Foreign Brands in India need Localized strategies.

DLF Emporio, New Delhi | Source: DLF

MUMBAI, India — According to Forbes, India has the fastest-growing population of millionaires in the world. But for Western luxury brands operating in the country, grabbing a piece of the market has proven more difficult than anticipated and many are in the process of re-conceiving their India strategies.

Part of the problem is that Western luxury brands don’t seem to understand Indian consumers. When they first entered India, they created splashy advertising campaigns targeting the old money elite. But the results were poor, largely because this customer segment consists of frequent international travelers who overwhelmingly prefer the experience of purchasing Western luxury goods abroad, where brands offer them wider choice, better service and more competitive pricing than what’s currently available inside India.

In response, brands are starting to refocus on new pockets of wealth emerging in regional hubs across the country. But a private report on luxury in India produced by management consultants AT Kearney and The Economic Times revealed that the newly affluent lack sufficient knowledge and awareness of luxury brands to drive significant sales. Furthermore, the current strategy of establishing a large retail footprint supported by traditional mass marketing is not working.

Indeed, in order to succeed in India, luxury brands need to localise their marketing strategies.  This goes further than just putting an Indian print on a bag or collaborating with a local celebrity. A multitude of cultures, languages, religions, festivals, colours and tastes make up this land of 1.1 billion people. So, it’s about understanding the difference between the flamboyant nature of a Punjabi customer and the more reserved nature of a Gujarati, and speaking to each of them in the specific cultural register that they respond to.

For example, luxury brand Montblanc — which successfully operates nineteen retail points across first, second and third tier cities in India — has regionalised all their marketing material.

“There is a clear distinction in customer values between [Indian] states,” says Tanya Kapinda of ID8 Media Solutions, an agency which works with Montblanc’s marketing division in India. “Any time a letterhead, invitation or a newsletter is produced, we customise [it] according to the local language and other aesthetic considerations such as colours used and the amount of decoration.”

When creating invitations for potential consumers in the Punjab in northern India, for example, the invitations are more lavish and the language more boisterous than those sent to consumers in southern India. “It ensures you are connecting personally to your consumer and customers respond to this,” she adds.

Brands like Louis Vuitton and Rolls Royce have also localised their approaches, identifying  important events and celebrations amongst potential clients and arriving with personalised gifts or a surprise car service for the occasion.

Getting traction in the Indian sub-continent has been a challenge for every Western luxury brand that has tried to crack this complex new market. Those brands who are willing to better understand and connect with the local Indian consumer will be the ones who are most successful.