In India, Luxury Brands Need Localised Strategies

DLF Emporio, New Delhi | Source: DLF

DLF Emporio, New Delhi | Source: DLF

MUMBAI, India — According to Forbes, India has the fastest-growing population of millionaires in the world. But for Western luxury brands operating in the country, grabbing a piece of the market has proven more difficult than anticipated and many are in the process of re-conceiving their India strategies.

Part of the problem is that Western luxury brands don’t seem to understand Indian consumers. When they first entered India, they created splashy advertising campaigns targeting the old money elite. But the results were poor, largely because this customer segment consists of frequent international travelers who overwhelmingly prefer the experience of purchasing Western luxury goods abroad, where brands offer them wider choice, better service and more competitive pricing than what’s currently available inside India.

In response, brands are starting to refocus on new pockets of wealth emerging in regional hubs across the country. But a private report on luxury in India produced by management consultants AT Kearney and The Economic Times revealed that the newly affluent lack sufficient knowledge and awareness of luxury brands to drive significant sales. Furthermore, the current strategy of establishing a large retail footprint supported by traditional mass marketing is not working.

Indeed, in order to succeed in India, luxury brands need to localise their marketing strategies.  This goes further than just putting an Indian print on a bag or collaborating with a local celebrity. A multitude of cultures, languages, religions, festivals, colours and tastes make up this land of 1.1 billion people. So, it’s about understanding the difference between the flamboyant nature of a Punjabi customer and the more reserved nature of a Gujarati, and speaking to each of them in the specific cultural register that they respond to.

For example, luxury brand Montblanc — which successfully operates nineteen retail points across first, second and third tier cities in India — has regionalised all their marketing material.

“There is a clear distinction in customer values between [Indian] states,” says Tanya Kapinda of ID8 Media Solutions, an agency which works with Montblanc’s marketing division in India. “Any time a letterhead, invitation or a newsletter is produced, we customise [it] according to the local language and other aesthetic considerations such as colours used and the amount of decoration.”

When creating invitations for potential consumers in the Punjab in northern India, for example, the invitations are more lavish and the language more boisterous than those sent to consumers in southern India. “It ensures you are connecting personally to your consumer and customers respond to this,” she adds.

Brands like Louis Vuitton and Rolls Royce have also localised their approaches, identifying  important events and celebrations amongst potential clients and arriving with personalised gifts or a surprise car service for the occasion.

Getting traction in the Indian sub-continent has been a challenge for every Western luxury brand that has tried to crack this complex new market. Those brands who are willing to better understand and connect with the local Indian consumer will be the ones who are most successful.

Agata Seidel is a writer and consultant based in New York.

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  1. This is a very insightful article and a should be the start point for any western brand wanting to enter into India – it is important to build a strategy after sufficiently studying and understanding the nature of your consumer attitude… To just think that you can replicate an existing market strategy from another location and cut/copy/paste into a new market is obvious folly. Well written Agata!

    Megan Ryley from Mumbai, Mahārāshtra, India
  2. This is very accurate and highlights the issues that most of the international brands are facing in India. With the Indian consumer becoming increasingly affluent and brand-conscious it is important for these brands to form a connection fast or they’ll lose market share to other companies that are better-positioned to develop unique marketing (product/pricing/advertising & PR) strategies to win the Indian hearts and coffers!

    Sapna Shah from Jackson Heights, NY, United States
  3. hey agatha, that was an interesting insight. luxury brands needs to be localized!!! but arent the luxury brands supposed to serve niches. Will the localization affect the “luxury” image? and how could a brand like Louis Vuitton with products known for sophistication, localize..?

    Aathira G Krishna from Hyderabad, Andhra Pradesh, India
  4. World fashion is a complete contrast to the Indian subcontinent.
    thats calls for Indianised fashion forecast!!
    inspiration can be taken …but finally if these labels dont think Indian….they will obviously have no stand…!
    it will take decades before the Indian consumer evolves to international taste.!!
    thats exactly what we did in the firm i worked….for 6 yrs….INDIANISED FORECAST!!
    Get down to doing this……..and u crack a deal!!

    Marrgrit woud from Mumbai, Mahārāshtra, India
  5. Its very interesting to me that a luxury brands such dior, louis vuitton are working towards localizing their marketing approaches. As far as i can imagine, the people who are able to afford thier products are amongst the top earners who i would assume are very familiar with western lifestyle and culture through frequent travelling as the article mentions. Therefore, i would think that their target markets wouldn’t need these brands to indianize themselves (hiring sales rep who speak the local language and so on are obvious) to appeal to their taste. Montblanc’s example kind of surprised me as i thought these luxury brands would prefer to maintain a degree of consistency in the way they promote themselves to keep up an “elite” brand image. for example if chanel prints invitation cards that are all the colors of the rainbow, sparkly, and plain out loud just as how the punjabi culture is, it would totally take away from the essence of what the house of chanel is seen as around the world.

    Very interesting article.

    Jisha Alam from Brampton, ON, Canada
  6. very well analyised ,thus it makes perfect sense.i hope the luxury brands take their cue and do the need full at the earliest.

    jattinn kochhar from Delhi, Delhi, India
  7. A localized strategy may garner short-term interest, but for a brand to maintain its integrity, it must be true to its design aesthetic.

    Further, even in the short term, a blanket localization strategy can’t be applied to everyone. The ‘logo’ consumer who buys products which scream designer will probably take to this strategy. But the real design-conscious consumers will run a mile from it, hop on a plane to London or Paris where buying a Chanel 2.55 means being part of the Chanel ethos.

    Contrary to other emerging markets, India has a large and successful domestic design industry – it doesn’t need international luxury brands to offer the same thing at three times the price. In short, no one wants to walk into a Bottega Veneta boutique and feel like they’re on the sets of a Bollywood film.

    Hermès, however, has managed to walk the fine line between staying true to brand heritage and adding local elements with their Indian Fantasies campaign. That’s the sort of intelligent marketing that brands should think about vis-a-vis India.

  8. We need to see more collaborations across vreative sector – whether it is fashion or communications, there is a need to organise adn acknowledge the contribution of creative economies to the overall scene. Its not only foreign brands, even Indian designers struggle to market and brand themselves and improve their presence. We need more entrepreneurial thinking that works.

    British Council has an interesting initiative on this where they help UK and Indian creative entrepreneurs collaborate through an awards program.

    We need to see more of this and initiatives to promote teh idea of a creative economy.

    Aanchal from United States
  9. Excellent article Agatha. Very impressive. As someone from India who works in the fashion industry in the US, I agree that localization is critical to succeed in the Indian market. Most western brands fail to understand the Indian consumer and establish a connection in their minds. Flashy marketing campaigns are not enough for the Indian consumer who will spend money only if he/she relates to the brand very well regardless of the product. Collaborating with local designers and marketing campaigns that relate to the local cultures will help to show value and drive sales tremendously if executed well. Moreover, It is hard for western companies to change their design strategies because of the diversity in the Indian market and their willingness to adapt to Indian design needs will determine their success to a large extent.

    Sandeep from Atlanta, GA, United States
  10. People in india do not understand luxury and the way they understand luxury is something totally different for us indian its more of a status symbol then an investment… The only few brands they understand are LV GUCCI DIOR , More then half the people Think ZARA is a designer……non the less the luxury market should be targeted towards new money because people in india are getting brand conscious well definitely the old money is more of people who are traveling and do understand is used outside coz they have an idea of the 56 % tax that luxury brands bare to come into this country…….Montblanc has approached people in a very different way they have their add in papers placed correctly by this i mean they are in places where people visit a lot more like the brand is in your face…..but like i said its again bought because of the status symbol and people recognize the brand from before this is the old money again and now its easily available everywhere tho they have nothing customized i do get an invitation from them every time they have offers or some sale going on…………bottom line is they know these brands by their names but don’t understand where it comes from . What i feel is luxury brands are like wines you need to know how old they are where they originate from what grapes are used and what food should be consumed with it. its more of a mix and match . Women in india would buy LV’s worth thousands of euros or lakhs of rupees and then match it with a dress or a gown or clothes that are not even worth 200 euros…….

  11. I’m not sure what Chanel News’ future strategy is, but from what’s there at the moment I really don’t think it’s impressive at all, one blog posting per month is hardly embracing the web. I’m sure there is a lot of interesting things that happen at Chanel that could be made public to help reinforce the brand. (D&G site) seem to have done a rather good job of creating their own content site (and keeping it very fresh with new content almost every day), although a little heavy on the branding for my liking but, to me, it seems like they are c

  12. The montl blanc strategy of leveraging the most recognisable Indian face worldwide to market its pen to a global audience ,at the same time to commemorate the greatness of Gandhi and further associating with a noble cause by proceeds of sales going to the Mahatma gandhi foundation was a commendable idea, and kudos to a brilliant strategy, however in a country as diverse as ours luxury manufacturers should also keep in mind the political landscape, the cultural sensitivities , the legal frameworks within which they have to operate to successfully execute their strategies.

    shyam satish from Mumbai, Mahārāshtra, India
  13. International brands do have to rethink their strategies, as the mindsets are quiet different! They need to reach audiences in different ways, from Ad spreads in Magazines, to parties and events promotions as well as e-magazines & websites like Luxe Lore and Justdial- Lifestyle. It’s all about networking!

    Noel from Mumbai, Mahārāshtra, India
  14. Hi it is an interesting article,where in focus is Indian Luxury Consumer.The most important challenge for a Global ( European Luxury Brand ) is the Local Govt (INDIA) tariffs and other trade Barriers which are making the Retail Cost more than Duty Free Shops or Stores abroad.
    As most of us agree the Indian HNI GLOBE TROT quite frequently minimum 3 times year to maximum every month.Then they would like to shop their as the intangible are more appealing.

    Yashodhar Raju.

  15. The approach of the international brands needs to be beyond just the marketing strategy, but has to really encompass an understanding of the customers and their needs. The manner of marketing in India is very different and the nature of luxury apparel/accessories bought are probably quite different to the International market. For example, in India one can easily think of very expensive gifts being bought for wedding presents, while in the west these are not as common..
    The brands that are going to make an impact and be successful are the ones that adapt india completely and are able to identify with the local customer and offer an experience and products that really address the reason for the purchase.

  16. This is a great article. We blogged on a similar topic today as well. (in case your readers are interested)

    I’d be interested to know your opinion on when you think Indian born and bred brands will be able to take on and win western brands at home and then on their own turf. Do you think we’re 10 years away from this?

    Its also important to consider the level of quality which is required from the luxury brands when moving into new regions. I know some of my friends in Japan who meticulously examine products from western companies because they expect (and will only pay a premium for) absolute perfection.

    Richard Brooks from Gillingham, Medway, United Kingdom