Luxury

As the Indian luxury market heats up, international retailers interested in the country may need to follow a few ground rules

From providing the highest degree of customer service to using channels like WhatsApp for selling, Indian luxury retailers break down the recipe for success in the country.
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Le Mill

· 6 min read

Since Louis Vuitton’s arrival in India in 2002, several brands, like Gucci, Dior, and Hermès, have set up shop in the world’s second most-populated country, making the nation an up-and-comer in the luxury-goods category. And the recent arrival of the likes of Balenciaga and Valentino has only invited more attention to the country as a potential luxury hotspot.

Still, most luxury brands coming to the country have chosen to do so through a partnership with companies like Aditya Birla Group or Reliance Brands Limited, a conglomerate that has brought 50 international brands including Armani Exchange, Bottega Veneta, and Burberry into the country.

Per Swarooprani Muralidhar, senior analyst at Coresight India, foreign brands prefer to partner with these groups, as they are more likely to navigate the nuances of the Indian market.

“Brands [that] are doing well, they’ve invested enough in hiring local personnel that understand the nuances of Indian sensitivities, Indian cultures,” she told Retail Brew. “There’s no one single Indian culture. Someone who comes from the north of India is obviously very different from the south of India—they speak different languages, they way they just conduct regular everyday activities may be different.”

Worth an estimated $8.5 billion in 2022, up from $2.5 billion in 2021, the Indian luxury market is on track to be one of the fastest growing in the globe, according to Euromonitor International. This is in part because of the varying cultures within India’s population of ~1.4 billion.

Le Mill—the Mumbai-based multi brand luxury retailer founded 11 years ago by two French natives, Cecilia Morelli and Julie Leymarie—houses a number of brands including Celine, Dries Van Noten, and Zimmerman in its stores. Le Mill is an example of how a house of brands can work in India, guiding luxury retailers through the labyrinth of Indian society.

“Our role…is really to bring these brands to the country, and to give them their first soft launch,” Morelli told Retail Brew, adding it is able to do that by having a “very loyal customer base” that it has developed over the years. “Our strategy is not to own the brands necessarily, but to help them launch in the country,” she said.

Morelli describes Le Mill as an urban “tastemaker” since the curated brands service a very specific type of customer: ultra high net worth individuals whose wealth surpasses over $30 million. This usually includes a range of Bollywood celebrities and local industrialists who set the tone for what’s what in the country. Morelli counts Gauri Khan (interior designer who is married to actor Shah Rukh Khan) and Gayatri Oberoi (a former actress married to industrialist Vikas Oberoi) as some of her brand’s prominent ambassadors.

“In marketing terms, it’s the absolute customer, and that’s really important for the brands because they help the brands reach the aspirational customers,” she said. The influence of Bollywood also explains the success of the likes of homegrown designers like Manish Malhotra. Reliance Brands recently purchased a 40% stake in the designer.

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The brand got its start as a designer label for Bollywood celebrities like Sridevi and Shah Rukh Khan 30 years ago. It now has a line of wedding wear, menswear, home décor, and accessories, and notched $30 million in revenue last year.

Going Glocal

Alongside Bollywood, however, luxury brands that have found success have also done so by adapting local or traditional elements of the culture.

“To serve a diverse country [like India], one needs to know how to win an Indian,” Malhotra told Retail Brew, adding that highlighting local craftsmanship and heritage textiles is one way of going about it.

  • Take Bulgari, for instance, which debuted its own version of the mangalsutra—an integral traditional ornament worn by many married women in India as a symbol of commitment.

The local element is also instrumental in helping reach consumers beyond the Indian metro cities of Mumbai, Delhi, Chennai, and Bangalore, cities that have anywhere between 7–16 million people. Tier 2 cities and Tier 3 cities like Ahmedabad, Surat, and Amritsar are gaining traction for their luxury demand because of growing disposable incomes and people from metro cities migrating in large numbers, Muralidhar explained.

Le Mill’s Morelli said that those regions account for 8%–12% of its orders.

Although these cities don’t necessarily have the infrastructure for physical retail, brands build awareness through online shopping and social media, Muralidhar said. Part of this includes incorporating channels like WhatsApp, where luxury brands can update their returning customers on latest collections, out-of-stock items, and overall offer personalized service.

“You don't want to be like, among hundreds of consumers; the luxury consumer wants to be really special,” Muralidhar said. “That’s what WhatsApp helps to do…It cuts out the clutter.”

For Morelli, WhatsApp nearly rescued its sales during COVID-19, when its store, which accounts for 90% of its total sales, was shut. The customer outreach also went beyond sending out messages. “We have a very vibrant video-call system that we use, which helps us to interact with the customer when she’s not physically in the city because we obviously do a lot of WhatsApp selling,” she said.

The idea is to give customers a quick preview of what’s new in the store—part of what Morelli calls high-end “clienteling.”

“That includes anything from knowing when your customer is going on holiday, to sending clothes to her home, and being willing to not have the clothes in the physical store for a couple of days, so she has the luxury of trying them on,” she said.

The strategy may sound odd, but for an emerging market like India, Morelli believes all bets are off.

“In a developed economy, there are exact sciences, you know where the customer is,” she said. “But in a country where there are 39 different ethnic communities, and each community is consuming in its own very unique way, finding that customer in that unique mix is really challenging.”—JS

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