CONSUMER PROFILE

by Gilles Moutounet

Luxury Products in India

Leaders in Luxury Middle East 2009 Conference in Dubai

Contents
Global Luxury Products Market Indian Luxury Products Market Key Growth Drivers Business Outlook Consumer Profile: Luxury Products in India Socio Economic Profile Emotional Drivers and Influencers Buying Behavior Indian Luxury Market: Critical Success Factors Indian Luxury Market: Gitanjali Perspective

Global Luxury Products Market continue to capitalize on

existing market
Global Luxury Products Market Share Global Luxury Products Market Trend USD bn

Global Luxury Products Market

Major Markets Europe USA Japan Fashion Accessories Product Categories Apparel Jewellery Watches Consumer characteristics Absolute - characterized by elitism, heritage and uniqueness. Aspirational - characterized by being recognizable and /or distinctive. Accessible - characterized by affordability, status and membership.

.AND STRIVING TO SEEK OUT NEW MARKETS TO EXPLOIT

Source: AT Kearney Research Report

02

India is second fastest growing region in Asia Pacific for Luxury

Products
Luxury Products Market Size, 2006, USD Mn Differences in Global and Indian Market

Indian Luxury Products Market

Major Cities Mumbai Delhi Bangalore Chennai Product Categories Jewellery Watches Apparel Fashion Accessories Major Drivers

Aspirational - characterized by being recognizable

and respected.

Achievement - characterized by acquisition of best

before others.

Indian market is dominated by Jewellery whereas as Global market is dominated by Apparel and Accessories . AND IS EXPECTED TO GROW AT CAGR OF 25% OVER NEXT 5 YEARS

Source: AT Kearney Research Report

03

Look Good products consist major part of

Total Luxury Product Market
Products Market Break-up, 2006, USD mn

Indian Luxury Products Market

Demographic and Cultural diversity is a critical factors when analyzing Luxury Consumer in India. Consumers spend most on Look Good category of Luxury Goods such as Jewellery, Watches followed by apparel. PRODUCTS WITH HIGH FLAUNT FACTOR DOMINATE THE MARKET

Source: AT Kearney Research Report

04

Growing Consumerism in India can be attributed to

some major drivers
More Wealthy People Increasing Awareness
High Net-worth Individuals (HNIs)* in India (Figures in 000s) HNIs are the largest spenders on luxury goods and as they increase in number, the demand for luxury goods will increase.

Number of Indian Tourists travelling abroad (Figures in Mn) With increasing international exposure, more people are getting exposed to international brands. With easy access to internet, people are becoming more aware about various brands. Consumption per capita USD With increase in consumption spend on non-essential items, demand for luxury goods increases. No guilt feeling associated with spending on luxury.

Increasing Consumerism

Greater Supply of Luxury Goods

Increase in number of luxury brand outlets With easy availability of luxury goods within the country, the local sales have been increasing.

AND ARE ALSO EXPECTED TO BE IN EFFECT IN IMMEDIATE FUTURE

Source: AT Kearney Research Report *HNI is defined as someone whose income is > 1$Mn

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India Luxury Products Market is estimated to grow at

25% over next 5 years
Estimated Luxury Products Market, USD mn
Growing Economy One of the fastest growing economies in the world with 6% growth over the last decade

Market Potential India has the 2nd largest population and the largest youth population in the world Emerging Market Worlds third largest diamond jewelry market, and growing swiftly ($5bn by 2013) Total domestic jewlery is worth $ 27 bn

PRESENTING TREMENDOUS OPPORTUNITY FOR LUXURY BRANDS IN INDIA

Source: AT Kearney Research Report

07

India Luxury Consumer has unique buying

behavior and product preferences

Who is this Luxury consumer? What is Socio Economic profiling of Luxury Consumer in India?

What does this Luxury consumer do? What is the source of affluent lifestyle of Luxury Consumer

What are the peculiarities of luxury shopping behavior?

What are consumer needs and wants? What influences him to focus on certain products?

Source: AT Kearney Research Report

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India Luxury Consumer is typically a 25 34 year old entrepreneur

or a industrialist
Profile of Indian Luxury Consumer
Indian Luxury Consumers are typically young businessmen (25-34 Years) who have been exposed to luxury brands through their overseas travel, education or gifting. Senior corporate professionals, professionals (lawyers, doctors, architects) are the next biggest set IT / BPO professionals complete the picture

Age profile of Indian Luxury Consumer

Profession of Indian Luxury Consumer

The boom in corporate India has created a new breed of luxury consumers. These are people who have experienced rapid enhancement in their earnings and consequently spend on themselves. They tend to be less prolific in their purchase, they are emerging as a promising segment.

DRIVEN BY GROWING ENTREPRENEURIAL SPIRITS IN INDIA

Source: AT Kearney Research Report

09

Attributes of Luxury brand for Indian customer

History

Longevity

Value for Money

Expensive

International Recognition

High Quality & Service

Exclusivity

Less important Source ET consumer research across 6 cities and 490 consumers

More important

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What does the Indian customer associate Luxury with?

Source: Published Information

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Influencers for Luxury Purchase are mostly peer groups

Understanding Indian Luxury Consumer
Indian Luxury Consumer is primarily influenced by peer feedback and positive word-of-mouth reviews. The media plays a strong role as an influencer with lifestyle publications, television and the internet.

Key purchase Influencers

. HIGH VISIBILITY MEDIA EVENTS ARE ALSO IMPORTANT INFLUENCERS

Source: AT Kearney Research Report Results of Survey % of respondents who rated the option among top 3

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Indian Luxury Consumer has unique buying behavior

Brand Conscious
Aware of world trends because of growing travel overseas for business and leisure travel where they get exposed to best of the brands and luxury trends

Price Sensitive
Demand Value for Money which is mostly because of traditional cultural values

Expectations
High standards of service expectations as the Luxury Consumer will mostly have long term association with the product

Personalization
Personalized connect is important because Indian consumers has high emotional association with the products they own or acquire

. WHICH COMES FROM STRONG TRADITIONAL VALUES

Source: AT Kearney Research Report

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Luxury Brands need to follow a structured process to capture Indian

Luxury landscape
Create Infrastructure Indianise Product Build Brand Awareness Utilize Indian Resources Softer Price Points

Brands should help India to create an environment to develop the existing infrastructure

Foreign brands need to understand the Indian personality and fashion elements to Indianise their products

Luxury consumer in India is increasingly becoming brand conscious which has high visible value
Branding campaigns and participation in Media

A win-win situation for global brands is to utilize the talented and cost effective Indian designers

Brands would benefit by keeping their prices competitive and offering entry level products as well

JV with local partners like Walmart with Bharti Retail

Localized products from McDonalds

Local manufacturing by Mercedes

Indianised versions of luxury cars

WHICH CAN HASTEN THE PROCESS OF MARKET CAPTURING AND BRAND BUILDING 14

Gitanjali an Indian Jewelry Pioneer

Established in 1966, Gitanjali started as diamond trading and polishing house Graduating from the diamond trading the company set-up its own jewelry manufacturing units In 1994, Gitanjali launched Indias first diamond jewelry brand - Gili Expanded into jewelry retail by launching first stand alone store in India From 2000 to 2006, introduced major brands like Nakshtra, Asmi, Ddamas, Sangini Increased international footprint by acquiring/opening stores in leading jewelry markets like USA, Japan, China and Middle East and upgraded them by aggressive branding

OUR STRATEGY IS TO SELL EVERY DIAMOND AS A DREAM

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Gitanjali Spread across the global stage

137 Samuels and Rogers stand alone stores

50 Giantti doors

110 Vrit doors 8 stand alone stores +50 in-store boutiques

+400 stand alone stores +2500 in-store boutiques

BY SELLING EVERY DIAMOND AS A DREAM

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THANK YOU

www.gitanjaligroup.com