style of its own and its products offer a
“kick” and surprise with the “expected unexpected.”
Symbolism: The brand stands for “the best from the best for the best”; its charisma fills
the room, and regardless of whether it is of a conspicuous or understated nature, deep inside, it is
swollen with pride.
Luxury Market
Internationally, the market for luxury brands has grown rapidly over the past two
decades. Estimated to be worth $263 billion in 2007 which represents a 31% increase over the
past five years, predictions indicate a 71% growth over the next five years, largely fuelled by
high demand from emerging economies.
India's luxury industry is set to grow at 25 per cent a year between now and 2015,
according to an ASSOCHAM-YES Bank study. However, compared to China, India has far to
go. China's luxury car market is nearly 30 times bigger, and the luxury watch market in mainland
China alone is 15 times larger. At $6 billion, India's luxury market is a fourth of China's $25-
billion one.
Buyer Behaviour:
“Buying luxury is about more than appreciating fine craftsmanship - it is an affirmation
of one's accomplishments to oneself and the world. It is considered a style statement for
individuals.”
Luxury sectors:
Luxury brands can be divided into the following categories based on the sectors that they
operate in. The various luxury sectors catching up in India are as follows
1. Cars: constitutes major market share but declining currently due to the increase in taxes and
fuel prices
2. Personal luxury goods: decreasing due to increase in taxes
3. Premium hospitality: increasing due to promotion of tourism
4. Fine dining: decreasing due to introduction of food bill
5. Luxury drinks, spirits and other items: remaining constant and is steadily rising

3. The major reasons that encourage and influence buyers in India to buy luxury goods are
the following:
1. Luxury brands act as a status symbol in increasing or displaying the net worth of that
individual.
2. The sudden increase in net worth of individual citizens-- people with more than $1 million in
onshore liquid assets - in India grew 200 per cent from 2006 to 2013 and households with an
annual disposable income of over $100,000 increased 60 per cent, from 700,000 in 2006 to 1.1
million in 2013.
3. Coming up of new malls selling exclusive luxury goods promote mall culture and window
shopping. Provisions provided by these new markets explored by the existence of malls make
space for attractive display windows that will pull in customers from various ages and
backgrounds.
4. Due to the coming of information technology and social media marketing, customers are
becoming more brand conscious and this awareness helps customers to pick luxury brands.
Failure of luxury brands:
The Indian luxury brands market, though in the growth phase, faces several challenges
due to the following:
1. Failure to cater to sudden rise in demand.
2. Lack of proper retail infrastructures.
3. Higher customs duty
4. Living heritage influences taste.
5. Popular misconception that buyers must be dressed in luxury goods in order to buy a new
luxury product.

4. Backup measures and strategies:
Though the market faces all the above mentioned risks, the luxury goods retailers adopt
the following strategies to combat the situations and expand the luxury market by promoting
brand loyalty:
1. Personalised sales based on recording customer preferences
2. Personalised services to customers offering free goods during off season.
3. Careful market watching, introducing goods in entry level pricing.
4. Currency hedging in case rupee continues to depreciate
Conclusion:
Most luxury brands in India have margins of 35 to 40 per cent. Luxury goods, however,
continue to sell at prices 30 to 40 per cent higher than in some other markets. The product range
in Indian stores is limited, and new seasonal collections take longer to get here.
The Luxury brand market has been steadily growing in Indian market for the past one
decade and it has been estimated to grow at even faster phase from 2015. Almost all the major
international players in Luxury products have entered Indian market and doing a good business.
With the expected introduction of single value added tax system, also known as Goods and
Services Tax (GST), the luxury market is going to be on a boom phase in India.
Reference:
1. http://businesstoday.intoday.in/story/why-do-we-buy-luxury-items-nandini-bhalla/1/197650.html
2. http://businesstoday.intoday.in/story/indian-luxury-market-book-authors-share-
trends/1/197656.html
3. http://www.financialexpress.com/news/bmw-tops-new-vehicle-sales-satisfaction-among-luxury-
brands-in-india/1174113
4. http://forbesindia.com/article/hidden-gems/genesis-colors-success-beyond-satya-paul/36001/1
5. http://www.sciencedirect.com/science/article/pii/S0148296311003584
6. http://www.sciencedirect.com/science/article/pii/S1090951610000854
7. http://www.sciencedirect.com/science/article/pii/S0148296311003481
8. http://www.sciencedirect.com/science/article/pii/S0148296309002793
9. http://www.sciencedirect.com/science/article/pii/S0148296311003511
10. Figures : http://businesstoday.intoday.in/story/how-luxury-brands-are-changing-to-win-the-
indian-market/1/197547.html