'Luxury brands growth in India Essay\r'

'Lack of quality lavishness space, environment and dearth of blue passageway or super premium malls is a prime reason for restricted front of extravagance gulls in India, thus there is a dire need for modernised and dedicated sumptuosity retail argonas in protected vicinities such as airports, gibe to a recent ASSOCHAM-KPMG joint study.\r\nâ€Å" con postureration up stores in high streets affects highlife retailers’ profitability due to sky-rocketing rental costs, moreover, high streets be very cluttered, crowded and be un conciliateable due to the absence of scoopful ambience that prodigality retail demands,” concord to a study on ‘Challenges highlighted by luxury retailers in India,’ jointly conducted by The Associated Chambers of Commerce and Industry of India (ASSOCHAM) and KPMG.\r\nThe Indian luxury merchandise grew at a healthy rate of 30% to attain $8. 5 billion in 2013 and is belike to continue growing at a healthy pace of abou t 20%, and reach $14 billion by 2016 owing to rising function of crocked people, growing middle class, affluent issue consumers and some other related factors. Though, India currently enjoys proficient one-two per cent share in the transnational luxury market place but it is the ordinal most attractive market for international retailers.\r\nFragmented and diversified consumer base in India is another signifi female genital organt challenge be faced by luxury retailers in India as high net outlay individual ( HNI) consumers are not liberal to reach, mention the ASSOCHAM-KPMG study. prodigality strike offs need to strategically design their growth casts to tap look at across three categories of HNIs, namely †the inheritors (traditionally wealthy) who are habitual spenders; the professional elite who are discerning spenders; a large division of business giants (entrepreneurs, owners of small and medium enterprises) who cast off the money but lack compass for fi ne luxury goods because of no editioner exposure to such products, it added.\r\nâ€Å"There is a need for luxury brands to focus on expansion in the type and genius of products cosmos offered and increasingly adopt forward-looking marketing plans to tap rapidly evolving consumer behavioural trends,” said Mr D. S. Rawat, secretary general of ASSOCHAM period releasing findings of the study. â€Å"Luxury retailers need to plan out of the box marketing strategies and fetch up with products that are tailor-made to suit the whims and fancies of varied Indian customers,” said Rawat. ”\r\nLuxury is no longer a ‘ location symbol’ but is now a lifestyle and the global brands need to luxuriant evolve and learn ways to fit within the topical anesthetic environment so that they can get accustomed to nuances of the market by understanding the cultural identicalness of Indian consumers. ” Lack of policy contribute is another prominent challenge b eing faced by luxury brands in India, noteworthy the ASSOCHAM-KPMG study. â€Å"Despite strong demand momentum, Indian luxury market has not been viewed as policies and regulations friendly for the luxury retailers,” the publish said. ”\r\nImport duties (20-150 per cent) are relatively high and this is considered as a key dread factor among the international players, who may elude them to frame aggressive growth plans for India,” noted the study. Clauses such as 100% foreign direct investment (FDI) in twain single and multi-brand retail requires 30% of local sourcing, announced in the liberalized FDI policy in luxury retail in November 2013 could be difficult for the international luxury players to accept with. â€Å"The duties are manifold ranging from customs’ duty, restitution veiling duty (CVD), special supererogatory tax, education cess adding to the overall cost,” said Rawat.\r\nBesides, luxury retail is also affected by the system of ‘maximum retail toll’ as it applies to custom duties and to cascading ‘after the custom’ taxes, thereby heavily penalizing foreign brands push their overall entrance costs by up to 40%. Lack of ingenious staff is another well-acknowledged challenge face up Indian luxury retail assiduity which requires greater discretion and knowledge on the part of a salesperson, further highlighted the ASSOCHAM-KPMG study. â€Å" shortage of skilled labour for the intentness is a major cause of concern as it is difficult to make the local work force understand the heritage and legacy of the brand along with the specific finishes involved in the manufacturing process,” said Rawat.\r\nIn the absence of these requisite skill sets, brands hire no survival of the fittest but to manufacture in their hoidenish of origin; lack of skilled workers can also be attributed to the sales percentage where presentation and interpersonal skills form an entire element for the business. Growing prevalence of manipulate luxury goods and a grey market are also hampering the growth of the industry, noted the ASSOCHAM-KPMG study. Most of these products belong to segments such as apparel, perfumes and accessories, which are usually lower tag end items and can be easily displace in grey channels.\r\nâ€Å"Luxury players in India continue to face supply side issues such as legal loopholes pertaining tointellectual stead rights, inadequate means to monitor variant emerging channels, and a growing number of online portals, among other factors,” the study added. A collective, industry wide effort is likely to have a far-reaching impact in traffic with the issue †as seen in other industries such as films and music. Awareness and collaboration also needs to be create with authorities, who have experienced major gross losses due to loss of taxes and duties, on how to deal with takingsfeits, further suggested the study to counter the growing me nace of counterfeit luxury products.\r\nâ€Å"Corrective measures need to be taken to banish the growth of grey luxury goods’ market in India which results in goodish revenue losses for firms,” said Rawat, and added that a strong legal structure combine with effective framework of intellectual situation protection would friend prevent dilution of brand image and reduced consumer trust. â€Å"Measures in form of effective intellectual property enforcement, plugging loopholes in the legal and judicial structure and high conviction rates can help curb the growth of fake luxury products,” said Rawat. Information collected with secondary sources such as net income and local newspapers…\r\n'