?The Mystique Of Luxury? Is The Summit Theme For The Mint Hindustan Times Luxury Conference 2008 (March 28 ? 29)

The Mint Hindustan Times Luxury Conference is an essential forum for the discussion and exchange of ideas on the Luxury Industry. With the business of luxury as its premise, it was initiated with the support of the Ministry of Commerce and Industry. The Honorable Minister of Industry and Commerce, Mr. Kamal Nath would inaugurate the third edition of the Mint Hindustan Times Luxury Conference on M.

New Delhi. March 27, 2008: The Mint Hindustan Times Luxury Conference is an essential forum for the discussion and exchange of ideas on the Luxury Industry. With the business of luxury as its premise, it was initiated with the support of the Ministry of Commerce and Industry. The Honorable Minister of Industry and Commerce, Mr. Kamal Nath would inaugurate the third edition of the Mint Hindustan Times Luxury Conference on March 28 at the Taj Palace Hotel, New Delhi. The inaugural address of Mr. Nath would focus on the theme: ?Promoting Luxury Makes for Sound Economics.?

In the two-day conference, several speakers of repute will opine their thoughts on the topic. Besides, more than 400 delegates from across the world will make their presence in the conference. The delegates would deliberate on various issues including: The Mystique of Luxury Brands, With a Little Help: What the Industry Needs From The Government, Countering Fakes: Are the Laws Strong Enough, The Art of Luxury Retail, India?s Luxury Sweepstakes: Is the pie large enough, Positioning Luxury in India: Lessons from Europe, Feeling Good: The Role of Luxury, Luxury Living, Building A Dream Home Making You Feel Special ? The Role Of Accessories, Toys For Boys, etc.

Moreover, the areas of luxury being addressed at the conference will span Fashion, Hospitality, Interiors, Yachts, Jets, Gourmet Cuisine and Intellectual Property Rights issues.

Some of the prominent personalities known world over in the field of luxury are Mark Lee, CEO Gucci; Andrea Perrone, CEO Brioni; Vittorio Missoni, Chairman of Missoni; Armando Branchini, Managing Director of Altagamma (association of Italian luxury goods); Joseph Wan, CEO, Harvey Nichols; and Andrea Illy, Chairman of Illy Caf? would make their presence in the conference. World-renowned New York based French corporate lawyer Mr. Alain Coblence and Mr. Pravin Anand would focus on the issues pertaining to IPR in the luxury goods sector.

The conference is the third in India in association with The Hindustan Times, a leading English broadsheet daily in India. The Hindustan Times, has always been a pioneer in spotting emerging trends in the country and was the first to hold such a conference in the country two years ago in Mumbai.

India?s luxury boom

Global Consulting firm A T Kearney recently put India at the top of a list of emerging markets for global retailers in its 2007 Global Retail Development Index. While other markets, especially in the developed world are getting saturated, India is turning increasingly attractive for retailers.

Economic reforms spread over a decade and half, coupled with sustained high growth rates has led to the emergence of the high net worth individuals (HNIs) in India, who are spurring the demand for luxury goods in a big way.

The 2007 Asia Pacific Wealth Report, released by Merrill Lynch and Capgemini says that India has recorded the world?s second fastest growth in the number of HNI?s at 20.5%.

Several factors have contributed to the growth in demand for luxury goods, and it is now becoming increasingly apparent that for international luxury brands, India is no longer a mere testing ground, but a lucrative market. Estimates suggest that India has more consumers for luxury goods than the adult population of several countries.

The initial fetish for luxury products started when international travel was liberalized in the late 1990s. Global travel and media exposure have contributed immensely to the demand for luxury goods and assets, because Indians who travel abroad are much more likely to pick up a Louis Vuitton bag or a pair of Jimmy Choo shoes, because their awareness levels are far higher.

There was a surge in demand for perfumes and personal care products, as well as wine and spirits. Over the last few years, categories such as jewellery, state of the art electronics, spas, top of the line cars, fine dining and high-end holidays have been added to the luxury list. Now, there are an increasing number of takers for art, yachts and private jets.

The Merrill Lynch/Cap Gemini report says that India?s population of dollar millionaires grew 20% last year, to about 100,000. That rate of growth was more than twice the growth of millionaires in the US.

No wonder, more than 200 international luxury brands are making inroads into India and those who are here are planning to expand their business.
From a long-term perspective, India?s consumerist culture is clearly an important draw. However, the age-old notion among the middle class that money should not be wasted is gradually melting away. Indians are now becoming acquisitive and brand conscious. The display of wealth is no longer a dirty word.

An average Indian today can potentially spend double of what one could spend in 1985. It is expected that in the next 20 years, one could be able to spend four times what he does now. In fact, a McKinsey study released earlier in 2007 estimates that India may overtake Germany as the world's fifth-biggest consumer market by 2025.

The key consumerism drivers in India today include:
- High salaries of employees in the corporate sector, especially in IT companies
- The increasing number of working women
- The rise of a new breed of self-employed entrepreneurs
- Emerging of large number of young working population with a median age of 24 years, who are willing to spend more, rather than save.
- There is a growing prosperity in more than 100 small towns and cities across India. This is typified by emerging malls, surging automobile sales, water parks, rise in credit card sales and investments in mutual funds. These emerging urban centres represent the future of India?s growth story.
- The changing habits of the metropolitan youth are also an important trend to watch out for. Today?s modern Indian youth lives in a world where videos are being watched on mobiles and MP3 players. It started with television, but now broadband and new technologies have started as catalysts for changes in consumer behaviour.

The problem of fakes
Fakes have been giving sleepless nights to luxury companies all over the world. The global fake market for luxury goods is estimated to be more than 27 billion dollars, according to the World Customs Organisation. The value of the counterfeit goods market in the UK was predicted to be ?14 billion last year, up 10% as in 2006, according to the report by the law firm Davenport Lyons.

With the top luxury brands enjoying operating margins of 60%-70%, it's not hard to see why many marketers view counterfeit products as the biggest threat to these brands. Reports suggest, worldwide fakes are making significantly higher profits than that earned by the companies being copied and are equivalent to returns in the illicit drug trade.

Policy Constraints
The potential in the Indian luxury market is huge, but the question being asked is whether global luxury brands are getting the right push from the Indian policy makers. The government is opening up the retail sector, but the liberalisation process has been slow because of political sensitivities.

In early 2006, the UPA Government in India decided to allow 51 per cent foreign direct investment in single brand retailing. But the process isn?t easy. The foreign partner has to apply for permission to the department of industrial policy and promotion, which takes the application to the foreign investment promotion board. Each application is scrutinised by the FIPB and sometimes it could take months to get a proposal cleared.

Also, retail outlets set up under single brand retailing can sell products that come from only one brand name. In this kind of a policy scenario, multi products are allowed as long as they are from the same brand, which at times can act as a huge deterrent.
The Indian government?s 2008 Economic Survey, which is seen as the policy intent of the government, recently recommended a share for foreign equity in all retail trade. It has also called for opening up of multi-brand luxury retailing. Moreover, it also suggested that 100% FDI should be allowed in single brand retailing.

Earlier this year, the Commerce Minister Mr. Kamal Nath too said that multi-brand retail would be opened up soon in a segmented manner. He said multi-brand retail would be gradually opened up in the electronics, footwear and apparel sectors. But, the model of ?organised retail? is still seen as a political hot potato and with the general elections coming up within the next 12 months, any immediate opening up of multi-brand retailing appears unlikely.

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by Ashish Mishra (few years ago!)

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