Friday, March 2, 2012

Business Of [Indian] Fashion

Business Of Fashion, a trusted news source for fashion insiders, published their first column today on the growing luxury market in India. The column is written by Bandana Tewari and you can read more on her here.

The column (pasted below) is an interesting look inside India's booming retail market. Though it focuses more on the glitz and glam, I think the article is trying to communicate the opposite- i.e. that the glory is with the mass and not the elite. It's definitely the same road America took when Lauren and Hilfiger came onto the scene in the 80s. The lifestyle brand vs luxury is a great long-term opportunity in India and it seems to be searching for it's own Hilfigers.

MUMBAI, India — Atop Aer, a tony roof-top bar at the Four Seasons with a sweeping panorama of slumdog-Mumbai — a circuitous medley of high-rises and slums alike — the time at which you arrive for a “Worli Sunset,” a vodka and mandarin cocktail named after the neighbourhood, says a lot about you. If you are there at 6pm, you are part of the “cashmere crowd,” discreet business travellers, Jaipur-bound foreigners or seasoned locals unafraid to sit alone. Most are there to simply take in the perfect sunset over the Arabian Sea. They are judiciously dressed: on-the-go-chic, with statement necklaces perhaps, but no “killer heels.” The men are usually in natty slim pants and after-work swagger. After sunset they usually go home, or to dinner — often to Indigo for Mediterranean cuisine, Wasabi for Japanese or Hakkasan for foie gras dim sum.
This discreet-chic, cashmere crowd has been the cynosure of every international luxury brand targeting India. Soirees are hosted on a weekly basis to woo them. And with encouraging figures coming out of New Delhi’s Emporio Mall, a local benchmark, and the number of ultra high net worth individuals in India expected to triple by 2016, according to a recent report by CRISIL and Kotak Wealth Management, it certainly feels like the luxury market in India is finally set to take off.
There’s only one small hitch. The cashmere crowd loves shopping overseas. Indeed, when money ceases to be a differentiator — most of them are on their third home by now — it’s geography that becomes important. The same bag has that much more cachet if bought in a Milanese flagship, not a boutique in a local 5-star hotel, where dealing with security procedures like metal detectors and frisking has taken the shine out of shopping. Indeed, perhaps it’s time for fashion brands, both international and domestic, to look beyond the 6pm crowd.
Today, it’s the 10pm crowd that offers significant new opportunity. Mumbai’s ‘bridge-and-tunnel’ crowd, they come in droves from far-flung suburbs, rambunctious and revving to kill the night. Their infectious enthusiasm keeps the staff at Aer on their toes — and the cash counters clinking. They go in for super-size style aplenty: bags are big, heels are tall, and skirts ride high. It seems there is much to be talked about and spent. They’re not new money, they’re “new-new” money. Most of the high-rollers are out-of-towners from satellite cities like Ludhiana, Chandigarh and Kanpur that fringe bigger metropolises like Delhi, Mumbai and Bangalore. They usually leave when the bar shuts, around 2am, and left-over cocktails are poured into plastic cups for the road.
This crowd faces cantankerous traffic and snarling multi-hour drives in order to reach a watering hole in the city. But ask any luxury retailer and stories abound: of housewives from sprawling homes in Gurgaon, outside Delhi, and families, brides and grooms-to-be from Punjab, shopping for 7-day weddings, as well as stocking up on the kind of basic luxury goods their home-cities do not offer.
A recent KPMG study, commissioned by Pradeep Hirani, chairman and managing director of Indian fashion house Kimaya, to understand the buying patterns of Indian women, points to a gaping hole in the market. Even though they increasingly have a taste for the finer things in life, as well as the means to buy them, residents of India’s second- and third-tier cities are forced to travel out of their hometowns to buy premium or luxury branded goods. Failing that, “as a non-preferred alternative, they would invariably end up buying mass brands that, although affordable, were both non-exclusive and non-aspirational,” says the report. Even Indian designers have made few inroads into these uncharted territories, where demand for premium and more accessible luxury goods is growing rapidly. Hirani explains: “At one end were a few mass brands, with average price points of $30, and at the other end were designer labels with average prices around $400 dollars. But there was no brand that filled the void in between.”
Spurred by this observation, Hirani has recently launched a platform called Karmik that unites fashion concept with quality and accessible prices, not unlike H&M. With top Indian designers — including Rohit Bal, Anamika Khanna, JJ Valaya, Rocky S, Ranna Gill, Shantanu & Nikhil, Rina Dhaka, Gaurav Gupta and Kavita Bhartia — all set to design clothes, Hirani’s focus on volume and economies of scale will ensure this new breed of designer-wear is accessible to the “10pm crowd” in smaller cities. The product will have an average price point of $100 and be available in over 60 stores across the country. “This will revolutionise the way women shop in India,” says Hirani.
Karmik will launch with a fashion show set to take place during Lakme Fashion Week next week in Mumbai, where the participating designers will walk the runway along with their muses and models in tow.
Another figure who gets the 10pm crowd is the designer Manav Gangwani. He has a loyal and ever-growing clientele, not only in Bollywood, but in many of the smaller cities in India, which are fast becoming new epicentres of wealth. “My clients, whether they are from Ludhiana or London, want the best and they are not afraid of my bold, glamorous designs” says Gangwani.
It is no wonder, then, that Roberto Cavalli’s first foray into India — a store in New Delhi’s Emporio Mall is expected in May with a Cavalli CafĂ© to follow in July — will be in partnership with Gangwani. In India, it’s unprecedented for a local designer to be the franchisee for an international behemoth like Roberto Cavalli. And whilst the collaboration is surely based on sound business sense, one cannot help thinking how much foreign brands also stand to benefit from Indian designers who understand the real, “Middle India” customer-base in this country.

Read Business of Fashion here.

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