When William Lauder, Chairman and CEO of the Estee Lauder group came to India four years ago, he took a quick look at Mumbai and lamented the fact that, “the city does not have a High Street!”, where people who enjoyed luxury could spend time in a plush environment and shop to their hearts’ content.
The luxury industry also looked. It was true. Except for a smattering of high end watch stores scattered in a few malls, in deluxe hotels and individual stores, there was no cohesive structure to selling luxury goods. As if nudged by William Lauder, the city now seems to have a semblance of ‘high streets’ in the elitist pockets of the city. You only have to check the tiny strip of real estate from Nariman Point to Lower Parel and from Bandra to Andheri. The former is where the ‘old money’ clients live, and the latter is for the new urban rich. The Galleria for instance comprises high end stores with Judith Leiber bags vying for attention with Jimmy Choo shoes. Where the two grand houses of Luxury, LVMH and the Richmond Group compete fiercely for its share of clients by building little temples of luxury in Mumbai.
Check out the latest luxury lounge, The Palladium where brands jostle for attention. A huge hoarding inside the mall reminds us that Zara is coming to Mumbai, rubbing shoulders with The Collective one storey higher, that houses brands like Versace, Armani, Todd’s. Why it even has Lauder’s blessings! Three stores in a row grandly display luxury cosmetics of Estee, Clinic and Mac, all belonging to the Estee Lauder group. After all, luxury is known by the company it keeps and our new High Street, The Palladium, immediately puts every store it houses in the luxury bracket. Even Celio a mid-range brand in the West, get promoted to high end. After all, it’s rubbing shoulders with Rosenthal, the beautiful table-ware store, so exclusive that even dining divas look in wistfully at dinner sets that cost a small fortune.
Is there enough traffic in these stores? An hour at any of these luxury malls: Atria, Palladium or even individual stores like Vileroy & Boch, or the numerous Swiss watch brand stores, will reveal a poor walk in traffic. But before you jump to conclusions about how badly luxury in India is doing, consider this:
Every luxury brand that comes to India has only one figure in mind: 2 percent. No it’s not the market share they’re looking at; remember for luxury, money is no object. Nor does it refer to the net turnover, or the ROI. The 2 percent they are interested in is the demographic profile of their clientele: The super-rich, the old money and the new rich. And it is this two percent alone that will make or break this industry.