Storyboard18 | Why the pandemic failed to deter sales of luxury brands in India

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.

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 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 personalised 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 percent sales generation, digital sales have shot up to 30 percent for major brands.

Another fine jewelry 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 jewelry brand Fabergé.

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 March 31, 2021, stood at Rs87.3 crore (approx.) against the previous year’s income of nearly Rs57.1 crore.

The last numbers available from Louis Vuitton India Retail Private Limited show no reds. For the year ended March 31, 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 $5,943 million in 2021. The market is expected to grow annually by 8.03 percent (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 percent, led by Indonesia at 67 percent and India at 63 percent.

The wealth growth forecasts in the same report predict India’s threshold in the category to nearly 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.