| However, almost stealthily, this pyramid is also beginning to show signs of an emerging big opportunity at its apex--the opportunity to cater for the rich and ultra rich. Occasionally, the subject does get covered in the media now. One or two magazines have also started with a focus on the luxury segment. However, by and large, there are very few players that have given attention to the market for the very top end products and services. |
| Globally, the market for "luxury" goods is estimated at over $70 billion (about Rs 300,000 crore) and growing at a very health clip of over 10 per cent. Growth in the traditional markets such as the US, Europe, and Japan is very robust though China, Russia, and the UAE and other 5 GCC countries are now beginning to show very encouraging growth. One only has to visit Shanghai and Dubai to get a sense of the impending high-end consumer spending boom these countries are on the cusp of. At a "luxury" conference organised earlier this week by the International Herald Tribune at Dubai, it was amazing to hear of mega investments like Burj Arab ($15 billion) from the Emaar group, whose very articulate and highly ambitious chairman proudly announced the launch of a collaboration with the Giorgio Armani group of Italy to build a number of high-end hotels, and a shopping boulevard in his Burj Arab development that is being benchmarked to take on Champs Elysee as the "premium" boulevard of the world (of course, Shanghai has also made a similar claim for its own vision for Nanjing Road shopping street). |
| India has seen some entrants in the luxury space. The most celebrated success is that of the Oberoi group with its "Vilas" properties, which now vie for the very top honours globally. Indian Hotels' Taj Mahal property in Mumbai and The Imperial in Delhi are also very fine examples. Ravissant has made some impact in the high-end market for silver artifacts. A few others have also succeeded in creating a mark. Unfortunately, the list is very small! The rest of the players in India are global brands such as Luis Vuitton, Canali, Chanel, Bulgari, Tiffany, and the like. Almost all of these international players are reportedly highly enthused by the response in India and hence, many are now stepping up their investment plans for future expansion. |
| As per a yet-to-be-released report on the Indian luxury market by The Knowledge Company (A Technopak division), India already has 1.6 million households earning Rs 40 lakh (about $100,000) per year or more. More importantly, this number is growing at about 14 per cent per year and is likely to cross 3 million very high-income households by 2010. The number may appear insignificant in the context of about 180 million households in India but in terms of spending power, it is very significant. This newly-rich segment is seeking high-end homes, souped-up automobiles, chic clothing and accessories, cutting-edge technology gadgets and gizmos, and gourmet food. This newly-rich segment is also seeking upscale vacations, fine dining, and a host of other lifestyle options. |
| All of this translates into promising opportunities for real estate developers to develop shopping malls dedicated only to the luxury brands (like those planned by the DLF group in Delhi and Mumbai), for Indian manufacturers to create new products (and brands) positioned at the very top end of the market, and for entrepreneurs to create retail chains/businesses addressing the very exclusive needs of an exclusive group of customers. It, of course, takes painstaking effort, a lot of money, and much patience to create the product and then the right image for the luxury market. However, the payouts can be very rewarding. |
| The government also has to play a very important role in this process. It needs to move out of its pseudo-socialist mindset, and acknowledge that success, and the financial rewards that come with success have to be appreciated and applauded. All major cities of the world take pride in developing shopping and residential areas that attract the top brands/retailers and the high-end customers. India can start with a bold redevelopment of Connaught Place in Delhi and the beautiful Fort/Colaba in Mumbai to make these two areas a modern, resurgent India's best showcase to the rest of the world. Other cities like Kolkata, Chennai, Hyderabad, and Bangalore can follow. The government also possesses some of the finest real estates in major cities--it can release some of it specifically for high-end hotels, shopping plazas, and residential developments, thereby facilitating the growth at the top end of the market while also generating substantial revenues for itself in the process. |
| Indeed, it is time we acknowledged the emergence of a new, more affluent, and successful India and take pride and encouragement from the same! |
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