Storyboard18 | Pandemic didn't hurt sales of luxury brands in India. Here's why

#covid impact, #digital messaging, #luxe market, #luxury brands, #Storyboard18, #video assisted sales, Indian luxury market, Versace, Ralph Lauren, Ted Baker, Karl Lagerfeld, Madura Fashion and Lifestyle, Aditya Birla Nuvo Ltd, Fabergé, the company

Strategies like digital messaging and video assisted sales helped prop up sales of international luxury brands like Hermès and Armani in India. (Image: Shutterstock)

The pandemic might have restricted international travel but that hasn’t stopped the luxury connoisseur from picking up their favourite Hermès bag, Armani suit or M.F. Husain painting. Thanks to the extra attention to communication, customization and marketing strategies, luxury brand sellers have managed to push sales and drive growth throughout 2021.

With renewed focus on digital messaging and video-assisted sales, the Indian luxury market has grown in double digits.

The Collective, for instance, that retails over 100 international luxury brands, including Versace, Prada, Paul Smith, Ralph Lauren, Ted Baker, Karl Lagerfeld and others, in India, managed 3.5% growth in revenue in 2020 (against 2019).

Topical marketing with messages woven around the reality of the consumer has been the key focus for The Collective that is owned by Madura Fashion and Lifestyle, a division of Aditya Birla Nuvo Ltd.

“The reason why we could grow was because we managed to continue our relationship with our customers right from the beginning. From talking about our brands, our products to churning out music playlists for relaxation we’ve done it all for our customers,” says Amit Pande, brand head, The Collective and International brands.

Personalization of experiences 

The team also deployed PRMs. All of their top customers are assigned one personal relationship manager who has complete knowledge of the customer’s size, colour preferences, lifestyle, etc.

“With the PRM we could curate collections for each of our customers which they were given access to online. Once they liked a product they could check it out on the website and place orders. We made sure we delivered it to their homes irrespective of their location,” Pande adds.

The first such order through a personal relationship manager (PRM) in Delhi was placed from Visakhapatnam where The Collective doesn’t have a store. The Hugo suit the customer ordered was shipped to him from Mumbai.

Upbeat about growth, the brand is spending generously on digital advertising and is also on an aggressive expansion spree. The luxury retailer is exploring new geographies to expand and from 26 outlets presently they are looking at a 50-60 store network in the next two years.

However, it is not just The Collective that focused on pushing online sales and personalized services. Most other premium brands in the segment followed the same hack.

“During the initial days of the pandemic, we called our customers and if they wanted to try a product before purchasing, we made sure the services were activated. The customer experience was still kept at the maximum and it could not be at the storefronts so we planned to get it at the customer’s home,” says Tushar Ved, president, Major Brands (India) Pvt. Ltd that retails international brands like Charles & Keith, Aldo and now Victoria’s Secret in India. From a meagre contribution of 4% sales generation, digital sales have shot up to 30% for Major Brands.

Another fine jewellery brand Fabergé also took the same route. “From keeping our clients updated with individually tailored newsletters and stories, to hosting Zoom ‘By-Appointment’ meetings, we were able to continue the high level of service that our clients expect,” says Josina von dem Bussche-Kessell, Global Sales Director at fine jewellery brand Fabergé.

Luxury at home

Sales and revenue in the category have been more than impressive in periods of repeated lockdowns, curfews and travel restrictions.

According to financial data accessed by business intelligence platform, Tofler, for Christian Dior Trading India Private Limited the income from operations for the year ended 31 March 2021 stood at Rs87.3 crore (approx.) against the previous year’s income of about Rs57.1 crore.

The last numbers available from Louis Vuitton India Retail Pvt. Ltd show no reds. For the year ended 31 March 2020, the gross income of the company was Rs 285.52 crore as against Rs 245.29 crore in the previous year.

Turns out, according to market and consumer data experts Statista, revenue in the luxury goods market amounts to US$5,943m in 2021. The market is expected to grow annually by 8.03% (CAGR 2021-2025).

The numbers do not just indicate the growth of the brands in the country but also the spending capacity of the Indian luxury buyer.

According to the Knight Frank Wealth Report 2021, Asia topped their five-year UHNWI (Ultra High Net Worth Individuals) growth forecast with 39%, led by Indonesia at 67% and India at 63%.

The wealth growth forecasts in the same report predict India’s threshold in the category to almost double over the next five years.

Interestingly, the growing spending capacity is also pushing the price of luxury items. Especially artwork.

“There are more buyers than artworks available in the market,” says Lavesh Jagasia, founder and managing director at Dubai-based auction house Artiana.

“Since people stayed mostly indoors in the last two years they got a chance to introspect on how they’d want their homes to be.  Especially those who have an eye for exquisite artwork used the time to procure the rarest of rare works at premium price,” Jagasia says.

Artiana’s two biggest sales were to an Indian buyer who bought Sakti Burman’s artwork Reve for Rs 2.5 crore and Francis Newton Souza’s work Landscape with Tree for Rs4 crore.

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