Luxury Presentation

LUXURY

The Luxury Cult Comes to India

Vinod KaulDirectorRVG NewsVision Pvt. Ltd

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Defining Luxury

The basic Gucci or LV ladies handbag is a canvas bag selling for $1000.

RVG NewsVision Pvt. Ltd

LUXURY

Defining Luxury

The emotionalism of luxury

“Purchase of luxury items gives the buyer an immense amount of joy which surpasses the economic value of the product.”

“…it is bought to satiate an altruistic need and the joy of possessing a piece of extreme luxury is an end in itself.”

Louis Vuitton CEO, Yves Carcelle


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Defining Luxury

Characteristics

Luxury brands live in people’s hearts & minds

Luxury brands have range Can be teamed with many products

Luxury brands have permanence Don’t go out of style/are classic


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Defining Luxury

Wealth & other forms of luxury

Luxury is most often associated with wealth & exclusivity. Other forms: Time, Experience, etc

A recent US study (2000 affluent consumers by the CBC Research Centre remarkable similarity in perspective around the world largest chunk (44%): ‘luxury is having enough time to do whatever you want and being able to afford it’.

Next chunk: ‘life experiences’ and ‘comfort, beauty and quality’.

Material products become just a tool or a toy for that greater ‘life experience’.

Exotic luxury packages: A flight into outer space on the Virgin Atlantic?

Cont :-


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Luxury Defined

Values of Luxury

• Rarity/exclusivity• Highest quality• Know how• History, roots, dreams• Rewards: pleasure, status• Emotion, experience• Custom made


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Luxury defined today

The maker of dreams. “The luxury industry sells a share of a dream to the customer”.

Luxury Defined

Madame Laggard, French Trade Minister


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Downside

The Ethics of Luxury

Opulent & decadent

Materialist & consumerist

Social segmentation & vanity

Exploitative - $1000 LV bag in canvas

Not essential

Conspicuous consumption

Upnside

Need not be vulgar but sophisticated

Aesthetic expression

Social positioning more democratic than ‘caste’ system

Can be genuine pursuit of excellence

Selling dreams/mystical experience


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Luxury Products & Services

Cars: Jaguar, Mercedes Benz, Lamborghini, Rolls Royce, Bentley, Ferrari, Bugatti

Couture: Versace Indian couture designers: Rohit Bal, Tarun Tahiliani May not include prêt designs

Hotels & resorts Amar Vilas (Oberoi), Four Seasons


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Accessories

Footwear: Jimmy Choo

Handbags: Louis Vuitton, Aigner, Leiber, Hermes, Prada

Small leather goods: Dunhill

Watches: Piaget, Tag Heur

Eyewear: Armani, D&G, Chanel


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Perfumes: Channel

Jewellery & Gems: Cartier, Tiffany

Writing instruments: Mont Blanc

Luggage: Louis Vuitton

Liquor: Henessy (vodka), Blue Label, rare wines Art

Not Luxury: Mango


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International Powerhouses in Luxury

French luxury conglomerate

Chairman: Francois-Henri Pinault

Gucci, Yves Saint Laurent, Sergio Rossi, Bottega

Veneta

Alexander McQueen, Stella McCartney, Belanciaga

Turnover: 18 billion euros

LVMH Moet Hennessy-Louis Vuitton SA

Louis Vuitton founded in 1854 - luggage

Merger in 1987

Bernard Arnault, Chairman

Tag heur, Louis Vuitton, Fendi, Celine, Kenzo, Dior, Marc Jacobs

Turnover: 16bil euros, Employees: 72,000

PPR (formerly Pinault-Printemps-Redoute), 1963


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The Marketing of Luxury

Entry level items

Under $250Cuff links, scarves, fragrances, ties Bought by aspirational buyers.

Investment Pieces

Above $250watches, apparel, figurinesBulgari Aviator sunglasses $330Burberry Classic Trench Coat $1,184Omega constellation Double Eagle $3,450Hermes crocodile Kelly bag $30,000 Bought by regular luxury buyers.


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Luxury sales & growth

World turnover in 2007: $233 bilPowerhouses of luxury consumptionUSA – largest, accounts for one thirdJapanChinaEurope

Growth in luxury markets

North America 2%Europe 12%Asia Pacific 18%


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Luxury in Asia

Cult of the Luxury Brand

Inside Asia’s Love Affair with luxury

Radha Chadha & Paul Husband

Luxplosion rocking Asia

94% of women in Tokyo in their 20’s have something from LVAsis is now the world’s biggest market for luxe37% in Asia + 15% by Asians abroadChina will be the biggest in 7 years

Luxury in India has become more accessible. Bollywood is an influencer


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Luxury model for Asia

Stage 1: Subjugation, desire based

Stage 2: Start of money, India

Stage 3: Show off, new rich, China

Stage 4: Fit in, Conformity, Joneses, Taiwan/Korea

Stage 5: Way of life, Japan, Hong Kong

India has gone from old money to new money

India could be in top 5 consumers by 2025


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The story in India

Luxury is not new to India but the modern form is yet to evolve

Branding

Lasting customers relations

Signature look

Virgin market


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The story in IndiaErmenegildo Zegna First store opened at Crossrads in 1999. Closed in 2005A 3000sqft store opened at Taj, Mumbai in 2007Third store to come up at EmporioHave taken a 51% ownership in Indian operations

Jimmy Choo

Name now synonymous with luxury shoes for women

Jimmy discovered, bought & guided by Tamara Mellon

Accessories editor at Vogue

Ten years later company valued at ₤185 million

Halle Berry, Hilary Swank and Helen Mirren on Oscar night

60 stores across the world

Launched India store through Murjani Group in Sep08

Located at Nariman Point, Mumbai

Worn by Aishwarya Rai, Preity Zinta

Internationally launching sunglasses, fragrances & handbags


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Louis Vuitton LV’s association goes back to the Maharaja’s for

luggage

First store opened in 2003 at Oberoi Hotel, New

Delhi

Second store opened in Mumbai in 2004

Now opened at Emporio

Staying away from apparel for India

Have taken 51% stake


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Online poll in 48 countries covering 25,000

consumers

Nielsen Survey on Luxury

InternationalGucci most coveted (one in five)

Chanel & Calvin Klein tied for second place

Followed by Louis Vuitton, Giorgio Armani, Christian Dior,

Versace India

57% see labels as status symbols

Most coveted;

Gucci (41%)

Calvin Klein (31%)

Dior (26%)

Versace (25%)

Armani (22%)


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The Sachdev Group – Priya Chatwal & Charu Sachdev

Brands: Lanvin, Alberta Ferretti, Jean-Paul Gaultier,

Moschino,

Stella McCartney

Promoters of Luxury in India

Genesis Colors Sanjay Kapoor of Satya Paul fame

Brands: Aigner, Canali, Kenzo, Paul Smith, Just Cavalli

Murjani Group Gucci, Jimmy Choo, Calvin Klein, Bottega Veneta

Brandhouse Retail (S.Kumar Group) Escada, Dunhill

JV’s in the pipeline DLF with Armani Hermes with Neelam Khanna (PRS Oberoi clan) Reliance Retail

TSG International Marketing Pvt Ltd


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The Indian Luxury Market & Industry

Over one million luxury consumers

Potential new customers: eight million

With high disposable income

Target audience: 22-55 years

Currently worth: US$444mil/Rs2,400cr

KSA Technopak India Luxury Trends Report


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Retailing of luxury

US: Fifth Avenue (NYC), Rodeo Drive (Los Angeles)

Germany: Konigsallee (Dusseldorf)

London: Bond Street

The luxury mile

IndiaThe Galleria (Mumbai)

Gucci, Bottega Veneta, Jimmy Choo

Emporio, Delhi

UB City, Bangalore

Taj Mahal shopping arcade, Mumbai

Louis Vuitton, Zegna, Fendi

Oberoi Hotel, Delhi

Louis VuittonSet to open:

Palladium (Mumbai) at Phoenix Mills


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Emporio

The first Indian luxury destination:

Officially inaugurated: Sunday, 30th Aug

Developer: DLF

130 luxury brands

Apparel: Dolce & Gabana, Canali, Louis Vuitton, Chistian Dior

Jewellery: Cartier, Harry Winston,

Leather Goods: Tods

Men: Paul Smith, Armani

Watches: Piaget, Chopard, Jaegar

Indian designers: Rohit Bal, Tarun Tahiliani, JJ Valaya


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Issues facing luxury in India

Lack of appropriate space

Adjacencies important – nightmare McDonald’s

Started with use of hotel space

Makeshift space in malls/markets

Emporio – perhaps the first luxury mall in India

Expensive real estate

Lack of trained manpower

Specialized programs in Institutes

Lack of Indian products & brands

FDI restrictions


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Scope for Indian brands

Can you think of an Indian luxury brand?

Acquiring Western brands: Tata acquires Jaguar from Ford in the UK

Oberoi hotels: Rajvilas, Udaivislas, Amarvilas

India’s strengths: excellence in craftsmanship, heritage, business potentialSome suggested areas: hotels & hospitality, spas, jewellery, meditation (Mahesh Yogi), art, Indian fashion


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Luxury Education Essec Business School, France

Most prestigious international course in luxuryOne year MBA program since 1995Student size: 30

IIM, AhmedabadTied up with Essec for new luxury programStudent size: 9

International University of Monaco 10month MSC program in management of luxury goods &

services cost: 12,000 euros

Stern School of Business, New York Since 2006


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Luxury Education

Columbia University, New YorkCourse in design & marketing of luxury goods

HEC Paris & Tsinghua Univ., BeijingSix month module

Pearl Academy, DelhiLuxury module as part of Fashion

Marketing


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