Up goes the rich
Indian millionaires are on the increase. According to Capgemini and Merrill Lynch World Wealth Report 2011, India’s population of High Networth Individual (HNWI) population has increased by 26,000 to 153,000 placing the number really close to Italy and Brazil. The growth percentage was fast in India with its growing economy at 20.8 per cent as compared to the world average of 8.3 per cent.
This clearly brings in the indulgence too. Today the luxury car market in India is estimated to be worth over $3000 million. Rolls Royce, Bentley, Aston Martin, Maybach and other premium motor cars are selling more than ever in the country. Some of these car makers who have fewer numbers in terms of allotments to India are finding it tough to meet the demands from Indian consumers.
While ultra premium habits of these HNWIs are on the rise in the country, be it motor cars, luxury yachts, private jets or fancy real estates, other such luxury products as clothes, bags, watches and accessories should also have a reason to smile now.
Some of these brands, sensing that time the rise in the income of middle class young Indians, have entered the Indian market. Most of these brands have opened their boutiques in major cities in India and contrary to their perceptions, they found that selling and the number games that they initially anticipated, were slower. India no doubt is a different market for luxury brands. People who have the purchasing power may not necessarily want to buy expensive bags or watches all the time.
This way India is different as compared to Japan or China. Even the rich are careful in terms of spending, unless it is an automobile, jewelry or real estate. This perhaps was seen in Bangalore in India. Several brands rushed there to open their stores in a hurry about four years back and soon enough they realised that the numbers expected never came from most of their stores there. It was time to pull down their shutters then. Several brands, even with their high quality merchandise, had to beat a humble retreat from there.
When there are more than one brand selling similar products in the same market, it is imperative for them to have smart, intelligent managers running their shows here. I think this is another crucial area that brands some how missed doing their homework on. I am not sure on what basis they did their hiring. Most managers running these brands in India have no clue of what or who they are dealing with. Wrong kind of merchandise for the market or their inability to track down potential customers and sell the merchandise has also resulted in the brands faring badly in this market.
Most managers here believe that a cocktail evening at their stores is a damn good idea for selling, but more often than not it proved to be a killer setting for the liquor brand which poured wines and champagnes in to the glasses than the brands which hosted the evening! Guests always came, drank and left. It seldom resulted in sales.
I often wondered what was the purpose behind these cocktail dos at stores or pool sides. To create brand awareness, say brand managers. Brand awareness? If that was the intention they should track down potential buyers along with their existing clients and bring them over to the stores and explain them the merchandise. Do they do that? Well, the answer is no. I suspect they always call those ‘recognisable’ faces who are their deemed customers and invite them to the dos purely for media purpose. Four pictures on next day’s news papers and they are happy thinking the evening was a success even as their merchandise remains intact and unsold on their shelves! And at the end of season, they invite the same crowd to buy their unsold stock at unbelievable discounts. Why would they want to buy the products at any given point in time then?
Yet another aspect is the managers’ ‘Holier than thou’ attitudes. None of them would want to pamper their customers and make them feel important. I know several instances where wealthy and influential customers wanting to see some products at their fancy residences and executives failure in doing so. Some of them say their brands have no policy in doing such things. Policy? I though their idea is to “sell”!
It doesn’t matter how the India’s rich is growing and how fast they are growing. If brands have to sell here, they need the right kind of people selling the products. Unless these brands pull up their own socks and their managers’, brands will not sell in India, especially those ones that are not familiar to the potential Indian customer!