When luxury brands forayed into the Indian territory many decades back, they had to make do with the five star hotels’ shopping arcades due to lack of decent luxury retail infrastructure in the country. Gradually, the space available at the shopping arcades in five star hotels started depleting as the number of brands foraying India increased. Also, luxury brands entering India made it mandatory to have retail space as per their standards.
The grand entry
The standard required by them was well-defined by the high streets like Oxford Street in London, Fifth Avenue in New York and Avenue Montaigne in Paris. These high streets had fancy buildings and clean streets and had well embraced luxury retailing. It was the post Independence era and India was recovering, matching up to the international retail standard was out of question.
Going by this set standards luxury brands entering India hoped to have their neighbours to be at par with them in terms of standard. They were disappointed to see sub-standard brands selling in the same street as the space offered to them. Thus they had not much choice but choose shopping arcades at five start hotels to retail their products in India targeting high-end clients like royalty and newly established industrialists and their families.
The luxury retail scenario has changed since then. The real estate firms in India realised the need for having luxurious retail ambience to enhance their business prospects, and built luxury malls. The initiative created opportunity for the luxury brands. “In most of the cases, the store size is larger, if not equal to a five star hotel,” opines Sudeep Chhabra, Head – Marketing, DLF Emporio.
Presently, we have a plethora of brands at our disposal with India getting its share of luxury malls like DLF Emporio and UB City. Among the much awaited projects remain Gitanjali Group’s luxury malls. Luxury malls promise to be home to just about all the major fashion brand across the world.
Chhabra avers, “A luxury retail outlet in a five star hotel is a part of the overall hotel experience, whereas a luxury mall as an experience is specific to shopping. Physically, in the look and feel there is hardly much difference in the stores, however the overall ambience in a luxury mall is more shopping focused, naturally.”
Brand presence in hotels and malls
The brands present at luxury malls include names like Louis Vuitton, Gucci, Dunhill, Fendi, Mont Blanc, Van Cleef & Arpels, Zegna, Rolex, and Omega among many others. Five Star Hotels like The Oberoi boast of high end retail brands like Christian Dior, Brioni, Hermes, and Bvlgari.
Though luxury malls did attract these brands initially but later they realised that mall developers charge exorbitant rates for renting the retail space in a luxury mall. Moreover, the luxury brand retailers feel that still India has a long way to go in terms of sales at luxury malls. Still they get visitors who are keen to get a feel of these luxury brands and visit the stores for the same. They do not intend to buy.
On the other hand, at their outlets present at the shopping arcade in five star hotels they get visitors who are mostly elite Indians and drop in just to shop. These Indians splurge on high-end brands and pay in hard cash unlike their foreign counterparts who prefer making payments through credit cards. The amount often runs into lakhs. Also, with India enjoying the highest number of billionaires in Asia, five star hotels offer lucrative business opportunity.
Brioni, Italian luxury brand is currently present in India at The Oberoi – Mumbai and Delhi. Ana Bredmayer, Country Head-Brands, Bada Saab Group, comments, “Five Star hotels provide an international look and a comfort zone which a travelling customer looks forward to. Such a customer believes in luxury and quality. He/she could be anyone from the age of 20 to 80. In India, there is no room in Five Star Hotels, so the next resort having been chosen is malls. The climate provided in malls is still not appropriate.”
The insiders revealed that in the luxury segment it is mostly the accessories like bags, watches, and belts etc that are preferred by Indians and sell more. Apparels are not much in demand as Indians prefer traditional clothes.
However, reaching the set sales target is still a far cry for these luxury brands. Different brands have different goals, some come with long term objectives some come to capitalise on the booming market and make quick bucks.
To survive the market these brands are taking their products to newer venues apart from luxury malls and shopping arcades at five star hotels. They take their products to off-site trunk shows and boost sales by organising exhibition-cum-sale, which are open exclusively to invitees. The cities where this exercise is said to be conducted are Chandigarh, Kolkata, Ludhiana and Hyderabad.
Some brands are also employing the strategy of enticing the upper middle class with disposable income. They are trying to cash in on the fact that Indians are becoming brand conscious hence are reworking on their strategy for luxury malls. The promotional strategies for Brioni, as told by Ms Bredmayer, remain to be more of in-store events, PR activities, editorials, fashion oriented magazines etc.
Survival of the fittest
Luxury malls may be an established market abroad but in India the trend, not at an advanced stage, needs some upgradation. And shopping arcades at hotels are so occupied that have somewhat reached a saturation point.
“From a positioning perspective and by sheer availability of space, a luxury mall tends to score over shopping arcades in hotels,” sums up Chhabra.
However, with the upcoming of Five Star Hotels, the opportunities will get multiplied. Luxury brands must start targeting upper middle segment by slightly lowering their prices so that they can boost sales at both the said categories of outlets!