As I sat down for lunch with three chic friends at a tony new cafe in Khan Market in Delhi earlier this week, the conversation quickly turned to luxury labels. Everyone, with the sole exception of yours truly, had just returned from holidaying abroad. And if Indians travel they don’t like to miss out on the shopping. And it wasn’t just any old shopping that was discussed but the high-end, high-octane luxury label-buying spree that was the focus. Pucci, Gucci, Jimmy Choo... the names tripped off the tongues of my friends easily as we moved gently from the starters to the main course and signed off with coffee.
But these ladies aren’t getting their luxury-label fix in India, despite new, posh malls selling these labels opening up right here and now. The reasons are several, but the most important one is that even at that end of the spectrum, Indians are cost-conscious. It’s much more exciting to get a pair of Christian Louboutins at 50 per cent off than at full price. And in countries like the US, where these sales happen all the time, for many wealthy Indians it’s better to shop for brands there.
There is no doubt that, even with recession setting in in the developed world and threatening us as well, Indians’ love affair with organised luxury labels has just begun. And the dip in the growth rate of this country doesn’t seem to be dimming that love. But, to pursue that love, Indians will travel far and wide rather than pay more than they absolutely must in India. And that is why sales are so loved here.
At a sale of a luxury label in Delhi recently, the store had to shut its doors and allow people to go in in small batches, as the response was overwhelming. Cut-price luxury is better than full-price luxury.
Since luxury isn’t a necessity and can wait, those who travel regularly exercise that option and try and catch the best deals that are on offer in different parts of the world. So even if a luxury mall in India sees high footfalls, they don’t get converted into sales. And that should worry all those brands that have come into India and are paying high prices for retail space. A combination of high rentals, non-availability of a luxury environment to open retail outlets and high duties on luxury goods in India has led to these products becoming unviable to sell in a competitive global market.
Luxury labels in India need to rethink their strategy completely if they want to make a serious go at establishing themselves in this country. And this has become even more imperative now that Indians are likely to have less to spend on non-essentials.
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As our long lunch was drawing to a close, the girls at the table were in total agreement: shop for luxury labels, but not in India, and if you must shop here then just wait for the sales. Why pay now, said one of my friends, when you can get the same thing just six months later at 50 per cent off? And that makes perfect sense in these recessionary times.