India: A challenge for luxury brands

How to sustain luxury and the industry it spawns may be a question worth pondering in these tumultuous times, but it is entirely a coincidence that New Delhi is hosting a high-profile conference on this theme right now.

The International Herald Tribune’s luxury conference — an annual feature hosted by the iconic Suzy Menkes, the IHT’s long-standing fashion editor, held in a different country each year — which opened on Tuesday in New Delhi, bang in the midst of a downturn that makes India something of both an opportunity and a challenge for the world’s leading luxury brands. But its timing, like we said, is somewhat of a happy chance.

 

In 2007, in Moscow, listening to speaker after speaker gush on about “Supreme Luxury”, the theme that year, about stupendous growth and mindboggling projections, particularly for Russia and other BRIC countries, “I had something of a flash,” says Menkes, in a chat with Business Standard. “I thought this cannot possibly go on forever.” Of course, you may argue that the feared and respected fashion writer had turned soothsayer.

The recession was nowhere on the horizon. India, on the other hand, had always been on Menkes’ personal radar ever since she came to the country “thirty years ago and did the poetic Jaisalmer with my husband”, revisiting many more times ever since, including at the various fashion weeks in recent times, rooting for Indian designers and craftsmanship, even though the country by itself still accounts for a very tiny presence on the luxury map of the world.

“I don’t think any one is looking at this becoming an important market at least for a very long time,” says Menkes. So, why are all thebig houses and CEOs, including those who will be speaking at the meet, trooping into the country, if all they want to focus on selling — at the moment — is just “small leather goods”? “That’s to win young hearts and minds, catch them small. When eventually, they (customers) will have the money, they will buy,” says Menkes.

The biggest challenge today is, of course, how to sustain the business of luxury. “It would be totally wrong to say that luxury hasn’t been affected with what has been happening with the rest of the world,” says Christian Blanckaert, executive vice-president, Hermes. He mentions, however, that fortunately there has been no globalisation when it comes to how badly the industry has been impacted.

So if Japan and Russia have completely fallen off the map, Europe has surprisingly resisted. “In France, Hermes grew by six per cent in 2008,” points out Blanckaert, who will be talking on “deep luxury” (as opposed to any one “who comes in today and says that he is setting up a luxury company”) at the meet. India, on the other hand, seems to be too insignificant a market just yet to talk numbers.

“We are still observing,” says Blanckaert, though he adds that the store that opened a couple of months ago at the Oberoi, New Delhi, is pretty much on track vis-à-vis earnings and this despite the fact that it opened up bang in the middle of the current downturn.

Blanckaert suggests “innovation” as one of the ways in which one can rise above the economic situation — the Hermes boutique in New Delhi, for instance, has new (and less expensive) lines of “innovative” scarves (70 cm X 70 cm, instead of the usual 90 X 90, innovative jewellery, where metal is fused with silk like in a wristband, and even bandanas, one of which Blanckaert plans to wear at the session tomorrow!