One luxury brand plans to gain a foothold in India in the most convincing way - by connecting through culture directly.
India gets Hermès sari
It seems, on the face of it, like a dreadful case of taking coals to Newcastle.
Next month, on October 7, the French luxury brand Hermès is to launch a limited edition of its first Indian sari in Mumbai. Sari? In the land of the sari? In a country where many women can identify, from 50 feet and in poor light, the exact weave, region of provenance, perhaps even the mood the weaver was in when he made it?
What may seem recklessly foolish is, in fact, a belated recognition by Hermès that the Indian woman's attachment to her traditional clothes and cultural identity is so strong that she will not accept anything blindly, no matter how globally famous the brand. It has to "connect" in some way with her traditions and those traditions dictate that, on formal occasions, she should wear a sari, not western clothes.
"We want to be part of the life of India, to meet Indian culture," said Bertrand Michaud, the regional managing director of Hermès. "Our sari is not a marketing tool, it is a tribute to Indian culture and elegance."
The idea of a "Hermès sari" is, for Radha Chadha, managing director of Chadha Strategy Consulting in Dubai, a master stroke.
"It's delightful," she said. "It's like saying 'namaste' to India in its own language."
The 25 Hermès saris, made of cashmere, twill silk and mousseline changeante, have been created in Paris and are priced at US$2,000 (Dh7,350). They may not be a marketing tool as Michaud insists but they demonstrate a new awareness by the luxury brands, which have not seen the kind of growth in India that they have experienced in China or Russia, of the need to cater to the specific needs of the discerning and often finicky rich Indians.
With an economy roaring along and a surplus of millionaires, India was expected to be a no-brainer for the luxury brands. Yet it accounts for only half a per cent of the global luxury market at $846 million. China, by comparison, accounts for 10 per cent of the global market at $17 billion.
The big brands came to India expecting explosive growth. Instead, they have been forced to wait. Several factors have thwarted their hopes. For one, there is no Bond Street, Fifth Avenue or Ginza in India where they can open shop. In an "ordinary" shopping area, they may end up next to a McDonald's or a Pizza Hut, which is not quite the location they deem desirable.
In a country where the pot-holed road to a five-star hotel may be littered with rubbish, the luxury brands have found it hard to provide a self-indulgent retail experience.
Given the absence of a fashionable, upmarket place, they have confined themselves to small outlets in five-star hotels or the two dedicated luxury malls in New Delhi and Bangalore in south India.
Mumbai, oddly enough, has no luxury mall, despite being the commercial capital and the home of Bollywood. The small size of the shops in the luxury hotels has meant that they cannot stock as much variety as in their stores elsewhere.
For another, India's import duties of 30 per cent make the prices of the same goods high. Many affluent Indians who travel frequently prefer to shop abroad for their luxury goods because of the price, the greater variety and the generally more enjoyable experience.
The habit of shopping on overseas trips dates back to the days before India's economic reforms, when there was hardly anything worth buying. Anyone going abroad used to be presented with a long list of items to bring back, ranging from lipstick and chocolates to perfume.
"Maybe the younger generation will be different but for my generation, the habit of shopping abroad is just too strong," said the Mumbai socialite Arti Surendranath. "Psychologically, you feel they'll have the latest stuff and it's more fun there. And when you've shopped abroad, why buy here?"
Research has shown that Indians love to shop on holiday, unlike westerners who prefer to relax. "The first thing they ask about any destination is the shopping, not the sights," said Prakash Verma, a New Delhi tour operator.
You can see the struggle to sell if you visit either of the luxury malls on most days. They tend to be deserted, with shop assistants outnumbering customers. "We consider it a good day if we sell two handbags," said a shop assistant in Delhi's luxury mall, DLF Emporio.
The solution that some brands have come up with is to cater to Indian tastes. This was possibly pioneered by the Spanish company Lladro, which produced limited-edition porcelain figures of the popular Hindu god Ganesh some years ago, instantly elevating a routine object found in millions of homes into an exclusive and prized possession.
Canali, the Italian men's fashion brand, has a special jacket inspired by the "bandhgala": a formal and smart high-collared jacket worn by sophisticated Indian men at weddings and formal occasions and India's answer to the tuxedo. This is an India-specific product custom-made for India and it has done really well.
Then there is the limited-edition clutch bag by Bottega Veneta. The Bottega signature weave has been blended with conventional Indian embroidery and adorned with the word "India" on a sterling silver plate inside the clutch. Mumbai's society queens and celebrities stumbled over their Jimmy Choo's to grab one.
Customised goods make sense in this market because Indians enjoy a long tradition of handmade and handcrafted objects. Men and women generally go to their own tailors for bespoke outfits. An Indian woman would not be seen dead in the same sari as someone else.
Even jewellery tends to be custom-made, with jewellers making home visits for leisurely discussions over cardamom-flavoured tea on individual designs. The maharajas, who set the gold standard for opulence and excess, never used to merely accept whatever a Louis Vuitton or a Cartier had already made; they had pieces made to order that were unique. Indians who have made their own fortunes since the economic reforms of 20 years ago have continued this tradition.
Tailoring products to suit Indian tastes and keeping them exclusive is only a partial solution to sluggish growth, according to Arvind Singhal of the New Delhi retail consultancy firm KDA Technopak. He believes that, by staying inside their five-star "ghettoes", the luxury brands have failed to understand Indian psychology.
Singhal says they fail to realise that in India, luxury coexists with squalor.
"The mansion of India's richest man, Mukesh Ambani, may be right next to a slum but neither he nor the slum dwellers are upset about this. That's how things are. It's not like Sao Paulo where you need armed guards to go through a slum area. If rich Indians are comfortable with this juxtaposition, why do they stay away, feeling their brand will be devalued by being displayed in such areas?" he said.
Hermès has become the first luxury brand in India to leave the "ghetto". Last month the company became the first international brand in India to open a street-level stand-alone store in Mumbai. It chose a beautiful Victorian building in the historical Fort area - 15A Horniman Circle - which happens to be located at "point zero", the spot from where all distances in the city are measured. For a brand that prizes its heritage, opening in a heritage building is apt.
Spread over 3,000 square feet on three floors, with an art gallery on one floor and glass elevators, the shop is one of the biggest Hermès outlets in Asia. "We want to be part of the life of India and that means being on the street, not tucked away in a hotel. And we have so much space that we hope to have our entire collection here," said Michaud.
What next? Chadha loves Hermès's new Chinese brand, Shang Xia, in Shanghai, which is the result of Hermès taking traditional Chinese artefacts and polishing them up to the Hermès level. "The stuff in the shop is exquisite. If they did that for India - created an 'Indian Hermès' - it would be great," she said.
Appealing to Indian taste
Indians are so attached to their culture, particularly their food, that it’s no surprise they like to take their own snacks with them when they travel. Tour operators say one of the first things Indian tourists ask on arriving in a city is: “Where’s the nearest Indian restaurant?” Some of the wealthy fly their own chef out with them to enjoy home-cooked food on the road.
The first lesson the big fast food chains learnt when expanding into the country was that they had to Indianise their menus and adapt them to the Indian palate. So, pork and beef items were out and spicy items were in. And it is not just eateries that have adapted.
• McDonald’s: It offers spicy burgers such as the BigSpicy Chicken Wrap and McVeggie burger made with spicy vegetables. Its adaptation of paneer (Indian cottage cheese) is the McSpicy Paneer Burger and the Paneer Wrap. Only the breakfast items are non-Indianised.
• Pizzas: Both Domino’s and Pizza Hut offer spicy toppings such as “tandoori chicken” and “spicy masala chicken wings”.
• Mont Blanc: The Swiss luxury penmaker came out with a limited edition bearing the ascetic Mahatma Gandhi’s engraved image in 2009. It was meant to be something that appealed to Indian pride but it had to be withdrawn after protests saying that it “degraded everything he symbolised”.