Luxury sales and experiences see a growth spurt in India led by wealthy young urbanites

There are some interesting trends that began emerging in late 2018 and are likely to be strengthened if the economy continues to do decently.

A lot of brands must be celebrating the news that Indian users of Instagram will be able to use the app’s shopping features from 2019. By early next year, Instagram will add a buy button to its interface in India and first, direct them to the brand’s page, but soon will start selling directly.

This would mean a bonanza for both global brands that have a very strong Instagram presence, but also for home-grown luxury brands.  In other countries, global fashion brands allow Instagram users to click on images with the ‘buy’ feature that re-directs users to the brand’s e-commerce website, with verified users even being allowed to add swipe-up links to their Instagram stories. A Bain & Co 2018 reports India as the second largest market for Instagram outside of US. A representative of Michael Kors, a popular bridge-to-luxury brand, says that they may soon launch their #InstaKors programme in India. After signing up on michaelkors.com with an email address and your Instagram handle, users can shop the brand's looks featured on the social media platform. All they have to do is double click on the look with the #InstaKors hashtag and an email will be sent with the direct shopping link mentioned on the photograph.

Cons: While more young Indians are moving towards buying online, Bain & Co warns that these purchases may be in the high-street segment rather than luxury, given the kind of money you pay for luxury.

Pros: Luxury e-commerce in India received a fillip when Tata CLiQ, an online retail store backed by Tata, launched a luxury vertical in 2018. While the big global brands are already on the platform, it is their Indiluxe segment that drew much acclaim because of its bold tie-ups. Besides the big Indian luxury brands, they have expanded to include alternative fashion brands such as Buna, Khara Kapas, Ka.Sha, Coral Haze, skincare and wellness brands from the mountains, Pahadi Local, and The Perfume Library. “These local luxury brands have a story—India’s legacy of luxury, of its perfume tradition and weaving traditions and skin care traditions, and they modernise them for young luxury consumers,” says Radhi Parekh of Artisans, a gallery that supports designers and artists who turn vintage crafts and textiles into modern luxury.

Khara Kapas on Tata Cliq.

Cons: Indians still give luxury brands a go-by (except for the big designers). We aren’t anywhere near China where home-grown luxury is giving a tough competition to the global brands.

Pros: Earlier last month, India replaced China as the most promising retail market, including for luxury, in the world, in an AT Kearney report backed by its expanding economy, booming consumption rates and urbanising population. Luxury brands, from mainstream to the alternative, debuted in India in latter half of 2018. A far cry from the time brands were rolling back plans and shutting shops.

Ralph Lauren.

It is the emerging WSU segment, which pretty much indulges in credit card spending, that may be driving up the sales and negating the effects of these policies and 2019 looks even better. Chanel’s Deauville bag, priced at $4,000, sold its entire stock they exported to India, which prompted the brand to announce a store in DLF’s The Chanakya mall that opens in early 2019. Ralph Lauren, the flamboyant American brand will make its debut in DLF Emporio, along with experimental British brand Alexander Mcqueen. Louis Vuitton has expanded its Emporio store, while Berluti, the Italian menswear and accessories brand and Bath & Body will be expanding to Mumbai and other cities. Tushar Ved, President, Major Brands (which has bought Bath & Body to India), says, “Instant gratification has gone up mainly due to Instagram and Facebook and there are a lot more people in the malls today.”

Alexander McQueen.

Cons: Luxury buying is completely tied to the political and social reality in the country. The last two years have been bad for luxury because of the welter of policies that threatened the industry: demonetization (which led to a spurt in luxury buying on the night it was implemented, with brands staying open late night) to GST and the order to produce a PAN card for high value transactions of over Rs 2 lakh and doubling of customs duty to up to 25 per cent.

As a marque luxury brand’s country head told me (on strict conditions of anonymity), everything from how the stock market performs to what government formation will be like in 2019 will affect the sentiment. “Things in India change month to month. What seems like a stable government may suddenly look to be on shaky grounds. Also, policies may change depending on the pre-occupations of the government that comes in.”

The Nielsen ‘India Insight’ report states that the Wealthy Young Urbanite consumers put experiences over purchases. Arjun Urs, Executive Director, Nielsen South Asia says, “Our study shows the segment in India is educated, focused, hardworking and ambitious. It is open to adventures and revolutionary ideas. And that includes women who are spending on travel and adventure sports.”

Two December 2018 debuts offer an insight into this ‘luxury experiences’ economy. Foodhall@Linking Road, Mumbai, which debuted this week, the largest Foodhall in the country, has put food at the centre of all the activities: from an expansive luxury teahouse to coffee roasters and a coffee lab that roasts beans to offer you fresh coffee, a huge cookery studio where you can attend food workshops, a cheese cellar, and a host of restaurants. Avni Biyani, Concept Head, Foodhall, says, “We live in a world obsessed with experiences, many of them underlined by food. Food dialogue has become integral to the contemporary culture.

Foodhall Cookery Studio.

Experience-led luxury takes on many shapes and can be ‘rented’. Mutterfly is a tech-driven platform where you can “rent premium products to create luxury environment experiences,” says its founder Akshay Bhatia, formerly an investment banker in London. From ‘Indoor movie nights’ that allows customers to create a movie theatre at home by renting projectors, sound bar and popcorn; sailboats and yachts to sail around the Mumbai coastline; life-size casino tables with professional dealers and everything you may need to convert your living room into a Vegas Casino; a private chopper ride above Mumbai; Segway tours and much more.

The House of Tea Salon, Foodhall, Linking Road

Luxury in 2019 will be varied, exciting and as much about what you can experience as what you can buy with your money.