Growth and Potential of International Luxury Fashion Brands Essay

This is to certify that the project entitled ? Growth and Potential of Luxury International Fashion Brands in India? is submitted towards the partial fulfillment of the program ? Master of Fashion Management‘ by Kanan Gupta. It is an original work done under my guidance and the results are based on the research done by her. Name of mentor: Mr. Kislay Kashyap Asst. Professor Department of MFM NIFT, Patna Date: 01-03-2012 Place: Patna 1|Page DECLARATION I, Kanan Gupta hereby declare that the project entitled ? Growth and Potential of Luxury International Fashion Brands in India? submitted towards, partial fulfillment of the program Master of Fashion Management is my original work and no part of the project has been copied from any other report or carried by someone else or has been submitted for any other degree/award. However, any material taken from any other published sources has been suitably referred and acknowledged at various places. Name : Kanan Gupta Roll no : 17 Batch : 2011-2013 Centre : Patna Date Place : 01-03-2012 : Patna 2|Page ACKNOWLEDGEMENT I owe my gratitude to many people who helped and supported me during the research and compilation of my project report. I would like to thank my mentor Mr Kislay Kashyap for approving my project and express my indebted gratitude for his guidance and suggestions at every stage of this report. My sincere gratitude is also due to my seniors for their constant encouragement and support. I would like to express my thanks to all those people who were directly and indirectly involved in shaping my project by providing valuable information and co-operation. 3|Page EXECUTIVE SUMMARY INTRODUCTION: This is a project to study about the ? Growth and Potential of Luxury International Fashion Brands in India?. If we look into the past, no one could imagine that a luxury market would exist in India. But over the years with the change in the demographics of the Indian consumer and with higher disposable income available, the luxury market in India has indeed emerged as one of the fastest growing markets in the retail segment. PROBLEM DEFINITION: The Indian Luxury Market is still a niche market and people have got a very low personal disposable income, though it has increased a lot from before but not so much to afford international luxury fashion brands and the people who have got a high disposable income lack enough knowledge about the international fashion brands available in India as the luxury international stores are limited to metropolitans only. 4|Page OBJECTIVE: The main objectives of the projects are ? Analyze the Luxury Brand Awareness among the Indian consumers. ? Reasons behind customers buying Luxury fashion Brands ? Analyze the major international fashion brands in India. ? To analyze the Current Scenario and the Growth of Indian Luxury fashion brands and the Market. RESEARCH METHODOLOGY: ? The secondary research is through Magazines, journals, articles and internet. ? Primary research through focus group interview with industry personnel, customers. HYPOTHESIS: ? Assuming that there is a strong scope for the growth of international luxury fashion brands in India. ? Taking an assumption that Luxury fashion brands do not have much scope in the Indian market. 5|Page CONTENTS Ch. No. 1. 0 2. 0 3. 0 3. 1 3. 2 3. 3 3. 4 3. 5 3. 6 3. 7 4. 0 4. 1 4. 2 4. 3 5. 0 5. 1 5. 2 5. 3 5. 4 6. 0 7. 0 8. 0 9. 0 9. 1 9. 2 Chapter Name Objective Research Methodology Literature Review Introduction India at Glance Geography People Understanding Luxury Defining Luxury Socio Economic Significance of Luxury Acquainting with Luxury Fashion Brand Major Difference between Regular Brands and Luxury Brands Persona of Indian Luxury Industry Famous Luxury Brands and their destination in India SWOT Analysis Major Problems Faced by Luxury Fashion Industry Growth and Potential of Luxury Brand Growth of Indian Luxury Market Luxury Fashion Branding Strategies Final Summary Primary Research Findings Annexure Questionnaire Bibliography Page No. 7 8 9 9 9 11 13 14 15 16 17 21 23 26 31 32 33 35 39 41 43 54 56 56 58 6|Page 1. 0 OBJECTIVE: The main objectives of the projects are ? Analyze the Luxury Brand Awareness among the Indian consumers. ? Reasons behind customers buying Luxury fashion Brands ? Analyze the major international fashion brands in India. ? To analyze the Current Scenario and the Growth of Indian Luxury fashion brands and the Market. 7|Page 2. 0 RESEARCH METHODOLOGY: ? Secondary research through Magazines, journals, articles and internet. ? Primary research through focus group interview with industry personnel, customers. 8|Page 3. 0 LITERATURE REVIEW 3. 1 INTRODUCTION: If we look into the past, no one could imagine that a luxury market would exist in India. But over the years with the change in the demographics of the Indian consumer and with higher disposable income available, the luxury market in India has indeed emerged as one of the fastest growing markets in the retail segment. Through this report I have tried to give an estimate of the luxury retail market in India, how much it has penetrated and also how much it is likely to grow. Also I have tried to specify various factors that are crucial for the success of luxury brands in India. While doing out research on this project I have come across many new findings. The role the Indian market plays in the global scenario and the position of India vis-a-vis other countries. Also I understood about the duties and legal requirements for this segment. I have tried my level best to cover all the aspects in regard to my research. India today is fast becoming a new world of modern luxury. The country now teems with luxurious international brands, spurring the ascent of an Indian luxury market. One does not need to travel abroad to shop for luxury. Luxury goods and services sit aplenty right at home. Indians, however, have to realize such, be informed where to avail of them, and be convinced of the convenience and ease of access to these luxury goods and services. In the same vein, foreigners can also visit India to shop for same luxury. India can very well be placed on the global luxury-shopping map. There is, therefore, a huge opportunity to pump prime the luxury market field in India. 9|Page 3. 2 INDIA AT GLANCE: FOCUS : Study about India and its habitats. India is one of the oldest civilizations in the world with a kaleidoscopic variety and rich cultural heritage. It has achieved all-round socio-economic progress during the last 60 years of its Independence. India has become self-sufficient in agricultural production and is now the tenth industrialized country in the world and the sixth nation to have gone into outer space to conquer nature for the benefit of the people. It covers an area of 32,87,2631 sq km, extending from the snow-covered Himalayan heights to the tropical rain forests of the south. As the 7th largest country in the world, India stands apart from the rest of Asia, marked off as it is by mountains and the sea, which give the country a distinct geographical entity. Bounded by the Great Himalayas in the north, it stretches southwards and at the Tropic of Cancer, tapers off into the Indian Ocean between the Bay of Bengal on the east and the Arabian Sea on the west. Lying entirely in the northern hemisphere, the mainland extends between latitudes 8 °4? and 37 °6? north, longitudes 68 °7? and 97 °25? east and measures about 3,214 km from north to south between the extreme latitudes and about 2,933 km from east to west between the extreme longitudes. It has a land frontier of about 15,200 km. The total length of the coastline of the mainland, Lakshadweep Islands and Andaman& Nicobar Islands is 7,516. 6 km. 10 | P a g e 3. 3 Geography: Location: The Indian peninsula is separated from mainland Asia by the Himalayas. The Country is surrounded by the Bay of Bengal in the east, the Arabian Sea in the west, and the Indian Ocean to the south. Geographic Coordinates: Lying entirely in the Northern Hemisphere, the Country extends between 8 ° 4? and 37 ° 6? latitudes north of the Equator, and 68 °7? and 97 °25? longitudes east of it. Indian Standard Time: GMT + 05:30 Area: 3. 3 Million sq km Telephone Country +91 Code: Border Countries: Afghanistan and Pakistan to the north-west; China, Bhutan and Nepal to the north; Myanmar to the east; and Bangladesh to the east of West Bengal. Sri Lanka is separated from India by a narrow channel of sea, formed by Palk Strait and the Gulf of Mannar. Coastline: 7,516. 6 km encompassing the mainland, Lakshadweep Islands, and the Andaman & Nicobar Islands. 11 | P a g e Climate: The climate of India can broadly be classified as a tropical monsoon one. But, in spite of much of the northern part of India lying beyond the tropical zone, the entire country has a tropical climate marked by relatively high temperatures and dry winters. There are four seasons – winter (December-February), (ii) summer (March-June), (iii) south-west monsoon season (June-September), and (iv) post monsoon season (October- November). Terrain: The mainland comprises of four regions, namely the great mountain zone, plains of the Ganga and the Indus, the desert region, and the southern peninsula. Natural Resources: Coal, iron ore, manganese ore, mica, bauxite, petroleum, titanium ore, chromite, natural gas, magnesite, limestone, arable land, dolomite, barytes, kaolin, gypsum, apatite, phosphorite, steatite, fluorite, etc. Natural Hazards: Monsoon floods, flash floods, earthquakes, droughts, and landslides. Environment – Current Issues: Air pollution control, energy conservation, solid waste management, oil and gas conservation, forest conservation, etc. Environment – International Agreements: Rio Declaration on environment and development, Cartagena Protocol on biosafety, Kyoto Protocol to the United Nations Framework Convention on climatic 12 | P a g e change, World Trade Agreement, Helsinki Protocol to LRTAP on the reduction of sulphur emissions of nitrogen oxides or their transboundary fluxes (Nox Protocol), and Geneva Protocol to LRTAP concerning the control of emissions of volatile organic compounds or their transboundary fluxes (VOCs Protocol). Geography – Note: India occupies a major portion of the south Asian subcontinent. 3. 4 PEOPLE: Population: 1,21,01,93,422 Decadal Population Male: 9,15, 01,158 Growth: Female: 8,99, 54, 828 Density of Population: 382 per sq. km. Sex Ratio: 940 per 1000 males Nationality: Indian All the five major racial types – Australoid, Mongoloid, Europoid, Caucasian, and Negroid find representation among the people of India. Ethnic Groups: 13 | P a g e Religions: Hindus constituted the majority with 80. 5 %, Muslims came second at 13. 4%, followed by Christians, Sikhs, Buddhists, Jains, and others. Languages: There are 22 National Languages have been recognized by the Constitution of India, of which Hindi is the Official Union Language. Besides these, there are 844 different dialects that are practiced in various parts of the Country. Literacy: Persons: 77,84,54,120 Males: 44,42,03,762 Females: 33,42,50,358 GDP: Nominal GDP stands at US$1. 53 trillion as per 2010 census 3. 5 UNDERSTANDING LUXURY AND AQUAINTING WITH LUXURY FASHION BRANDS: FOCUS : Getting introduced to the term ? LUXURY? Luxury, derived from the Latin word luxus, means indulgence of the senses, regardless of cost. Luxury is something that everyone wants but nobody needs, its an area of huge comfort and the best of the best. 14 | P a g e A luxury brand is a brand for which a majority of its products are luxury goods. It may also include certain brands whose names are associated with luxury, high price, or high quality, though few, if any, of their goods are currently considered luxury goods. The luxury sector targets its products and services at consumers on the top-end of the wealth spectrum. These self-selected elite is more or less price insensitive and chooses to spend their time and money on objects that are plainly opulence rather than necessities. For these reasons, luxury and prestige brands have for centuries commanded an unwavering and often illogical customer loyalty. 3. 6 DEFINING LUXURY: The concept of luxury has been present in various forms since the beginning of civilization. Its role was just as important in ancient western and eastern empires as it is in modern societies. With the clear differences between social classes in earlier civilizations, the consumption of luxury was limited to the elite classes. It also meant the definition of luxury was fairly clear. Whatever the poor cannot have and the elite can was identified as luxury. With increasing ? democratization‘, several new product categories were created within the luxury markets that were aptly called – accessible luxury or mass luxury. This kind of luxury specifically targeted the middle class (or what is sometimes termed as aspiring class). As luxury penetrated into the masses, defining luxury has become difficult. In contemporary marketing usage, Prof. Bernard Dubois defines ? luxury‘ as a specific (i. e. higher-priced) tier of offer in almost any product or service category. However, despite the substantial body of knowledge accumulated 15 | P a g e during the past decades, researchers still haven‘t arrived on a common definition of luxury. Many other attempts have been made to define luxury using the price-quality dimension stating higher priced products in any category is luxury. Similarly, researchers have used the uniqueness aspects of luxury too. Prof. Jean-Noel Kapferer, takes an experiential approach and defines luxury as items which provide extra pleasure by flattering all senses at once. Several other researchers focus on exclusivity dimension and argue that luxury evokes a sense of belonging to a certain elite group. 3. 7 SOCIO ECONOMIC SIGNIFICANCE OF LUXURY: Several manufactured products attain the status of â€Å"luxury goods† due to their design, quality, durability or performance that are remarkably superior to the comparable substitutes. Thus, virtually every category of goods available on the market today includes a subset of similar products whose â€Å"luxury† is marked by better-quality components and materials, solid construction, stylish appearance, increased durability, better performance, advanced features, and so on. As such, these luxury goods may retain or improve the basic functionality for which all items of a given category are originally designed. There are also goods that are perceived as luxurious by the public simply because they play a role of status symbols as such goods tend to signify the purchasing power of those who acquire them. These items, while not necessarily being better (in quality, performance, or appearance) than their less expensive substitutes, are purchased with the main purpose of displaying wealth or income of their owners. These kinds of goods are the objects of a socio-economic phenomenon called conspicuous consumption and commonly include luxury vehicles, watches, jewelry, designer clothing, yachts, as well as large residences, urban mansions, and country houses. 16 | P a g e 4. 0 AQUAINTING WITH THE LUXURY FASHION BRANDS Luxury fashion brands have often been associated with the core competencies of creativity, craftsmanship, precision, high quality, innovation, & premium pricing. These product attributes give the consumers the satisfaction of not only owning expensive items but the extra-added psychological benefits like the esteem, prestige and a sense of a high status that reminds them and others that they belong to an exclusive group of only a select few, who can afford the pricey items. The luxury sector targets its products and services at consumers on the top-end of the wealth spectrum. These self-selected elite are more or less price insensitive and choose to spend their time & money on objects that are plainly opulence rather than necessities. For these reasons, luxury and prestige brands have for centuries commanded an unwavering and often illogical customer loyalty. 17 | P a g e Luxury has never been something easy to define; yet this mystery concept is something highly desired by one & all alike. I look at delving deeper into this mystery and aura of luxury goods by way of comparing them against ? regular goods‘ as well as highlighting the characteristics of the luxury industry. But before beginning with that, lets first attempt to understand some common terms associated in the world of high-end goods. Luxury and Prestige brands such as Rolex, Louis Vuitton and Tag-heuer represent the highest form of craftsmanship and command a staunch consumer loyalty that is not affected by brands. These brands create and set the seasonal trends and are also capable to pulling all their consumers with them wherever they go. 18 | P a g e Premium brands are those brands like Polo, Ralph Lauren, Versace and Tommy Hilfiger that aspire to be luxury and prestige brands but their marketing mix strategies are more attuned to a mass market, albeit a luxury mass market. They also termed as mass Premium brands or luxury brands. Fashion brands are those that address the masses. LVMH (Louis Vuitton Moet Hennessy) is the largest luxury good producer in the world with over fifty brands, including Louis Vuitton, the brand with the world’s first designer label, other famous fashion brands are Chanel, Gucci etc. 19 | P a g e Luxury is a Hub of Business Luxury brands take the elements they feel passionate about, add design then develop it and present it to the customers that exceed their expectations. A luxury good is a product at the highest end of the market in terms of quality and price. Classic luxury goods include haute couture items such as clothing, accessories and luggage. However, many markets have a luxury segment including for instance, cars, wine and chocolates. Such brands share characteristics like consistent premium quality, a heritage of craftsmanship, a recognizable style or design, a limited production run of any item to ensure exclusivity, an element of uniqueness and an ability to keep coming up with new designs when the category is fashion-intensive. Keeping it simple and realistic, luxury is anything and everything that you may truly desire; it can be short lived or a life long desire – it is ? your‘ emotional connect and reward that allows it to appear as luxury. 20 | P a g e 4. 1 MAJOR DIFFERENCES BETWEEN REGULAR BRANDS AND LUXURY BRANDS: FACTOR REGULAR GOODS LUXURY GOODS Available at posh, PLACE Available at convenience and according to the product category exclusive and selected locations ? Highly customized or ? Multiple mass variances but PRODUCT standardized. ? Service levels range from low to high. limited editions of products. ? Very high personnel service. PRICING Value for money Premium pricing ? Pre- ? All kinds of media (ATL, BTL) used. ? Product functional and aspirational PROMOTION value appeals. ? All kinds of reference group appeals used. dominantly premium above the line media. e. g. Connoisseur, Magazines, 21 | P a g e Travel media) ? Products have the exclusive appeal. ? Mostly celebrity appeals. Luxury goods are Those goods for which demand is inversely proportional to price. also called as Veblen‘s goods, the demand for the product is said to increase with the increase in price. ECONOMIC DEFINITION BRAND EXTENSION DECISIONS Based on defending your turf. (R&D based decisions to an extent). Based on marketing the luxury brand. DRIVERS OF BRANDS Functional attributes and innovation. Tradition and brand heritage. Source: Luxury Marketing, Samit khanna- IIM-A 22 | P a g e 4. 2 PERSONA OF INDIAN LUXURY INDUSTRY: FOCUS : Understanding the characteristics of luxury brands. CHARACTERISTICS OF INDIAN LUXURY INDUSTRY: 1. THE MEANING OF LUXURY HAS CHANGED: Luxury has moved from its ? old‘ meaning of ownership (also known as conspicuous consumption – Conspicuous consumption is a term used to describe the lavish spending on goods and services that are acquired mainly for the purpose of displaying income or wealth rather than to satisfy a real need of the consumer. In the mind of a conspicuous consumer, such display serves as a means of attaining or maintaining social status. Invidious consumption, a necessary corollary, is the term applied to consumption of goods and services for the deliberate purpose of inspiring envy in others) of objects to the ? new‘ meaning of the experience / fulfillment derived from possessing a certain object. 2. LUXURY MEANS DIFFERENT TO DIFFERENT PEOPLE: Luxury has no certified origins. But luxury branding is said to have taken birth in the west with the appearance of high-end brands. But there is still no definite meaning of luxury, for someone luxury can be a necessity and vice-versa. If one can think a luxury brand is really cheap, its not necessary that the other person also will think the same way. Luxury is yet to be defined, it totally differs from person to person. 23 | P a g e 3. LUXURY IS A PRODUCT CATEGORY IN ITSELF: This can be best clarified by the fact that both an expensive watch and an apparel can be considered to be luxury items. Therefore, all luxury marketers are not just competing in their ? technically defined‘ product categories (like manufacturers of televisions compete among themselves) but for the wallet share of luxury goods in total. 4. CLASSIFICATION OF LUXURY CONSUMERS: SRI Consulting Business Intelligence places consumers in 3 groups according to what luxury means to them: Luxury is Indulgence – This group is the smallest of the three and tends to include younger consumers and slightly more males than the other two groups. Their purpose for luxury goods is to lavish themselves in self-indulgence. They are willing to pay a premium for goods that express their individuality and make others take notice and are not overly concerned with product longevity or possible criticism. They enjoy luxury for the way it makes them feel, therefore have a more emotional approach to purchases. They respond well to messages that highlight the unique and emotional qualities of a product. Luxury is Reward – These consumers tend to be younger than the first group but older than the third. They use luxury goods as a status symbol to say ? I‘ve made it! ? They are motivated by their desire to be successful and demonstrate this to others. Luxury brands that have widespread recognition are popular, however they don‘t wish to appear lavish or hedonistic in their appearance. They want to purchase ? smart? luxury that demonstrates importance while not 24 | P a g e leaving them open to criticism. Marketing messages that communicate acceptable exclusivity resonate with this group. Luxury is Functional – these consumers tend to buy luxury products for their superior functionality and quality. Consumers in this segment, the largest of the three, tend to be older and wealthier and are willing to spend more money to buy things that will last and have enduring value. They buy a wide array of luxury goods, from artwork to vacations, and conduct extensive prepurchase research, making logical decisions rather than emotional or impulsive. Messages that highlight product quality and are information-intensive are powerful with this group. 5. CUSTOMER LOYALTY IS MORE IMPORTANT THAT BRAND AWARENESS: Rather than focus on measuring the brand awareness of a luxury company, measuring customer loyalty is far more significant a metric regarding the success or failure of corporate strategy to connect with the luxury consumer. 6. CERTAIN FACTORS WHICH PLAY A N IMPORTANT ROLE: In luxury marketing there is a subtle interplay between three factors that most strongly influence the luxury consumer to buy: product brand; dealer or store’s brand or service providers’ reputation; and price/value relationship. 25 | P a g e USERS OF LUXURY BRANDS IN INDIA: ? CEOs and other senior professionals (in their thirties and early forties) ? Entrepreneurs in new businesses ? â€Å"Prodigal children† ? Actors and models ? Franchisees, and small and medium Retailers 4. 3 FAMOUS LUXURY BRANDS AND THEIR DESTINATIONS IN INDIA FOCUS : To evaluate about all the famous luxury brands available in India and the places where they are available. UB CITY- THE COLLECTION, BANGALORE: UB City is the biggest commercial property project in Bangalore, India. Pioneered by the chairman of UB Group, Dr. Vijay Mallya , it is built on 13 acres (53,000 m2) of land and hosts 1,000,000 sq ft (93,000 m2) of high-end commercial, retail and service apartment space. UB City has four towers namely, UB Tower (19 Floors), Comet (11 Floors), Canberra (17 Floors) and Concorde (19 Floors). UB City has four towers namely, yelahanka. The later three towers are all named after aircraft. UB City will house the Group offices under one roof – UB Tower. Concorde & Canberra will have retail space on the lower floors and office space in the higher levels, while Comet will have serviced apartments. It will house commercial offices, banks, high-end retail stores, a five star hotel, 26 | P a g e serviced apartments, restaurants, food courts, pubs, health clubs and cafes. Multi-level parking areas will offer virtually unlimited parking spaces. Also on the blueprint is an amphitheatre with food courts and landscaped gardens. UB City will provide parking space for over 1,100 cars. Being an environment friendly project and keeping in mind the green surroundings of Cubbon Park, one-third of the space has been earmarked for landscaped gardens. An elevated roof top helipad will provide a five-minute aerial commute to the airport. Four storeys of multi level parking, in addition to one common basement for the entire UB City and extensive surface level car parks, will provide UB City the remarkable prospect of offering literally unlimited car parking space. BRANDS AVAILABLE AT UB CITY-THE COLLECTION: ? Louis Vuitton ? Alfred Dunhill ? Estee lauder ? Mont Blanc ? Zimson ? Rolex ? Canali ? Salvatore Ferragamo ? Paul Smith ? Lladro ? Versace ? Corneliani ? Burberry ? Jimmy Choo ? Diesel 27 | P a g e DLF EMPORIO, NEW DELHI- DLF Emporio has been designed as a name synonymous with luxury – offering a unique shopping experience where the accent is on exclusivity, space and aesthetics. There is simply no other place where such a wealth of designer and premium merchandise, lifestyle products and services are showcased under one elegant roof. The nuances of luxurious serenity are going to be expressed at DLF Emporio in a way found only in the fashion capitals of the world, offering just the right kind of tasteful and sublime ambience to attract high value spenders. 28 | P a g e DLF EMPORIO RETAIL MIXGreat care is being taken to ensure that the global retail community at DLF Emporio is the most premium. Only the finest signature brands, designer labels and high end lifestyle products co-exist here. Some of the brands in DLF Emporio include Giorgio Armani, Salvatore Ferragamo, Louis Vuitton, Cartier, Fendi, Dior, Just Cavali, DKNY, Tods, Burberry, Hugo Boss to name a few. ESSENTIAL PLAYERS OF THE LUXURY MARKET IN INDIA: ? JEWELLERY- Cartier, De Beers, Tiffanys etc. ? CLOTHING- Louis vuitton, Varsace, Armani, Chanel, Gucci etc. ? ACCESSORIES- Fendi, Jimmy Choo, Ferragamo Salvatore etc. ? AUTOMOBILES- Mercedes, Volvo, BMW, Volkswagen, Nissan, Audi etc. 29 | P a g e 30 | P a g e 5. 0 SWOT ANALYSIS: FOCUS : To do the swot analysis and ascertain the major problems faced by the international fashion brands in India. STRENGTH WEAKNESS 1. Brand Name/Brand Ambassadors 2. Customer Loyalty 3. Quality 4. Global Presence 1. Concentrated Market-only metro cities 2. Government Regulations 3. High Prices 4. Percentage of target audience is Less 5. Higher Operational cost-rents. OPPORTUNITY THREATS 1. Manufacturing the brands in India 1. Fake branded stuff available in India itself rather than importing it 2. FDI Regulations 3. Globalization 2. Available at cheaper prices abroad 31 | P a g e 5. 1 MAJOR PROBLEMS FACED BY THE LUXURY FASHION INDUSTRY- 1. LACK OF AWARENESS OF BRANDS AMONGST INDIAN CONSUMERS: The Indian consumers are not aware of the brands available in India, Most rich people who can afford the luxury brands either live in smaller towns and cities where there is no outlet or awareness of the brands. 2. PREFERENCE OF BUYING FROM FOREIGN COUNTRIES: People who are aware of the brands and live in metro cities and have a higher disposable income prefer buying from abroad as they travel a lot and so they prefer buying from abroad itself as they get a better and wide variety of products with lesser prices. 1. DUPLICATION AND KNOCK-OFFS: There are a lot of duplicate and knock-offs available in the Indian market. Most of these products come from China. The same branded product, which is available for 25000 Rs. , is available for 1500 Rs. When it is not authentic. Though the quality of these products is not good, they appear to be the same and hence people don‘t mind buying them. But people in India do not believe in authenticity, if they see the name and the knock-off looks exact, they buy that item as they believe in showing off. 32 | P a g e 2. LACK OF RETAIL SPACE: The luxury retail stores are located in 5 star hotels or malls in selected cities, as we all know that there are only two luxury malls in India, The collection-UB City, Bangalore and the DLF-Emporio Mall, New Delhi, because that is where the potential customers are most likely to come for shopping, hence the feasible space available is very less. 3. LOW CUSTOMER TURNOVER: The number of customers who visit a luxury store is comparatively lower than a regular store. Also the luxury store outlets are located exclusively in certain areas and are sometimes not accessible by everyone, this factor also affects the customer turnover. 4. HIGH OPERATIONAL COST: The cost of operating a luxury outlet is high because the size of the store has to be elaborated and also it has to locate at a prime location in major cities. Due to the image that is associated with luxury products, the cost of maintaining the store is high because it has to look upbeat all the time. At the same time these stores normally situated in 5 star hotels or big shopping malls where the rents charged are very high and hence the cost is further increased. 5. 2 GROWTH AND POTENTIAL OF LUXURY BRAND: FOCUS : Study about the roots and the growth of the luxury market of India. LUXURY is no stranger to India. The erstwhile maharajas and princes led a life of opulent splendor. The only way to be apart of the elite as to be born into it. 33 | P a g e The lifestyle as also associated with hunting, polo and her games of the rich. New money could never get into this circuit. The aspiration was always there. But the princes operated in a different league altogether. The era of the selfmade millionaire was yet to arrive. So small possessions, or copied fashion designs with a few geegaws thrown in, became the height of luxury. An achiever of the 1970s could only get by with a good foam mattress — no Omega, Rolex or BMWs. This trend saw a shift, a gradual one, in the 1980s. Luxury began creeping into upper class homes through small things and symbols. The colour TV came in, the humble pen was elevated to a Parker, successful self-made people began to be featured in magazines. The concept of luxury as a reward for achievement gained acceptance, though royalty and the aristocracy continued to remain the benchmark of the elite. The real change came in the 1990s when more people started making more money. There was a sudden explosion of colour and things and objet D’arts began to appear. In order to gain access to luxury and class one could just go out and charge it. What contributed to this shift? India opened up to the world. The liberalization process brought more than high economic growth rates. It showed the people what was possible. In the process, it has altered mindsets. The IT revolution, and the consequent demand for Indian brainpower, has created a whole new breed of wealthy global Indians. At the other end, an increasingly open economy has created new b