The demand for luxury clothing in India is rising at significant rate with flagship stores from major brands opening in metropolitan cities at a rapid pace. Although the academic interest created as a result of the emerging market is a lot higher than the current status of the small market, it is rightfully justified in the prospects of the country for the future particularly when considering: a) extrapolation of the current trend in growth of demand, and b) the long-term interests of established clothing brands to create an early impression and establish dominance for an inevitably booming market in 30-50 years timespan. These assertions are made based on the rising GDP rates of the country, the growing number of billionaires and millionaires as well as trends seen in the emerging markets collectively as a result of increasing globalization. Given the recent success of a number of brands like Zara, H&M and Burberry, the previously held perceptions about India as a poor market for luxury clothing are fading. Moreover, given the unexplored cultural perception about the nuances of the market, there is considerable interest in understanding the market for brand marketing strategy and for insights dictating partnerships and acquisitions.
The research study proposed in this document is relevant for a number of reasons. The preference for western luxury brands of large numbers of individuals craving social status is a recent phenomenon in Indian metropolitan cities like Delhi and Mumbai. The access to this strong customer base is made possible through physical brick and mortar malls in areas with high concentration of wealthy sections in major cities, as well as social media. The need for rapid concept-to-release in these markets is further facilitated by data analytic tools available to marketers today. However, the emerging nature of the market presents challenges in terms of optimizing supply chain, understanding customer preferences and dealing with lax regulation and enforcement of anti-counterfeiting practices. Therefore, it is important for academics and marketing professionals alike to research this market for further insight.
In determining what constitutes a luxury product, four parameters are considered: to determine if is high priced, is rare, is extraordinary, and is high-quality? (Kromrey, 2009; Gheisary, 2015). A sub-classification of luxury clothing articles is the one that separates between luxury and semi-luxury. Products belonging to the latter category are also known as premium brands (Gheisary, 2015). Alleres (1990) suggests that luxury goods can be classified into three levels based on the degree of accessibility. This classification is also correlated to social class. The top-level is the domain of the elite-social class, the middle-level is targeted at the professional socio-economic class and lastly the bottom level is accessible to large segments of the population. Another classification is made that specifies entry-level, connoisseur brands, star brands, and elite brands (Hieu-Dess and Esteve, 2005; Gheisary, 2015). This classification is made based on affordability and rarity. These classifications are important to consider in the context of India, since research suggests that the very same items may be classified differently in a western country like the U.S or U.K in contrast to India. For instance, a traditionally connoisseur brand may be classified as an elite brand by certain segments of the Indian market. This is owing to the socioeconomic factors that play a crucial role in buyer judgement (Gheisary, 2015).
As far as defining the word luxury, academics have been unable to reach a compromise. Luxury has been taken by Dubois et al. (2005) to portray a life of flamboyance, abundance and extravagance with its roots traced to the Latin word ‘luxus’. With successive eras, luxury has been associated with wealth, belonging to the aristocracy (the superior economic and political class) with a significant feature of acquiring excessive materials or property (Brun et al., 2008). Goods could be classified as luxurious if they were scarce or if acquiring them was placed under strict statutory control (Hauck and Stanforth, 2006). Luxurious goods were classic and were obtained from materials that were rare and not readily available. Their circulation was also reserved by strict regulations making them available only to the crème de la crème of the socio-cultural system (Nueno and Quelch, 1998). Koyesi (2015) gave a general definition of luxury- rooted in ‘old’ luxury- as the practices associated with consumer behaviours of the members of a society’s upper class. The industrial revolution was the reason that stood at the base of a period of increased prosperity. This led to an increase in the availability of luxury goods, making them more accessible to a larger proportion of the population in metropolitan or advanced areas (Hauck and Stanforth, 2006). Luxury goods were no longer the exclusive privilege of the upper class, as members of the middle and lower classes could also access them (Frank, 1999). In the 20th century for instance, plumbing systems fell under the classification of luxury goods. Presently however, the lack of plumbing systems would be considered as a symbol of extreme shabbiness (Hauck and Stanforth, 2006). At the end of the nineties, there were significantly positive changes in the general living standard. This resulted in a reclassification of the very concept of luxury, purchasable to cater to forbidden or guilty pleasures of high expense (Twitchell, 2003). Technological progress attained during the industrial revolution has enabled companies to cost effectively manufacture goods that correspond to an upper middle class to upper class lifestyle (Brun et al., 2008).
For quite a number of years now, rapid economic and technological changes have increased the availability of a variety of luxury items of different categories to satisfy the rising demands of customers. The effect has been a sharp increase in the number of products and services that fall under the classification of luxury goods. Some examples of industries that stand out in this regard includes: automobiles, clothing and fashion and tourism (Chevalier and Lu, 2010). This has led to the coining of the term ‘new’ luxury, which is a substitute definition of luxury as understood in modern contexts (Truong et al., 2009). The basic definition of the term luxury is highly dependent on perspective and has been subject to constant change and fluctuation. This has led to a wide variation in what kind of products or services can be referred to as luxury brands (Brun & Castelli, 2013). Although fundamental concepts exist that can be used to identify the requirements for a luxury brand, there seems to be a lack of consensus in available literature concerning an all-encompassing definition (Doss & Robinson, 2013).
According to Verhoef et al. (2009), even with considering the recent global recession that occurred between 2007 and 2009, the industry of luxury products seems to be advancing. Luxury is a very popular word used in the daily lives of the people; it is an assurance of decadence and a mirage of elite lifestyle, a significant element of advertisement and marketing tactics and a mantra in most commercials featuring various products or even services. However, the question is what does it really mean? There is high incongruity with the significance and the meaning of this concept when it is defined by different individuals. For a market that once proved itself as a unique and ultimate market, it is nearly impossible to believe that there would be such ambiguity in describing the actual meaning of this industry. According to Berthon et al. (2009), globalization altered the size and structure of this industry dynamically. A unique definition of this term may not be known, but it is highly important to understand how the consumer describes ‘luxury products’ in order to create and implement successive marketing strategies.
The definition given by Nueno and Quelsh (1998) fundamentally captures the basic idea of the concept and it seems somewhat overly logical considering the fact that the topic being discussed is quite characterized by emotion and psychology. This is because luxury is subject to perspective and personal preferences. Personal definitions of luxury range from reading a book to going on holiday on an island. Nevertheless it’s important to note that time is a common factor in these scenarios. Some people may view luxury as being able to afford highly costly items and live an extravagant or flamboyant life. There are even those who consider luxury as being unnecessarily profligate and therefore a waste of time while others believe luxury is actually integral and indispensable to the human experience (Mortelmans, 2005). Consequently, the only thing that can be agreed upon about luxury is that its definition differs significantly.
It may appear straightforward, but providing a definition for luxury is considerably more complex than it seems. Rather than a “one size fits all” description, defining luxury is quite subjective and there is a plethora of definitions which are all based on individual perspective and perception (Chevalier and Mazzalovo, 2012). Opinions about luxury may differ from individual to individual or even from one field of study to the other. One person may consider taking an overseas vacation luxury while another may consider it a pedestrian experience. Definitions of luxury may also change with time. A television used to be considered a luxury which is necessarily not so now (Kapferer and Bastien, 2012). The iconic designer Coco Chanel once famously said: “luxury is a necessity that begins where necessity ends”. Luxury is more an object of craving or wishing than it is of needs or necessity. It also has to be quite difficult to obtain, or else, there would be no uniqueness to it. Luxury is more adapted to pleasure than utility (Kapferer and Bastien, 2012).
While the consumption of luxury goods are often motivated by social reasons (Vigneron and Johnson, 1999), Berthon et al. (2009) have argued that luxury is significantly linked to pleasure, since luxury goods are purchased to satisfy hedonistic wants and a psychological schism is created between luxury and ordinary goods which are more often purchased for utility or functionality (Denizer, 2005). In attempting to detach luxury from the social aims of exhibiting societal class, wealth and uniqueness, complications arise due to the emotional and changing characteristics of luxury (Wiedmann et al., 2007). Take for instance that it is possible that buyers begin to develop an impression about luxury products being exceptional and beyond the ordinary (Hansen and Wänke, 2011). Luxury goods have been known in a lot of cases to arouse feelings of being distinct and unique (Phau and Prendergast, 2000). On the other hand, luxury goods can also create an assurance of being genuine, making the buyer feel safe from falling victim to the purchase of fake products (Turunen and Laaksonen, 2011). Luxury goods have even been known to remarkably create an “out of the world experience” for users, stirring intense feelings and emotions (Carú and Cova, 2007), with the assumption that the limited availability influenced by conventional opinions of luxury does not affect the buyer’s demand for it (Bauer et al., 2011). Aside this fact, luxury, due to its subjectivity, may also be viewed in a different way based on the circumstances surrounding consumption of such goods (Phau and Prendergast, 2000). Berthon et al. (2009) suggest that there may be variations in individual opinion about luxury depending on a given point in time as well as in location. National variations have also been observed, for example, Italian and French consumers are of the opinion that luxuries are an integral aspect of their lifestyle due to their traditional history (Aiello et al., 2010). On the other hand, Asian consumers associate luxuries with factors like tribal or religious leanings and social standing (Hennigs, 2012). These show that the views held about products by various people differ based on nationality and culture and ultimately, their opinion on what counts as luxury will equally differ along these lines (Wiedmann et al., 2007).
A system of guidelines for placing value or worth on luxury goods by the consumer has been developed by Wiedmann et al. (2009). This model recommends four basic divisions of value derived from luxury goods by customers, which include: 1) functional aspects 2) financial aspects 3) individual aspects and 4) social aspects. Unlike Vigneron and Johnson (2004), the model does not employ the eye-catching consumption model; rather, its central point is based on the consumers’ individual observations and experience of luxury goods. Among these are factors like the financial parts of luxury and the functionality of the luxury goods in aligning with the consumer’s personal values. Through these, the framework seeks to provide justification for the manner in which consumers make use of luxury goods. Tynan et al. (2009) have also developed another set of guidelines for luxury goods which is premised on a study discussed in Smith and Colgate (2007) on customer value creation which correlates with the service approach to the co-creation of value as recommended in Vargo and Lusch (2004). According to Tynan et al. (2009), consumers of luxury are dynamically involved in the creation of value by their consumption of luxury goods. The social as well as individual aspects of luxury were studied separately by Weidmann et al. (2009). Tynan et al. (2009) integrated the two features to provide a definition of symbolic value.
2.1. Price as a classifier of luxury and non-luxury
Price has been defined by Kotler et al (2008) in two ways: A) The financial price demanded for a product or services and B) The abstract of all values traded for the product or service. In deciding if a product may be seen as luxurious or not, consumers often take price as the first factor to consider. Luxury brands utilize a superior pricing system; this is due to the fact that consumers of luxury products are not very sensitive to changes in price. The increased costs of luxury goods compared to similar but ordinary products are often attributed to the non-material advantages afforded to the consumer by possessing those goods. Consumers also cite better quality, uniqueness and a more established brand name as justifications for the extra costs (Okonkwo, 2007). As per the description of Kapferer and Bastien (2012), a high price is insufficient principle for luxury.
Despite the fact that luxury goods are always high-priced, being expensive is in itself not a sufficient criterion for classifying a good as luxury. However, brands that produce luxury goods need to be intensely cautious in fixing product prices. A luxury brand may easily harm its reputation and significance by accepting prices below a particular standard being expected by consumers. This is because consumers associate price with quality, status and value (Arora, 2013).
Turner (2016) conducted a study in order to determine how consumers would define the term ‘luxury products’. The study was conducted in the North Carolina and the study featured quantitative as well as qualitative methodology. The researcher undertook a sample of 239 participants and the study was conducted using a questionnaire model. The researcher considered different factors in determining the meaning of the word luxury; including price, quality, lifestyle and exclusiveness. The following figure shows the results generated from questionnaire. The study concluded that price and quality were the most predominant factors that helped consumers in understanding whether a product is luxury or not:
Figure 1: Consumer Perception of Luxury Brands
Source: Turner (2016)
2.2. Quality as a classifier of luxury and non-luxury
The study conducted by Turner (2016) also helped in determining that quality was among the key factors that consumers linked most with luxury brands. The following are the final results of this study and it is evident that consumers perceive quality as key factor while classifying luxury brands and non-luxury brands:
Figure 2: Consumer Definition of Brands
Source: Turner (2016)
Luxury brands should always produce high quality goods. The statement in this subtopic does not refer to products alone; services provided by luxury brands should also be of the highest possible quality. Luxury consumers have an expectation that goods have a quality that is proportionate with the outrageous prices they are paying (Chevalier and Mazzalovo, 2012). It is logical that the quality of a product is dependent on the quality of materials used in producing it. In order to meet up with the expectations of their customers, luxury brands must therefore make use of the best raw materials available, in order to turn out superb quality products. As an example, luxury cars should be produced from the finest metal alloys. Immense skilfulness and detailed accuracy should distinguish the production of luxury goods (Okonkwo, 2007). Apart from deliberate defects in hand made goods that add a feel of humanity, luxury products should be held up to a high level of flawlessness with uncompromising quality control procedures in place to eliminate errors (Heine, 2012).
Another aspect where a high level of quality is required for a given luxury product is in its design. Being able to keep up with the times both in material quality and design is important for a given luxury product. The consumers must find themselves being able to use it over a significant period of time; even throughout their entire life if possible. Just like masterpiece paintings that are expensive even despite being many years old, a luxury good should both be relevant at the present moment and also be indicative of the past (Kapferer and Bastien, 2012). Also, beyond just the quality of a given luxury product, the brand itself should carry impressions of uniqueness and distinction in areas like staff dressing and behaviour, corporate culture, and even tiny details like office décor (Chevalier and Mazzalovo, 2012).
Wiedmann et al (2007) conducted a study in order to evaluate the meaning of luxury brands among the consumers. The author undertook quantitative study and used the SEM model in order to determine the results of the study. The researcher concluded that the functional value of a product plays a key role in helping consumers to differentiate a non-luxury brand from the luxury brands. However, the author notified huge discrepancies in the results from the consumers. Frank and Johnson (2004) also stated that mishaps have often occurred in many brand products showing compromise in quality, such as Samsung Note 7; these affect the image of brands however consumers continue to purchase from such brands, showing that quality may not be the sole indicator of luxury products. There are several different aspects that help consumers to differentiate these products from the non-luxury items.
Husic and Cicic (2009) conducted a study to determine the factors leading to the use of luxury brands. The author conducted the study in Europe, using a questionnaire model. The study concluded that the most popular reason leading to consumption of luxury brands is the quality associated to the brand. The customer has a high trust in the quality provided by these brands and the trust in quality tends to grow over time and after every use or purchase. Beverland (2004) also included that these brands do not compromise on their quality while refunds or return privilege is provided to consumers at times of mishaps that further attest the quality standards of the company.
2.3. Visual aspects as a classifier or luxury and non-luxury
For the companies that sell luxury brands, enhancing the actual experience of their customers is vital. Luxury brands are significantly different from the mass brands and use a very different approach in building their brand value and image. There are different aspects that become the building blocks of a luxury brand and among these aesthetics and other visual aspects hold great importance.
According to Grigorian and Peterson (2014), as customers perceive a real luxury brand, they may consider a range of visual aspects; including icons, symbols, shades, designs, pictures, colours, logos, monograms and many more. Bottega Veneta is among the popular luxury brands and the company does not use a logo but customers distinguish the brand through its unique leather pattern. Chanel can be used as a common example of how luxury brands may be distinguished using aesthetics and visual factors. The company uses intervened C’s and any customer can recognize Chanel through these logos. Silverstein and Fiske (2003) stated that the stronger image a luxury brand holds, the more stronger and recognizable will be its visual aspects. In the case of the Apple iPhone, the company uses the same aesthetic design in all of its Apple phones and the customers can easily distinguish any non-luxury phone from an Apple IPhone. Baker et al. (2002) stated that there are many other examples, thus it can be concluded that the visual aspect can help customers in separating a luxury brand from non-luxury brand. However, Kapferer and Bastein (2009) strongly contest this proposition and stated that visual aspects alone can never help in classifying a brand. Quality and price are essential factors since there are a number of copy non-luxury products in the market with the same visual aspects.
Every luxury product must carry a measure of aesthetic appeal. There are similarities between luxury and the broader field of art in the sense that they both necessarily require significant levels of creativity, they both depend on individual perspective and they both revolve around providing pleasure. The similarities between luxury and art are most highlighted by the observing that luxurious goods place a higher premium on pleasure than utility (Kapferer and Bastien, 2012). In selecting luxury goods, consumers are attracted by elegance and potential gratification; this attaches a high level of importance to aesthetic factors for luxury goods. This point is reinforced by the fact that the interplay and combination of visual effects like shapes and colours are strong emotion triggers (Chevalier and Mazzalovo, 2012).
2.4. Uniqueness as a classifier of luxury and non-luxury
Luxury brands are often associated with scarcity and uniqueness, which are factors that make luxury more attractive (Fionda and Moore, 2009). For luxury brands therefore, scarcity is crucial. Despite the fact that the scarcity of most present day luxury brands is artificial, scarcity may either be due to natural or artificial causes but regardless of the source, the inability to gain access to a commodity increases its appeal to people, this therefore motivates luxury brands to find ways of inducing scarcity (Kapferer and Bastien, 2009). Kapferer and Bastien (2012) have compiled five various types of scarcity differentiated by Bernard Catry, namely: technical scarcity, physical scarcity, scarcity of production, scarcity of distribution and lastly informational scarcity. Physical rarity occurs when there’s a shortage of raw materials required to manufacture luxury products. Raw materials like solid minerals or metals that are only found in specific areas of earth with harsh weather conditions or various parts of animals that are considered endangered species fall under this category. Also, people who are skilled with technical capabilities in highly difficult or obscure fields may be in short supply. In the case of technical scarcity however, the drive to put up an appearance of scarcity is explained by invention and the development of novel attributes to achieve uniqueness. Scarcity is created in production by releasing special editions in small quantities despite high demand, thereby requiring purchasers to pre-order such products, thus increasing their mystery and appeal (Kapferer and Bastien, 2012). In the same manner, scarcity can be created through distribution, by limiting the availability of the brand’s products to a limited number of locations and ensuring that they can only be purchased via specific outlets. Scarcity can also be created through informational scarcity, which involves using the tools of advertising and communication. Gossip about the products may deliberately be created and adverts using specific words like “unique”, “rare”, or “exclusive” are all means by which informational scarcity may be obtained. Among the forms of scarcity listed above, physical scarcity is the only one which cannot be directly influenced (Kapferer and Bastien, 2012).
Presently, luxury brands take advantage of the production as well as distribution scarcities as sales tactics. Okonkwo (2007) makes the case for the importance of closely monitored distribution systems in creating and sustaining an ambience of uniqueness around luxury products, he goes further to suggest that stores owned by the brand itself are the most appropriate outlets for the sales of luxury goods due to the fact that it grants the brand immediate authority and control over the manner of sales of its various products and even in the physical appearance of the store itself. This assists in making the desired impression on buyers. As observed by Keller (2009), specific market segments also require well moderated distribution systems. In discussing scarcity in relation to brands classified as luxury, uniqueness is another concept that is highly important. Buyers of luxury products have a feeling of being distinct and superior, uniqueness is important in creating this feeling of superiority, as it is often the selling point of luxury products. The source of the uniqueness, either factual or artificial, is not important, the important thing is whether the consumer has an opinion of uniqueness about the brand or not. Consequently, uniqueness is as important as scarcity to the success of a luxury brand (Kapferer and Bastien, 2012).
Emerging markets are one of the most promising areas of research in respect to the global market for luxury brands. Given that these emerging markets are both complex and dynamic, profiling the markets and demographics within would allow brands to establish their market share at an early stage in development (Vigneron & Johnson, 1999; Hennigs et al. 2013; Farley & Lehmann, 1994; Chen et al, 2016). According to Hagtvedt and Patrick (2008) it is highly important to identify whether the global luxury market is growing or declining for the marketers as well as for the entrepreneurs seeking to expand in new regions or enter this market.
There is evidence for the rapid growth of the luxury markets in countries like China and India given their recent growth in GDP. The emerging markets are referred to in the context of the BRICS group of nations i.e. Brazil, Russia, India, China and South Africa (Vijaykumar et. al, 2010). It is estimated that 85% of all new luxury stores will be opened in emerging markets, with India and China being the leading consumers of such brands in these regions (Stiehler and Tinson, 2015; Krauss, 2009). It is estimated that the market for the two countries is in the order of several millions each (Tak & Pareek, 2016; Chen et al., 2016). Moreover, these markets are concentrated in the high-end sections of metropolitan cities. This is highly favourable for the luxury store business model, given the quality foot-traffic in these areas. The growth of these markets is attributed to a number of factors including increased product choices at various price points, GDP growth rates and the emerging dominant middle class (Mankiw, 2014; Chen et al., 2016). There is enormous potential which must not be underestimated, given any preconceptions regarding the country of sale being a developing nation. Evidence from Brazilian markets for instance, shows that certain make-up brands sell at prices higher by 80% than those at the country of origin (Silva-Buck, 2013; Stiehler and Tinson, 2015).
According to Walley et al (2014), the perception, wants or needs of the customer differ from one region to the other; since the culture, education, values, beliefs and traditions of one region are highly different from the other. As a result, the growth in the luxury sector is different from one region to the other due to preference and culture. For example, the preference of food is different in China when compared to India or America. Similarly, preference of luxury clothing or other products differ from one region to the other. A study was conducted by Walley and Li (2014) regarding the luxury market in China. This included 200 respondents from the streets of Beijing and the interview focused on simple Why, What and How questions. The article discussed observing the behaviour of the customers that were either planning to purchase luxury products or were constant users. The result suggests that there is huge potential in the market to grow in the coming years.
Several studies have been conducted that highlight growth in the luxury market. A recent study was conducted by Seo and Buchanan-Oliver (2015) that highlighted different trends in the luxury market and predicted future movements as well. The study was qualitative in nature and it concluded that over previous years, luxury brands have developed a unique branding that conveys unique socio-cultural and individual meanings in their marketing. These meanings are designed through cultural, societal as well as international trends that shape the consumer understanding and adoption of a luxury brand. Furthermore, there is a growth in consumers that use brands for quality, trust and as a sign of prestige in society; thus the market will continue to grow in the future (Berthnon et al, 2009).
The media is highly influenced by western marketing practices, and in turn, western lifestyles and experiences are increasingly being sought-after, which are then associated with the appeal of luxury brands (Belk, 1999 cited in Shukla, 2012; Stiehler and Tinson, 2015). According to Charriaud (2013), the apparel and footwear sector dominates the luxury brand category in India. Other popular items include accessories, home improvement products, food and beverages, electronics and automobiles. International brands are more popular than national brands in India. The dominance of the international brands is evidenced in their increasing presence in places such as NRC, Mumbai, and Bengaluru (Charriaud, 2013). Top selling international brands are from Europe and the US. Unlike in Europe or the US, where the street luxury retail landscape is the trend, in India, most of the premium brands prefer to operate from high-end hotels and luxury malls. High-end brands are shying away from the main streets because of they are prone to traffic congestions and lack quality space. In considering the Indian market it is important to address the following nuances that distinguish it from western buying markets, which are to be considered in addressing each of the research questions.
The country of origin effect is a widely debated topic in marketing. Some experts think that it affects brand performance in a market, while the opponents maintain that it has little effect on the success of the brand. However, what is not disputed is that the country of origin (COO) is a factor that significantly influences buyer perceptions. Moreover, Arora et al. (2015) note special correlations between COO and Country of Manufacture (COM) and buyer perceptions. For instance, in considering diffusion brands vs. parent brands, the former is preferred when there is congruence, while the latter is preferred when there isn’t congruence (Arora et al, 2015). The modern Indian affluent class has high brand consciousness and is more informed of luxury products and fashion trends than the rest of the population.
There is evidence that suggests that buying habits of luxury clothing in India are largely influenced by the country of origin. The consumers prefer products from European countries and the U.S as opposed to the local products or from emerging markets such as China (The Moodie Report, 2006). According to the research published by Cushman & Wakefield, the European luxury clothing brands take 60 percent of the luxury apparel industry in India. The U.S takes 30 percent, while other brands are left with only 10 percent to share. Many consumers prefer international brands to local brands. Brands such as Prada, Gucci, and Hugo Boss enjoy more visibility and presence than Allen Solly, Louis Philippe or Peter England brands. Numerous factors influence Indian consumers’ decision in the purchase of luxury clothing. Some of them include pricing, the brand, the country of origin and location of the retail store. For example, premium outlets are more visited than street retail stores.
4.1. History and roots of luxury consumption in India
Wong and Ahuvia (1998) explain that luxury has always been clearly connected with society’s rulers and upper class citizens. India is also in line with this rule. JaIn (2013) studies the huge power the Maharajas hold. The researcher suggests that it isn’t just that the original luxury consumption pattern has altered into the modern luxury market, but it is also such that India’s culture has had a direct influence on its choice of luxury brands.
The paper by Dave and Dhamija (2013) records the custom pertaining to luxury in India during a period where Maharajas were the specialists in luxury and satisfied them with classy handmade products. Several examples abound where international luxury goods met the needs of the Indian royals. Cartier accepts its early relations with the Indian Maharajas as seen in the Patiala necklace created for Maharaja of Patiala, Bhupinder Singh. The French jeweler Chaumet sold 2 Golconda diamonds to the Tukoji Rao II of Indore. Boucheron was hired to produce a belt buckle decorated with emeralds, rubies and diamonds by Ganga Singh of Bikaner. Even champagne was a regular feature in the extravagant lives of members of royal families. Quite interestingly, the Maharaja of Jaipur was given the nickname ‘Bubbles’ at his birth due to the volume of champagne which was guzzled during his birth ceremony in the year 1931 ( Telegraph, 2011).
The custom and tradition of luxury during this historical era still has a powerful influence on modern-day Indian luxury. Several Nizams and Maharajas have converted their properties to luxury tourism sites, examples includes Shiv Niwar Palace in Udaipur (HRH Group of Hotels) and Falaknuma Palace in Hyderabad (Taj Hotels Resorts & Palaces). Indian designers have achieved success in their efforts to blend the rich textile history of India and stitching artistry customs. Examples are Ritu Kumar who applies Indian handicrafts like chikan, zardozi and bandhani in her works and Abu Jani-Sandeep Khosla who is popular for this excellent chikankari wears. The art of jewellery production was equally supported by the royal family, an example being meenakari, which is also known as enamelling, which was brought to India by the Mughals. Enamelling is still seen as a specialist practice and is believed to be an essential part of several luxury jewellery designs. Indian luxury is not particularly a contemporary addition, but rather has deep roots in lasting traditions and an important history. Over the years, the market has grown tremendously with new brands as well as product categories emerging in the market. Recently, the Indian clothing luxury sector has over 500 brands while on the other hand, the industry has grown into a giant industry.
4.2. Growth in affluence
The few elites in society have a lengthy tradition of luxury spending and are used to a life of luxury, which involves overseas shopping and the purchase of Western luxury goods for centuries. These elites are made up of the offspring of those that belong to royal families, the small rulers, the nawabs and the industrial families like the Godrej, Birlas, Mahindras, Tatas and Bajaj (Chadha and Husband 2007). Juhi Ramakrishnan explains that although the high-end market has always been available to tap into, it has not had the opportunity to pick the types of products it sought. Now with premium brands coming into the country, there is a wider choice of what to buy (Chatterjee 2007). Nevertheless, these elites are no longer the sole luxury market customers in India, nor are they the dominant target market. The relative rise of the Indian middle class has led to a different and fresh pool of luxury buyers. These new consumers do not have wealthy backgrounds, but rather they are ambitious, focused on their careers and they have high hopes for the future. Their level of luxury consumption isn’t just noticeable but based on self-gratification. The economic potential of this ambitious middle class may be worth noting. Data collected from the Boston Consulting Group, described in Silverstein et al. (2012), revealed that India’s middle class, having an average household income of 6,700-20,000 USD, will enjoy a rise in number from 63 million in the year 2010 to 117 million households in the year 2020 i.e. 45% of total households, while the upper class, having an average household income of more than 20,000 USD, will enjoy a rise in number from 9 million in the year 2010 to 32 million households in the year 2020 i.e. 12% of total households.
4.3. Digitisation of luxury business
The digital world has had an effect on the workings of marketing as it relates to luxury brands. Luxury brands now have the ability to connect, engage and communicate with their buyers irrespective of their physical location. India, though lagging behind the other fast-rising markets, has sufficient evidence proving that it is ready to accept digital luxury. Based on the findings of a Boston Consulting Group research, the amount of Internet users in the country has almost tripled from an estimated 125 million to 330 million in 2011 and 2016 respectively. Quite fascinating is the report that 45% of urban dwellers having Internet access connect only with their mobile phones (Subramanian et al. 2013). This increase in Internet use, most especially among people aged 18 – 35 years, will positively affect the digital control of purchases of luxury products, either it is an information search, exploiting an improved service offering or even really making a purchase online. Jain (2013) notices that more than 50% of the Indian population is below the age of 35 and is this well-off, travelled, millennial section of the society that is the consumer of luxury. However, till today, most of the international luxury brands haven’t started using local digital techniques. A few of them were, however, already taking advantage of social media, examples are L’Occitane and Sofitel. Conde Nast, an Indian GQ application is another example. It was created to inform Indian men about luxury lifestyle trends and it is being sponsored by popular brands like Chivas and Mercedes-Benz. Also, another app known as ‘Uncork France’, built by Sopexa India for IPhones and focused on the Indian people, informs wine consumers about French grapes, wine regions and best wine-cuisine pairings. The Internet and Mobile Association of India (IAIMA) reports that the country’s online market has increased from 250 million USD in 2008 to 6.7 billion USD in 2015. This digital platform will equally assist in enhancing the coverage of luxury sales, given that it is expected to get to tier 2 and 3 regions faster when compared to retail chains. It’s important to realize that 34% of Internet users hail from tier 2–4 regions (Subramanian et al. 2013). Web based platforms like fashionandyou.com and elitify.com have provided luxury brands for customers living within these areas. Thus, it can be concluded that the market of luxury retail has grown tremendously over the internet. One of the key reasons is the access to worldwide luxury products on the online marketing websites. These websites are well designed for easy use and use indifferent marketing techniques to attract large number of potential and regular customers. H&M has also opened online store and delivery booking for the convenience of its customers and similarly several other brands have also adopted this technique (Mitra, 2015).
4.4. Consumer gender
Rajput, Kesharwani and Khanna (2012) carried out certain important studies on Indian female and male consumers of luxury fashion goods. From their analysis, they discovered that Indian female and male consumers are similarly attracted to shopping, however the males spend more than the females when buying luxury fashion brands. The researchers were not able to discover any considerable impact of gender on the purchase decisions of Indian buyers with respect to luxury brands. In the same vein, a lot of researchers believe that gender had no effect on luxury purchases (Srinivasan, Srivastava and Bhanot, 2014).
The contemporary and urban dwelling Indian female is a huge economic opportunity in light of luxury brands. The latest release of the Mercedes-Benz A-Class also points to the readiness of luxury brands to claim a higher percent of the Indian female market. Global luxury brands have to identify this potential, however, they also have to relate with them differently for them to successfully convince the female buyers. An example of the way special content affects the Indian subconscious is the Indian release of Vogue. Similarly, Tanishq, Tata’s company and the biggest jewellery seller in India, created the sub-band Mia aimed at working women in the age range of 20 – 30 years. Their aim was to make Mia a jewellery brand which is appropriate for weddings and social events and also showcases the person and the unique features of a professional woman. Mia became successful not only because of its jewellery design but also by its brand story. For instance, females were asked to ‘Share Your Courage Story’. Luxury brands create a number of emotions which ‘relate to the multisensory, fantasy, and emotive aspects of one’s experience with products’ (Hirschman and Holbrook 1982, p.92). Interestingly, when a study of apparel-shopping trends was carried out, McKinsey revealed that 82% of Indian female respondents plan to purchase clothes. This number is surprisingly high, in comparison to 26 percent in China and 27 percent in Russia (McKinsey 2007).
4.5. Trends in Luxury Market in India
It is forecasted that in 2025, global buyers will focus more on luxury brands than it is the case in the present. The fast-rising Asian markets will be the leading luxury markets (Bain, 2014). Deloitte’s (2014) reports that India was the biggest luxury market globally in 2012. Even though Indian luxury goods are available, both online and in stores, most of it is sold in luxury malls and stores and just a small percent is purchased online (Euromonitor, 2015). Ramchandani and Coste Maniere (2012) discovered from their survey that Indian buyers majorly bought jewellery (~17%), watches (~18%) and fashion goods (~21%) as opposed to other luxury good categories. This is shown in Figure 3. A number of demographic changes among the Indians have improved the ability of buyers to procure luxury brands. Globalization and higher number of jobs have also impacted the consumption levels of India’s younger generations (Gupta, 2011, 2012). Materialism equally impacts their buying decision (Gupta, 2011, 2012). Thus, various researchers have classified Indian luxury based on their opinions. McKinsey (2007) explained that, striving people, global Indians and seekers form the major buyers of luxury goods. Their luxury good consumption differs based on each group’s yearly disposable earnings.
When the countries that were the most brand-aware were ranked, India came third (Mukherjee et al., 2012). The level of consumption amongst the Indian younger generation is affected by better stylish design, higher brand awareness and enhanced product quality. Several of these people prefer to shop in the luxury stores which would allow them to select from a varied collection of fashion goods (Tanksale, Neelam and Venkatachalam, 2014). Rajput, Kesharwani and Khanna (2012) discovered that female and male shoppers alike have quite similar luxury brand awareness.
Increasing attention past the tier-1 cities and the metros is helping the rise of the Indian luxury market. Kotak Wealth Management Report (2015) explains that metro cities produce 56% of all the luxury market income while the remaining 44% is generated from the smaller towns and cities (Figure 2). Promoting luxury products brings about the increased growth within this sector. Luxury isn’t just for traditional luxury purchasers any longer, rather, a high percentage of the luxury demand from the country would likely be from upper middle class persons who work towards purchasing these products. As a result of their increasing income levels, these people are encouraged to rise up the consumption ladder. These emerging and wealthy buyers are seen as major targets for luxury brands all over the world (Shukla, 2011). The Indian market is attracting the attention of a huge number of international luxury organizations. Several firms are developing entry-level luxury products to take advantage of this group’s potential (Assocham, 2014). Firms like Burberry India, LVMH and Hermes India Ltd among others are all focusing on inexpensive luxury to take advantage of this emerging market (Euromonitor, 2015).
5.0 Country of Origin (COO)
Previous studies have acknowledged that customers use COO as an indispensable factor to appraise commodities. The reputation of a product depends on its country of origin, and a majority of purchasers would always contemplate while buying clothes (Agrawal and Kamakura 1999). Miller (2011) in his study verified that a brand plays a substantial role in building the COO image of any product. Almost a quarter of consumers make buying decisions based on COO information; even large companies validate that. There is enough evidence to confirm that COO does affect the credibility of a product (Verlegh and Steenkamp, 1999). Many types of researches contemplate buyers’ reactions to actual COO. Regardless of different type branding being practiced worldwide, academic research that answers questions about the efficacy of implied COO practices, such as foreign branding about COO, still needs more work (Gurhan-Canli and Maheswaran, 2000).
Country Image Defined
|“…the picture, the reputation, the stereotype that businessmen and consumers attach to products of a specific country. This image is created by such variables as representative products, national characteristics, economic and political background, history, and traditions.”||(Nagashima, 1970)||Socio-economic perspective|
|“ ..The aggregate
image for any particular country’s product refers to the entire field associated with that country’s product offerings, as perceived by consumers.”
|“.. Variables of the country image affect belief about products rather than consumers’ attitude. All the above-mentioned research point out that country image has no direct impact on consumers’ attitude, but it can indirectly affect consumers’ attitude through product evaluation.”||(Erickson, Johansson and Chao.,1984)||Social-cognitive perspective|
|“By analysing and evaluating the image taking into account several factors, such as individual traits, characteristics or emotional and functional benefits, etc., not just the overall image of an object/person.”||(Dichter,1985)||Psychological perspective|
|“A unique way of information processing and recording in the memory.”||(Macinnis and Price,1987)||Cognitive perspective|
|“Country image is the overall perception consumers form of products from a particular country, based on their prior perceptions of the country’s production and marketing strengths and weaknesses.”||(Roth and Romeo,1992)||Marketing perspective|
|“A total of all descriptive, inferential, and informational beliefs about a particular country.”||(Martin and Eroglu, 1993)
13 Items Representing Political, Economic And Technological Factors.
|“Country of origin image refers to buyers’ opinions regarding the relative qualities of goods and services produced in various countries.”||(Parameswaran and Pisharodi, 1994)
12 country image items that reflect interaction facets (perceptions of political, cultural, and economic similarity to Source Country)
5.1. Country of Origin and luxury products/ clothing
The brand exposure and Country-of-origin affects consumer behaviour. Numerous studies have analysed the connection between COO and brands also considering one’s personal views and purchasing power. The qualitative sensitivity to a product becomes more positive when the brand identity and the COO perception is unified (Haubl and Elrod, 1999). According to Pecotich and Ward (2007), when consumers become aware of a brand, the brand acquires a universal image that integrates some elements. Furthermore, consumers who are acquainted with a product brand are more inclined to give less consideration to detailed information, price or COO, regarding the brand manufacturing. On the contrary, when consumers move from product perceptions to the intentions of purchasing, the brand wields more influence in comparison to COO.
Using brand names induce foreign linkages. In developed or developing countries, specific country of origin (COO) is used to invoke hope that it will persuade customers that the product has certain qualities. Due to which, consumers mostly come across products with different brand names that imply a COO that is entirely different the real COO or the manufacturing product country. The difference of actual COO and inferred COO reduces the likelihood of purchases. Incongruence doesn’t affect utilitarian categories but miserably fails in hedonic categories. Moreover, incongruence causes a more significant decline in product purchases if the actual COO belongs to a developing country. These results have significant effects on foreign marking decisions.
Consumers give importance to a brand by its country of origin. The concept of ‘Country of Origin’ (COO) in marketing is termed as the country where the product was manufactured (Tse and Gorn, 1993). With the increasing cross-border trades and increase in globalization, researchers are trying to unravel the role of COO and how it affects various management events, mostly focusing on cross-national consumer behaviour. A research conducted to study the impact of COO on Indian customers attested to that consumers’ buying decisions and brand’s COO are interlinked. It not only proved that consumers give immense significance to a brand by its COO (Kinra,2006).
One study cross-analysed the power of COO and consumer tastes. Maheswaran (1994) considered two countries with different mind frames and lifestyles: the USA and Japan. The subjects were chosen with careful consideration, keeping in mind social elements, economic factors and COO awareness. The Japanese respondents favoured the products from their own country, irrespective of the superior quality. In comparison, United States respondents evaluated the product by superiority in quality and opted for products even irrespective of the country of origination. Global marketing practices in every country featuring country of origin impacts the mind-sets of the buyers.
5.2. Country of Origin effect in India
COO effects correspond to consumers’ intuition in assessing the product quality from several countries and making purchases based on their decisions. Chinen et al. (2000) observed a positive correlation between the consumers’ willingness to buy and the level of economic development in the country. They verified that the consumers’ perspective varied from country to country. For instance, US consumers will forgo COO and go for higher quality products. Whereas, Japanese feel the quality of product from their country is far superior to other countries. Similarly, consumers in developing countries would opt for clothes belonging to international brands and countries. They further verified that market presence and quality of product influence the customers’ ‘intention to buy’. The COO effect is linked to consumer perception about certain products belonging to a particular country.
In the international market, it is essential to understand how a product’s COO will affect consumer assessments (COO research). Relatively few COO studies on luxury goods in developing countries are available. Usunier (2006) explored the role of COO and its influence on consumer choices and companies alike. There is a relevance gap in studies about COO in India. By investigating the COO impact of luxury cars on Indian metro customers, he assessed the effects of COO on the Indian population. His study was not helpful in establishing a clear picture about how customers evaluated brands, but it was found out that COO helped consumers to assess and decide what product to buy. The country of the product manufacturing was crucial to the consumers. Identifying what influences the preferences of customers still needed more attention (Usunier, 2006). One thing that was verified is that the COO influence was vital in buying luxury goods in comparison to essential products (Piron, 2000). When it comes to luxury brands, COO has a more significant influence on a product rather than the price in product quality evaluation (Wall et al., 1991). Most of the researches conducted on COO effects focus on developed countries. Governments endorse locally made products and urge people to buy local products. The expectation is that the COO effect will work methodically to influence purchase inclination favouring locally-made goods. These researches reveal that there is a higher preference for domestic made products over foreign products, especially when product information is missing (Elliott and Camoron, 1998).
Jin et al. (2006) in his study observed that most customers could not even recognize brand origin, but some are expert in guessing them correctly. He stressed on the typical Indian consumer mind-sets. When there is a record of localization for a particular product, the recognition power diminishes. The research provided insight into the brand origin and that it is a valuable concept for companies participating in emerging Indian markets. The evolution of this idea over time requires meaningful consideration if companies want to add significance to its product through brand origin association. It was also assessed that higher income groups preferred foreign brands.
Further researches have shed light on the limitations and implications of COO in a fast developing market. It was seen that the foreign brands quality was usually observed to be far superior in comparison to local brands. Most customers related greater availability of quality international brands in the Indian market with lower prices.
Irrespective of increased nationalism and domestic product manufacturing as shown in high factor evaluations, there is still bias in buying local brands. When seen in comparison to other countries, Indian buyers favour the foreign brands. In fact, they assessed international brands on the basis of quality, technology and status and have associated Indian brands with lower quality. All in all, this gave higher credibility to COO in the case of foreign brands. The marketing strategy of placing foreign products in the Indian market should be by technology, quality, credibility and brand recognition in India. COO recognition is based on all these factors, as well as consumer awareness (Kinra, 2006).
India is an emerging market for luxury brands. Previous studies examined the link between brand recognition and country of origin (COO) knowledge, in a franchising context. The accuracy of brand‐COO expertise is found to be positively related to COO image. When consumers don’t have enough brand‐COO understanding; it leads to confusion as well as negative image about COO. Economic and social elements such as education, social class, and travel undoubtedly influence COO-brand awareness. A study conducted in the emerging Indian market, offers research and marketing suggestions, particularly for multinational companies.
Paswan and Sharma’s (2004) proposed that COO image is affected by the brand-COO information. COO provides a competitive advantage for the brand by enhancing the brand’s salience in customer perception. Based on their research it was evident that in a country like India, brands that can create higher levels of COO awareness are expected to increase buyer perception about the COO image. All those luxury brands that fail to consider brand-COO understanding are more susceptible to misinformation and gossip in the marketplace. Bandyopadhyay (2001) also recognized that perceptions can differ from country to country. Also, consumers hold varying opinions on value, quality, price, availability and promotion.
6.0 Luxury clothing in India
India is one the most attractive countries in emerging markets for luxury clothing, because of the rise in numbers of middle and upper classes, and the rise in sale of luxury goods in general and clothes in particular. There are a number of international luxury brands with outlets and flagship stores in India. The most popular among high-end luxury include Burberry, Alexander McQueen, Hugo Boss, Gucci and Hermes (Fernandez-Stark et al, 2011; Kearney, 2011). However, the more popular international luxury clothing brands in India are the low-end luxury clothing brands primarily: Zara, M&S, H&M, Calvin Klein, Uniqlo and GAP (Fernandez-Stark et al, 2011). However, it is important to note that these luxury outlets are mostly located in the top metropolitan cities in India. New Delhi, Mumbai are prime locations for nearly all luxury clothing brands dominant in India (Kearney, 2011). Bangalore and Chennai are the next set of locations for the more popular brands. Lastly, Hyderabad and Pune are additional locations for the likes of brands with over 15 stores. Mumbai in particular is of relevance, with both North Mumbai and Gurgaon as important recent areas with a concentration of the target market (Kearney, 2011).
Burberry is the most notable of the high-end luxury clothing brands in India. The price range of dresses is in the order of 20,000 to several 100,000 INRs (Burberry, 2017). Similarly, Alexander McQueen has had its footing in India as early as 2008 with its first flagship store in New Delhi (Steele, 2017). It is important to note that high-end luxury clothing market is not limited to western clothing, as Indian clothing forms a predominant part of daily culture, particularly for women. Moreover, a significant market for luxury is composed of people who go to Indian weddings, receptions and special cultural occasions. The traditional luxury clothing stores in Indian cities are designer stores from prominent fashion designers like Ritu Kumar, Pernia Khureshi, Kanika Goyal and Priyanka Ella Lorena Lam. Given the prominence of this unique luxury offering, partnerships with designers have led to branded Indian luxury clothing in International brand stores. Notable examples include Hermes and Mark Jacobs selling branded designer Sarees and Zegna and Canali selling Nehru Jackets (Kearney, 2011).
6.1. The supply chain for luxury clothing in India
Supply chain management can be defined as: “the management of upstream and downstream relationships with suppliers and customers to deliver superior customer value at less cost to the supply chain as a whole” (Christopher, 1998 cited in Holmbom, M., 2016). The key consideration in supply chain management is the maximisation of utility of the chain as a whole, rather than elements within the chain or the stakes of the various players as individuals. What constitutes effective supply chain management is debated considerably in the literature on the subject. However, a common underlying theme is the need for logistics integration both up the chain to suppliers and down the chain to the end-customer (Christopher, 2016).
Kilgore et al. (2007) discuss the reliability of Indian supply chains as they apply to industries such as the apparel industry. Foreign entities newly entering the Indian market must adjust to the lower standards of reliability and speed of supply chain. The study criticizes the logistic infrastructure in the country and suggests that appropriate inventory related strategies be assimilated not dissimilar to those in small-part service industries. Although in this industry, inventory is utilised in management of demand in the face of unreliability of transportation, the principle can be extended to other industries alike. In such a model, inventory considerations are required to be taken at each level of the supply chain to minimise disruption of supply owing to the issues surrounding transportation in India and the management of resulting expenses. In effect this creates multiple distribution points.
Batra et al. (2009) emphasise that in spite of the value in studying India from the supply chain point of view, there is little academic research into the opportunities and threats posed to international entrants into the clothing industry in India. The study characterises the two elements of the infrastructure of this local industry: 1) low retail penetration and 2) ineffective supply chain. Logistics is synonymous with transportation in the Indian supply chain because it is the key bottleneck. However, the costs incurred in logistics are not limited to transportation. Warehousing, distribution points, inventory, and packaging are all essential elements to be considered. The evolution of the supply chain over the coming years is expected to address the evolution of the consumer, with the need for fast deployment of required services in the chain. This is likely to be so in the luxury market, where high competition and high profit margins serve as powerful incentives for supply chain optimisation.
6.2. Future of Supply Chain Management in India
A report by AT Kearney (2017) finds a number of important changes expected to take place by 2025 that supply chain management efforts should take into account (AT Kearney, 2017). The study supports the expectations for supply management by extrapolating a number of key trends currently being observed in the Indian market:
- Greater levels of brand-preferences owing to improved awareness. This is because of the growth of the middle and upper classes, increased access to the internet and social media and growth of the English-educated population.
- Increased segmentation in the market and growth of niche markets. This is because of higher variance in annual household incomes, customised lifestyle design and differentiated values.
As a result, the report anticipates that this opportunity will be exploited by brands through the establishment of new supply chain channels (AT Kearney, 2017). This is particularly so given the heightened role of e-commerce in the sales process and in the accessibility it provides to high-income markets (AT Kearney, 2017). This assertion is validated by the emergence and observed growth of online retailers like flipkart in recent years. Currently, this population disproportionately buys through online channels. Regulations currently in place to promote local industry over global entrants are thought to be eased in the interest of growing consumer demand for these esteemed brands. Products available to the market will therefore increase in multiples rapidly (AT Kearney, 2017). The customer’s appetite for choice will necessitate this. Moreover, the increase in products will not be limited to increased choice within existing categories of products, but the inception of new categories altogether. Products associated with lifestyle will play a special role in this market, as it represents a category the demand for which is both growing and currently young. This category of products will benefit from increased market segmentation, niche markets and variance described previously (AT Kearney, 2017). As a result, the report argues that supply chain network will experience consolidation. Specifically, it is argued that supply chains must respond appropriately to the above listed changes in the market. The network as a collective will be required to transport far higher levels of goods and materials from and to points of manufacturing and other facilities. The integration of the network is anticipated to allow the consolidation of various different transport channels traversing roadways, railways, airways and waterways. The network will also experience industry-wide standardisation, currently under-implemented owing to the relatively recent emergence of market opportunities. However, efficiencies in supply chain management experienced by brands are likely to soon be replicated by competition particularly as they seek to establish dominance on price. This standardisation will include the modularisation of manufacturing, warehousing as well as distribution. Collaboration is likely to take place with businesses specializing in logistics management, leading to the streamlining of channels of transportation between centres (AT Kearney, 2017).
Transportation channels are expected to shorten transportation times owing to a number of technological developments. Railways are expected to be able to transport at a speed of over a 100km/hour (AT Kearney, 2017). Roadways are expected to increasingly become better developed as the country grows as well as the improvement of elements of transportation such as collection of toll and traffic management. Roadways are increasingly going to dominate the means of transportation given their advantages over railways insofar as autonomy and control are concerned (AT Kearney, 2017). The report suggests that the Dedicated Freight Corridor will facilitate the railways. The network will increasingly welcome the support of third parties specializing in logistics and parks for logistics-management and these are already talked about at the Indian railways. They are to be developed alongside the Delhi to Mumbai railway route. Lastly, the report also suggests that supply chains will be required to improve, owing to the demand of increased consolidation. This also implies that distribution will be required to increase its efficiency because the standardisation of transportation across roadways as well as greater containerisation and modularisation. Supply chain management practices will increasingly rely on automation in transitionary movement of supply and goods. Finally, service providers are expected to increasingly become more efficient in line with global standards (AT Kearney, 2017).
The use of various emerging tools is expected to become widespread in use. Sharma and Vyas (2007) discuss the role of Decision Support Systems (DSS). Although the research is exploratory, it utilizes case studies to investigate the practices of players in the retail space in the clothing industry in India. This is particularly in relation to the value in DSS. The study finds that DSS allows for the provision and accuracy of information. It may be utilized as a combined unit that provides supply chain management with appropriate data-related software to facilitate decisions crucial to operation optimization. The study also discusses issues experienced in the implementation of the practical elements of DSS. The study mainly centres around a particular national retail chain selling different brands of clothing. A wide variety of supply chain management tools were part of the repertoire of this retailer. However, the study found that DSS was not used in decision making that required forecasts for total or decisions related to merchandising. Here, conventional experience-based practice was used in making important determinations rather than the data-driven approach.
6.3. Luxury clothing and the Indian retail sector
According to Khare et al. (2012a) for the luxury retail sector, Delhi and Mumbai have the most potential markets. However, non-metro regions including Chandigardh and Ahmedabaad are also developing over time in terms of consumer income and propensity in order to be able to consume luxury retail products. According to Johnson and Tellis (2008) due to the number of wealthy and rich people, India is ranked as 8th in a global context. Over the years, the Indian luxury retail market has witnessed a tremendous growth, due to the latest efforts of India in improving intellectual property rights to protect the designs of the luxury retailers from handloom. India has also introduced a number of reforms in order to promote the luxury retail industry that has encouraged a number of luxury retails to conduct their operations as well as conduct retail in the country.
According to Worstall (2017) when compared to the record high inflation in the past, the inflation of India in 2017 has fallen to a record low and this created some incentives for the retail brands in India. Previously, the increase in price of the retail sector discouraged a large population from purchasing the retail high-end brands. However, since 2017, the prices have declined and this encouraged a number of customers to buy from the retail sector and demand luxury expensive brands that they also can afford. The luxury clothing retail market in India has witnessed good growth. According to Joshi (2014), India is regarded as the ultimate shopping location for luxury clothing brands on the globe. While reviewing the present literature, it was found that there is a lack of studies in the context of Indian luxury clothing market.
Very little work is done in the India retail sector concerning luxury clothing. It is essential to understand the retailing environment in India. There have been studies that examined both micro and macro factors affecting the business sector in a given economy. It was observed that micro-environmental aspects of the economy affect business activities of brands. These elements can directly or indirectly change the nature of business activities (Palmer and Hartley, 1999). Kumar (2007) conducted an assessment of modern retailing in India. It was apparently evident from his research that there is a critical debate taking place in India about various policy issues questions concerning the traditional and modern ways. Both of them are not conforming to each other. The current debate still questions whether consumers and retailers are on the same page.
Goldman et al. (2003) stated that a significant problem was faced by businessmen due to globalization. These issues were more prevalent in immature markets. In their efforts to sell products in emerging markets, there was a deficiency of a well-operated retailing network and proper infrastructure. One way to address these problems was to create awareness about brand management. Project Shakti, launched by Unilever in India in cooperation with NGO’s, the Indian government and banks, focused on sales distributors working on direct-to-consumer sales.
Baseer and Prabha (2007) studied the prospects and problems faced by businessmen working in Indian Retailing. His study exposed vast prospects for retailing in India. Difficulties accompany the possibilities which include high equipment costs and the traditional mind-sets of consumers. Even though the retail sector is proliferating in India, there are various obstacles which still need to be overcome. As the market grows, there will be more ups and downs especially in the area of textiles. There are numerous challenges to improve retailing in India, the most prominent being product development, competitive tools and international products.
6.4. Luxury clothing and the Indian manufacturing sector
According to Phau et al. (2015) the manufacturing sector in India has grown tremendously over previous years along with the evolution of industries. Tewari (2016) stated that recently in India, a campaign was inaugurated named ‘Make in India’ that invited more than 1000 multinational organisations from 60 nations to visit India and manufacture their products in the country. This campaign was inaugurated in the year 2014 and to facilitate it, India made several reforms in its economic structure and created reforms in its FDI system. The manufacturing sector of the country has already hired millions of workers and the technology in this sector is also growing.
Vitanova (2016) stated that along with the growth in manufacturing sector, the country has also witnessed growth in luxury clothing products manufacturing. A number of popular luxury clothing retail chains including Mango, Zara, Levi’s and Forever 2 have already invested a huge capital for manufacturing their products in India. The key reason behind this is the cheap raw material and workforce. Shrivastava (2017) stated that from the view of the luxury clothing market, almost half of the Indian textile industry was handlooms and this sector had huge potential to forge the foreign as well as local luxury clothing brands. Because of recent reforms in the intellectual property rights, several manufacturers have found new incentives to produce luxury clothing products. On the other hand, many retailers now hire handloom during manufacturing in order to introduce products that correspond to India’s preferences. In the literature review, it was stated that there are no available empirical evidences about the current trends and conditions of luxury clothing and Indian manufacturing sector.
The Indian manufacturing sector is flourishing, but the Indian domestic market is highly competitive. Moini (1992) outlines some of the aspects of competitive businesses that affect the whole manufacturing sector. When there are too many similar companies, there will be more competition, fewer business opportunities and less motivation to produce for the international markets (Moini, 1992). India has one of the largest manufacturing sectors and caters for global markets too. There is always pressure on businesses to fulfil local demand and then extend to other countries. There is a total of
70% apparel production to satisfy local needs.
Shukla (2011) studied the behaviour of Indian buyers and examined the interpersonal effects of branding. He stressed that consumers have immense power to shape up the accessibility of luxury products. Indian consumers provide the most information about interpersonal influences when compared to people from other counties. It was also observed that Indian market has increasingly started to depend on branding cues. Furthermore, brand image was considered an essential moderator between luxury purchase and normative interpersonal influences. Thus, the effect of culture on luxury brands purchase was also reflected, but other demographic variables were not considered in this study.
6.5. Luxury clothing and the Indian agricultural sector
The literature on this subject is lacking with most academic sources focusing on the organic clothing and ethical aspects of the subject. However, the research proposal presented here focuses on the supply chain advantages offered by Indian agriculture. Indian supply for cotton, wool and other fabrics is utilised extensively for international luxury clothing brands centred on export. However, the emerging market within India for luxury clothing is likely to benefit owing to the same advantages offered to international sales. Moreover, the proximity between supply and demand is expected to lower costs and increase the benefits of process management. There are two elements of the supply chain that are unique to clothing industry. These are: 1) agricultural and chemical suppliers and 2) textile firms (Cao and Dickson, 2017). In considering that a number of luxury brands already have supply operations in India, these can be expanded to accommodate the growing local market.
India is known for a strong raw material production capability especially in the case of fabrics. India is among the 4 largest cotton crop producing nations in the world (Townsend and Sette, 2016). Moreover, the Indian textile industry has the infrastructure in place to produce all varieties of fabrics. Since most of its demand for raw materials of fabrics is in cotton, it has not been the conventional go-to nation for export of all fabrics (Townsend and Sette, 2016). For instance, Australia is preferred for the export of wool. Secondly, the Indian supply for synthetic fabric is insufficient with partial reliance on China for imports (Townsend and Sette, 2016).
Bose (1989) described the inverse relationship between industrial goods and food grains and gave particular attention to textiles and clothing in particular. He saw a three sector set-up: the industrial sector, the manufacturing sector of clothing and the agriculture sector. Stunted agricultural growth has resulted in several hindrances in the industrial development which directly affect Indian economic policy. Jha (2010) talks about the coordination between the two sectors yet states that the industry fares better than the agriculture. This essay discusses the disproportionality resulted by the incongruent rates of industrial and agricultural growth. The clothing industry is an essential facet of India’s most significant economic sectors, yet there are several constraints for all the stakeholders, from the level of textile economic hierarchy from the farmers to the policymakers and exporters (Mohan Kathuria, 2013).
7.0 Issues related to luxury clothing in India
There are a number of issues highlighted by several authors, however there is no empirical evidence on these issues. According to Tewari (2016), the key concern is the increasing handlooms and their acceptance in the market. Due to the lack of legal stability and enforcements, these handlooms as well as local producers often forge the luxury clothing in India. According to Banerjee (2008), the limited number of malls and the tedious regulations in India are concerns for the luxury clothing industry. One of the most discouraging factors for the customers is the high import taxes and the forged market that contributes a significant 10 to 15% of the entire luxury clothing consumer market.
7.1. Branding and luxury clothes in India
The most common wristwatch brands include Longenis, Dior, Rolex, Victornix and Omega (Joshi, 2014). For bags and accessories the dominant brands are Gucci, Louis Vitton and Prada (Joshi, 2014). Michael Kors is dominant in the footwear luxury market as are Calvin Klein, La Prairie and Bulgari in clothing, cosmetics and perfumes taken collectively (Joshi, 2014). The dominance of the above stated brands in wristwatches, bags and accessories could offer them an advantage to enter the luxury clothing market. However, there is further research needed in determining the causes of the market share distributions between various brands as rooted in the preferences of Indian luxury consumers. Moreover, brands like Zara and Tommy Hilfiger similarly serve a base in India for middle of the range luxury clothing at lower-price points than the more premium clothing and are seen as serving a growing market for which they are best suited (Joshi, 2014).
Brands in India may have an underexplored opportunity relating to ethical products. While this market has been primarily associated with consumers from developed nations, there is evidence to suggest (Phau et al, 2015) that ethical considerations may be an important driver in the choice of product purchases even in emerging markets. Phau et al. (2015) show that there is a considerable aversion towards sweatshop-made luxury clothing products in emerging countries like China, where consumers are aware of the ethical implications. A similar study of the Indian market is warranted, with a focus on the ethical implications of agricultural clothing. This would provide a significant opportunity for brand exclusivity (Spiggle et al, 2012; Phau et al, 2015).
7.2. Country-of-origin and luxury clothes in India
Godey (2012) finds that the Indian luxury market considers COO to be of less importance as a criterion for purchase of luxury goods as do other countries such as Italy and China. While this is likely to be the case across the spectrum of luxury goods, whether COO would influence luxury clothing purchases specifically, in this market, is an open area of research. However, COO is nevertheless an important criterion that influences the sale of luxury goods in the Indian market. Past studies in the field have primarily been focused on emerging markets as opposed to the specific Indian market. These studies imply that the influence of COO either plays no role (Huddleston et al, 2001) or is product-dependent (Hamin, 2006). Shultz and Jain (2015) confirm the findings of Nueno and Quelch (1998) when applied to this market, in that Indian luxury consumers are found to be seeking quality and use the COO in making this determination. These influences of COO occur primarily in the “exploration, comparison, and evaluation” stages of the purchase process (Shultz and Jain, 2015).
Where Verlegh and Steenkamp (1999) assert that COO develops and influences purchase intentions, Shultz and Jain (2015) find that COO only affects the consumers’ perception and does not influence the actual purchase of luxury brands in India. Earlier studies also find that consumers compare products of one country with others to make a purchase decision (Koschate-Fischer et al, 2012). In India however, the following three factors were found to be of greater significance than any COO considerations: 1) aesthetics, 2) elegance and 3) reflection of self-portrayal (Shultz and Jain, 2015). Jain et al. (2012) propose that evaluations of luxury brands in the Indian market are based on the following internal perception related factors: 1) stimuli 2) quality 3) self-indulgence and 4) hedonism. These eventually correlate to aspects that may be attributed uniquely to the brand in question, but also the product itself. Given that the emergence of the luxury brand demographic coincides with the online shopping revolution in this market, Shultz and Jain (2015) suggest a preference in India for online brands. This is however under-investigated in the literature on the subject.
According to Walley et al. (2014) the country of origin plays a huge role in determining the concept of luxury in some regions. For some people that belong to under developed regions, products produced in highly developed regions and sold in the local markets can be considered as luxury for the local population. Country of origin plays a huge role in determining the pricing and developing the perception for the brand. Walley and Li (2015) noted the effect of country of origin in determining the purchase decision for food of the Chinese customers. When a product was made from China, buyers restricted their use and switched to the food products that were foreign-made. Similarly, some customers may perceive product made in Pakistan, China or India as non-luxury while the same customers may perceive products from UK as a luxury brand.
7.3. Social class and luxury clothes in India
A common trend in emerging markets is the influence of collectivist and social status elements of brand appeals in how they apply to specific markets. A number of studies (Babin, Darden et al, 1994; Veblen, 1918) link conspicuous consumption and collectivism to the need for social status in India as influencing luxury purchases. However, the general implications of the collectivist aspect of Indian cultures are in stark contrast with the findings of these studies. Collectivist countries emphasise modesty over individualism and pride (Hofstede, 1991). There is also a greater power distance in this culture (Hofstede, 1991).Therefore, it may be hypothesised that this is the result of either a niche market acting against the collective preferences of the greater group. However, further research is needed to determine the true causes of this contrast. Such collectivist cultures also score high on Hofstede’s power distance scores (De Mooij and Hofstede, 2011), which may explain India’s luxury market deriving from social status needs. Another possible explanation is that luxury may be a way for members of a more privileged class of society to demonstrate belonging to this group rather than demonstrating power distance between themselves and less privileged sections of society. This is an important nuance in considering social status influence on luxury consumption.
More significantly, “other-directed symbolism” is a greater influencer than conspicuous consumption element of luxury purchases in India. India’s own consumption considerations differ from other collectivist countries like China and Indonesia (Jain et al, 2017, Triandis, 1989). However, Shukla (2012) makes the assertion that hedonism and materialism are significantly lower than in developed countries as a motivator for luxury consumption. This has been attributed to strong in-group interdependence in India as a collectivist nation. Previous studies on collectivist societies find modesty to be a key attribute serving as counter-feature to luxury consumption (Douglas and Isherwood, 1996). While conspicuous consumption (Bruce & Kratz, 2007) and social value and status of luxury are studied previously in Asian markets in general and Indian markets in particular (Wiedmann et 2007), a more detailed profile segmenting the market based on different tiers of luxury consumption may lead to greater insights useful for luxury brands looking to expand here.
7.4. Counterfeit products and luxury clothes in India
The influence of the counterfeit versions of luxury clothing products in the Indian market is another issue of concern. There is a booming market for “good knock-offs” in the emerging market (Han et al, 2010) where such practices are not policed to the same extent as in other areas of the world. How this affects the future of genuine luxury clothing products remains to be researched. Wilcox et al. (2009) find that the skill level of counterfeit product manufacture and distribution is far greater in Asia than in the rest of the world. Kim and Karpova (2010) and this paper both confirm these conclusions on counterfeit goods market perceptions. However, the obvious contributor to the counterfeit market is a weaker policing of illegally branded products and this is not addressed sufficiently in current literature as the factor that contributes the most to the counterfeit luxury markets. Thus, it may be hypothesised that cultural differences in perception of such products are a second-order effect of the effectiveness of the enforcement of law.
7.5 Celebrity endorsement and luxury clothes in India
Successful marketing for large brands often requires the endorsement of celebrities. It is difficult to identify the effect of the endorsement aspect of luxury clothing in India, as there are relatively few instances of popular celebrity endorsements for high-end items. Popular celebrities including Shah Rukh Khan, Amitabh Bachchan and Sachin Tendulkar have a history of endorsing low-end high-popularity products, the likes of which do not include luxury items. The notable exception is Aishwarya Rai endorsing Longines watches and Nakshatra diamonds (Jain, 2011).
Marketing aspects of brand promotion are a key consideration. Over-endorsement of a celebrity and its influence on a luxury market has been addressed in Hung et al (2011). This is an issue that concerns India in particular, with a relatively small number of celebrities constituting nearly all major endorsements. This dilutes the connection of the celebrity to the luxury brand in connection (Hung et al, 2011). Moreover, endorsement is often across the spectrum of luxury and non-luxury brands, further diluting the endorsement effect. Hung et al (2011) suggest two main sources of the endorsement effect in: 1) entertainment connection and 2) intense attachment. To what extent each of these influence celebrity endorsement in the Indian luxury market is unknown, and is an area of further research.
7.6 Low-end luxury and luxury clothes in India
An emerging market within the newly developing luxury market is the low-end luxury clothing segment. H&M, Tommy Hilfiger Gap and Zara are the three most prominent brands serving this market. Moreover, there have been a number of collaborations between brands in this sector and established local Indian entities (Kearney, 2011). These include: 1) Tata Group and Zara, 2) Tata Group and Topshop, 3) Future Group and Lee Cooper Ltd., 4) Reliance and Diesel and 5) Arvind Lifestyle and GAP (Kearney, 2011). Price point is an important consideration for a relatively small but growing sector in this market. The price points however, are roughly equivalent to their European store equivalents when converted from INR to Euro. For instance, blazers in Zara are priced in the 4000-6000 INR range which is equivalent to 48-72 GBP, which is marginally higher than the price range in UK stores for similar products (Srivastava et al, 2014). This may be attributed to limited competition in this sector. The literature on the pricing considerations in new markets of low-end luxury products are an area of research that can offer valuable insights for the future of this sector.
An analysis of the competitive dynamics of these middle-of-the-range brands (Srivastava et al, 2014) finds that the key advantage in Zara’s expansion was its concept definition to market release time in India at 14 days, while times for competitors H&M and Gap are estimated at 21 days and several months to reach stores (Srivastava et al, 2014). H&M announced in 2013, that it was to invest over 100 million USD into its Indian operations, constituted not only to supply for its global demand, but also to its store operations (Mitra, 2015). GAP has expanded its online sales in India as a key part of its strategy, in the face of significant competition from Zara and H&M on the physical-store front (Rediff, 2017). Thus, given the limited number of stores locations and a rapidly growing market, monopoly and early capture of the market are key considerations for these brands.
7.7. Distribution outlets and luxury clothes in India
Distribution outlets are concentrated in major cities like Delhi, Mumbai, Chennai and Bangalore (Pradhan, 2011). However, there is a significant level of demand in other areas of the country currently under-addressed (Khanna 2011). How this is likely to change over the course of the coming decade is an area of further research. Moreover, the role of the Indian luxury store in creating customer loyalty is an area that requires further investigation. Relationship marketing is a key consideration for the longevity of a luxury brand (Kim and Kim, 2014). The loyalty of a customer to a store brand is also dependent on the customer-salesperson relationship (Kim and Kim, 2014). Therefore, given that customers in India are required to travel in order to experience luxury stores is indicative of a largely untapped opportunity for a mass-market that is scattered across the country (Khanna 2011). Research suggests that pop up stores are effective with new emerging markets (Picot-Coupey, 2014). However, flagship stores are said to “represent a strategic approach to market entry that is employed to support, enhance and develop distribution activities within a foreign market” (Moore et al, 2010). Which strategy is optimal for an emerging market is a research gap particularly in the context of India.
Given that 38% of global luxury consumers prefer to purchase online (Atwal and Williams, 2009), this distribution channel is promising for India, and crucial to address brand longevity. Online luxury is a significant challenge for brands entering India. Research suggests that brand differentiation is lost in online shopping for new entrants in the market (Kapferer, 2014). Brand differentiation is crucial to the luxury sector. However, at the same time, there is a growing luxury market in India taking to online shopping with millennials at its core. As of June 2017, search results for Indian luxury online yield a number of portals or aggregator websites that are not owned or managed by the major luxury brands. These include Darveys, Luxepolis and Luxury Station. This is telling of the online presence of major brands. As stated previously GAP has made a move into the online luxury sales after being beaten by the likes of Zara and Tommy Hilfiger in brick and mortar retail (Rediff, 2017).
7.8. Manufacturing of luxury clothing in India
India is dedicated to become the chief manufacturing hub in the world and thus it has introduced a number of reforms and according to Handa and Khare (2013) by 2020, it will be nominated among the top four manufacturing sites. Previously, India focused merely on the growth of service manufacturing and as a result, the manufacturing of retail products declined in the country. The recent reforms and the campaign ‘Make in India’ have significantly supported not only the local manufacturing industry but also the international manufacturers that now visit India for manufacturing luxury retail brands at lower costs (Bakewell et al, 2006). According to an article by Tewari (2016), the frequent supply of power and other resources in the Uttar Pradesh, its sites and links with the outskirts of New Delhi have made it the top location for the production of luxury brands such as Zara and Mango. According to Khare (2014) reforms have been introduced in Mumbai, Bangalore and Chandigarh in order to improve the supply of utilities and materials, engineering, railroads and infrastructure as a whole. Furthermore, according to Tsai (2005) the labour force in India is approximately 500 million people with an estimated 12 million entering the market each year. This includes the unskilled labour as well as high tech and advanced labour. The luxury manufacturers find India attractive due to cheap labour costs. According to Bothra (2013) India also has an attractive and competitive market with great potential to purchase luxury brands. Shrivastava (2017) highlighted that over the years, the government of India has paid significant attention in improving the situation. Reforms were introduced in the intellectual property rights in order to avoid forging and promote luxury retail. On the other hand, the country has also experienced a record low inflation in the recent years and as a result the raw materials and other goods needed by the manufacturers have also become cheaper. Thus, manufacturers have an opportunity to reduce their costs with even cheaper material and labour.
According to Vitanova (2016) the Indian law for the commercial industry manufacturing is identical to the British law that is also highly similar to the US law. Thus, international brands find it very easy to adapt to the legal system of India and adhering to it while manufacturing their products. Furthermore, apart from the legal system, international equipment, including Japanese tools and equipment, are also available in India that results in high quality output after manufacturing (Handa and Khare, 2013). It is expected that in the coming years, the opportunities will grow for the luxury retailers and manufacturers, as India began to achieve its goal of becoming world’s number one place for production and manufacturing. However, limited studies are available in this regard thus creating a gap in the existing literature.
Retailers who don’t own factories do not produce their clothes but instead subcontract other firms from partially industrialized countries. They are therefore the key drivers of the clothing industry. Tewari (2006) perceives the outstanding designs as a comparative advantage for the Indian clothing industry. Khare (2014) observed the relationship between consumers’ susceptibility and cosmopolitanism. He further investigated the interpersonal impact on Indian customers’ involvement in fashion clothing. It was found that the significant value factors of normative impact, utilitarian and cosmopolitanism affect the Indian consumers’ involvement in fashion clothing. Purchasing power, the area of residence and education also had moderate effects. One of the significant limitations of this study was that there were age biases.
One qualitative study scrutinized the luxury brand industry reflecting the consumer perceptions and the need to buy luxury branded items. The findings exposed that the psychological and social factors in Indian society majorly affect luxury consumption. Luxury endorses conspicuous consumption and prominent status visibility, conveying social distinctiveness and more prominent status in Indian culture (Eng and Bogaert, 2010).
7.9. Agriculture and the production of raw materials for luxury clothing in India
There are also drawbacks with Indian agriculture as the supply end component of the supply chain for entrants in its luxury clothing market. In particular, it is significantly more inefficient than that of other supply chains in developed countries. The wastage in the agriculture sector is high and was estimated at 9.8% of its GDP contribution in 2014. Moreover, government influence on pricing has hindered organic efforts present in a free market to improve the overall system. The technology for both production and transportation is for the most part outdated in developed countries. Moreover the supply chain infrastructure for the local clothing industry is highly inefficient, requiring unnecessary additions to cost.
However, there are a number of recent developments that indicate an eminent improvement in the agriculture and textile elements of the nation’s supply chain faculty. These primarily include government efforts to boost the agriculture sector for this fiscal year. The budget for the agricultural sector in 2017-18 has been increased by over 23% compared to the previous period to a total INR equivalent of 28 billion USD (India Brand Equity Foundation, 2017). The National Bank for Agriculture and Rural Development (NABARD) has set up a fund of 750 million USD recently. Loans as high as the equivalent of 4,500 USD at reduced rates of 7% annually are now available to farmers (India Brand Equity Foundation, 2017). As an effort towards effectiveness, farmers are offered an extra 3% reduction upon timely loan repayment, thus lowering the rate down to a minimal 4% (India Brand Equity Foundation, 2017). There is an upcoming initiative by the Ministry of Labour and Employment to increase the minimum salary of farmers in underdeveloped regions of the country to 5.2 USD per day, more than double its current value of 2.4 USD. Lastly, a number of skill-improvement initiatives are to be put in place over the coming years, the most notable in the current fiscal year being that of the “Krishi Vigyan Kendra” being put in place in each district in the country for the purpose of technical assistance to farmers (India Brand Equity Foundation, 2017).
Mehta (2005) observes that due to higher domestic needs, the local market sales margins are comparatively higher in comparison to exports. The country is engrossed in producing different types of clothing raw materials. Depending on the manufacturing specialty of each area, every region differs in cloth production. Some parts of India are suitable cotton manufacturers whereas some are good at producing linen. The production units are increasing all over the country, yet consumer preferences have to be also considered. India is building cotton at a very high rate in comparison to rest of the world with 2.7 million tons on an annual basis. India also produces silk and is the second most significant contributor. Along with that, it is the largest producer of jute and even different brands of linen. On the manufacturing front, it produces one of the largest quantities of denim (Narayanswamy, 2005). Because of the prominent manufacture of raw materials, the extensive labour supply and skilled the workforce, the Indian textiles industry gains momentum and grows in the global market (Padhi, Pauwels and Taylor, 2004).
8.0 The supply chain of clothing in India
The demand for luxury clothing is increasing, and brand recognition is continuously on the rise. The luxury clothing market is proliferating in India because of fast GDP growth, increase in the young working population, wealth regeneration, per capita consumption increase and economic deregulation. Wealthy Indians are incredibly interested in branded items, giving rise to increased potential luxury brands. Bothra (2013) stressed on the ingredients of a luxury brand and factors affecting their manufacturing. The article discusses several luxury brands in India and assesses the behaviour of elite consumers. He recognizes that the luxury market is going to achieve its boom but fails to report the shortcomings (Bothra, 2013).
Smith and Agrawal (2000) observed that retail specialists supplying only a few products or minimal clothing categories need to manage fewer supply channels that do not require extensive coordinative skills. Lancioni, Smith, and Oliva (2000) highlighted the importance of e-commerce in the supply chain management. They supported the idea of e-commerce by pointing out that it saves time, there is greater accuracy in specifications, tenders and orders are easily managed, progress chasing is visibly highlighted and there is direct payment into supply chains and fast deliveries. Lancioni, Smith, and Oliva (2005) further studied the influence of inertia on the firm’s supply chain operation management and that it can affect the company’s ability to produce-to-stock in order to be prepared for external marketing pressures.
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