Small Town: Luxury’s new address in India

Who says luxury dwells only on high streets and exclusive malls in metros? It has now found a new destination in India. The small Indian town, they are increasingly emerging as the latest luxury destination. These cities don’t boast of high streets

or glitzy malls and high-flying shopping destinations but people here have the money to spend on luxury goods and they are aware of the high street labels too.

While most of Indian brands and retailers are betting big on the Tier II, III cities, now, even top end luxury brands are shifting their attention towards smaller cities. Increasing brand and quality consciousness, high disposable incomes, increase in the number of nuclear families and education levels are some of the main reasons leading to this change in consumer behaviour in smaller towns. As per a recent CII-AT Kearney report on the luxury market in India, it is expected to reach 14.73 billion dollars by 2015 from an estimated 8.21 billion dollars as of now. No wonder, luxury retailers are already in search of customers across the country and now spreading their reach to non-metros like Ludhiana, Surat, Jammu, Indore and Chandigarh.

What’s more the e-commerce boom has also helped in the spread of luxury market in smaller cities. E-retailers in India are especially witnessing clientele from smaller towns opting for high-end products like watches, jewellery, clothes, bags and exclusive experiences, like spas and cars. Most of these cities already were home to old moneyed khandaans, famed for their refined taste in luxury. They would splurge on high-end brands by shopping in bigger cities or during their visits abroad but with global brands entering the country, they are opening shops to directly cater to valuable customers.

Genesis Luxury for instance, which markets brands such as Armani, Burberry and Canali in India is looking at taking these labels to cities beyond Delhi and Mumbai once the right real estate options are available. Genesis has taken up space for half a dozen stores at a luxury mall in Surat being built by Virtuous Retail, a retail real estate asset platform sponsored by the Xander Group. It is also looking for space in Chandigarh, Ludhiana and Jaipur because several people from these towns frequent its stores in Delhi and Mumbai. Similarly, Reliance Brands, a part of Reliance Industries, which has recently brought American menswear brand Brooks Brothers (BB) into India, has plans to open stores in the metros and also has set its eyes on Chandigarh for the flagship store. Kimaya, a popular store that sells high-end fashion labels, realised the importance of ‘new markets’ and took a step in this direction by opening a store in Surat in 2011, followed by more stores in Hyderabad, Lucknow and Jaipur.

A recent survey by Yes Bank and Assocham shows that new pockets of regional growth have led to a rise in the number of first time luxury consumers — most of who are within a younger age demographic. And as their numbers grow in smaller towns, it sure is giving a big push to the luxury market.