Upgrade to luxury: India’s aspirational Travel Retail shopper
Luxury isn’t new to India: since the time of the Maharajas, many cultural and historical ideals paint pictures of richness and prosperity. What is new is the Indian shopper’s rediscovery of luxury and a desire to upgrade their lifestyles.
November 2015 | Simon Best, Business Director, CiR Business Lounge
A shift in mindset, particularly amongst young professionals, accounts for an Indian shopper that has become more comfortable with and accustomed to the finer things in life*. This, plus a growing economy, has united more consumers from different walks of life – making shopping attractive and affordable to all.
As the majority of Indian consumers now have a better standard of living, higher income households are then prompted to distance themselves from mass premium and upgrade to the next level of ultimate luxury; their brand preferences need to convey grandeur and they seek items that are unique.
The luxury market offers this exclusivity and enables shoppers to buy and attain an opulent lifestyle. Universally acknowledged as luxury’s last remaining frontier market, India’s luxury goods industry is estimated to be worth $14 billion* in 2016.
The appeal of travel retail
Although the Indian retail market is evolving to cater for shoppers’ preferences, with modern malls, concierge services and increased home visits by brands, many Indian luxury shoppers prefer to travel abroad** to make purchases.
This is perhaps due to ‘consumption guilt’ – poverty is very much part of modern day India – and for fear of appearing ostentatious**. A high luxury goods tax on the Indian domestic market also generates a need to have the best products at more favourable prices*. For the Indian shopper, travel retail presents them with attractive duty free rates, special edition products and ultimate discretion.
Most Indian shoppers prefer the in-store experience to shopping online for luxury investment purchases***, as they like to feel and see a product first. This makes the traditional travel retail store increasingly relevant to the target market.
With an equal spend on luxury Indian wear and Western brands*, it’s important for travel retail’s luxury suppliers and retailers to speak the Indian shopper’s local language and tailor their offering. Hermès embraced this trend by creating a sari collection** that was based on its signature printed scarves. The company’s decision to specifically target the Indian luxury market in this way highlights how important the country’s affluent have become to high-end brands – and the global travel retail channel is opportune for such a showcase.
A key luxury item for the Indian shopper is jewellery, which has amplified as the popularity of throwing lavish weddings and parties increases*. The marriage market alone is set to grow at around 25% per year** and, as jewellery signifies status in Indian culture, finely crafted gold jewellery is in high demand. A chance to buy such items when travelling is an appealing prospect to the Indian shopper – and a way for travel retail to make special occasions even more memorable and unique.
Part of the existing luxury brand package in travel retail is that it can make shoppers feel like a ‘somebody’. Those that can offer this as well as an emotional, meaningful, opulent shopper experience are most likely to succeed in the long-term with the Indian luxury shopper.
International luxury brands will continue to face strong competition from local Indian designers. The luxury label is only worth so much, as the overall delivery and experience of a luxury brand is key to driving loyalty and purchase*** for the Indian shopper. Ultimately, they want to make the most of their money – and this is where travel retail is really able to add value by providing something exclusive and memorable across the entire passenger journey.
Forbes India states that, like a fine wine, India’s luxury market is maturing slowly but surely*. Since India’s economy and appetite for luxury is predicted to grow even more, the potential to target this increased consumer base in travel retail strengthens and diversifies.
If unspecified: CiR database.