Is India ready for niche luxury brands?

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The potential of India as a luxury market is breathtaking. This year, it’s likely to be one of the fastest-growing markets in global luxury, forecast to be worth $8.5 billion, up by an impressive $2.5 billion on 2021, according to estimates by Euromonitor International.

India remains a relatively new opportunity for global luxury brands, which have been frustrated for years by regulatory barriers including high import duties. Louis Vuitton was the first premium luxury brand to enter, as recently as 2002, while Tommy Hilfiger followed in 2003. In the years since, Gucci, Bottega Veneta and Burberry have all arrived. Valentino and Balenciaga are set to launch in India this year.

Read More India’s Reliance snaps up stakes in local designers Ritu Kumar and Manish Malhotra With a 52 per cent stake in Ritu Kumar, Reliance is changing tack from an international brand focus to maturing local designers.

But what about smaller luxury brands? An opportunity for independent luxury brands to sell in India emerged in 2011 with the opening of Le Mill in Mumbai, one of the first multi-brand concept stores. Labels stocked in the early days included Isabel Marant, The Row and Anya Hindmarch. Launched in a former rice mill, Le Mill worked hard to build its customer base and moved in 2015 to a location by the Taj Mahal Palace Hotel. “There is no question that we had to largely build that demand,” says Cecilia Morelli Parikh, a former Bergdorf Goodman buyer who co-founded Le Mill with Julie Leymarie. “This meant a lot of education and a lot of investment in content to support the fashion we were bringing.”

Le Mill became known for regular high-profile events, introducing brands such as Dries Van Noten, Rosie Assoulin and Zimmermann, superbrands not in the market such as Saint Laurent, as well as handpicked Indian brands. The formula appealed to discerning consumers in Mumbai. While the customer base was small, their spend steadily grew. Now, notes Morelli Parikh, business has grown 30 per cent year-on-year for the past five years – with 10,000 active customers.

Luxury Fashion Trend Report

Photoshoots at home are being prioritized by brands in the fashion industry

Trend - Many fashion brands and magazines are continuing their operations during the COVID-19 pandemic with creative photoshoots that are staged at home. This venture, which is heavy on the DIY aesthetic, depicts models and even employees of the label or magazine in their personal quarters.

Insight - The economic restrictions that were imposed by many governments during the COVID-19 outbreak are putting a halt to the operation of businesses across industries. Still in full effect in some countries, consumers are eager to experience a sense of normalcy by seeking out ways to engage with activities and content that were previously available to them pre-pandemic. This does not only afford individuals some comfort, but also serves as a form of entertainment and connection.

What Is the Right Price for Fashion?

In the meantime, the best thing she can do is educate her customers about precisely why her new hand-embroidered organic cotton dress costs $550. Stanley openly shared the cost breakdown here: $24 covers the organic cotton and dyes; the intricate handwork comes in at $48, because it took an embroiderer a full day to make the dress; production labor, including sewing, pattern-making, sampling, finishing, and packing, was $48; trims, including the labels, hang tag, and dust bag, were $5; shipping was $8; and duties were $24. Her total cost came to $157, and in order to keep the final price lower, she took just a 1.59x margin, bumping the wholesale price to $250. (This means Stanley would earn $93 in profit when a store orders the dress.) With the typical retail margin of 2.2x, the final price tag on the rack in a boutique is $550.

“I’ve been trying to make it a point to tell the story of my clothes, but it’s hard to be honest and say, ‘This is my cost, this is how much I make on this piece, this is why you should support my brand and the people who made it,’” Stanley says. “I love going to a store, and I have friends who have boutiques and work so hard. They deserve to make that margin, but the retail markup is really why clothes get so expensive. That’s where I get stuck.”

If you’re of the “buy less, buy better” mentality, it isn’t hard to justify the higher price. Plenty of Stanley’s customers are investment-minded and care about her commitment to ethical, sustainable, small-batch production, but some still need to be convinced that it’s “worth” buying one of her dresses instead of five cheaper versions. Lucette Romy, the founder of The Wylde, an organic label handmade in Bali, has had similar conversations with her customers about the higher price of organic cotton, botanical dyes, and dignified labor. “But it often isn’t enough to change their minds,” she says. So she found another way to get the point across: Every item on her site comes with a cost-per-wear breakdown. Her new organic cotton dress goes for 260 Australian dollars, or $178, but if you wear it 10 times, it’s $18 per wear. By the time you’ve worn it 50 times, it’s under $4. If you intend to keep it for years, as you should, that number would come down to pennies. Suddenly it’s a bargain.

Maryan Barbara
Maryan Barbara

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