The history of emancipation in India is long and the women’s movement received a special boost with India’s independence in 1947 when the constitution adopted gender equality (Forbes, 2008). By comparison: the Swiss federal law on gender equality took effect on 1 July 1996.
With 1.3 billion people, India is the world’s biggest democracy and it continues to grow at an annual rate of seven to 9% (statista.com). Of particular note is that a well-educated, young, mobile and growing middle class exists (Jodhka and Prakash, 2011). The good education system, which is mainly responsible for the growth of India’s middle class, originates from the British education system introduced at the beginning of colonisation (Forbes, 2008). Many of the young, well-educated people work in the service sector and live in large cities like Mumbai or Delhi (auswaertiges-amt.de). As the infrastructure in rural areas is still not well developed, the biggest changes in the economy and society take place in India’s major cities (Ablett et al., 2007). Many start-ups arise in the cities, especially in the field of catering and daily food delivery. Women, especially housewives, participate here, as they cook from home and the food is delivered to the large office centres in the city (Rappel, 2016). Although less than half of India’s population live in the cities, it is responsible for 2/3 of growth (Ablett et al., 2007). India is listed among the top 30 most attractive developing countries for trade investment (Ben-Shabat et al., 2014).
At a Dell conference “Women’s Entrepreneur Network (DWEN)”, staged 2012 in New Delhi and directed to female entrepreneurs throughout the world, the host country was shown to be on its way from a developing country into a stable and powerful economic power (Rufer and Schubert, 2011). According to a study from PriceWaterhouseCoopers, India has the potential to overtake the USA economically and to become the world’s second biggest economy in terms of purchasing power by 2050 (Merchant, 2011).
McKinsey (2007) predicts income growth of up to 6% to 500,000 rupees in the cities by 2025 – from around 1000 Swiss francs today – and a rise in the number of households with an available income of over 1,000,000 rupees to 9.5 million, also by 2025. Here it has to be made clear that 500,000 rupees equates to a value of around 7000 Swiss francs. Despite the rapid growth in the number of wealthy people, a very large number of poor people remain and social inequality has continued to grow in absolute and relative numbers (Ablett et al., 2007).
It is notable that despite economic growth, the opening of markets and the rise of a young, cosmopolitan middle class, traditions are valued, nurtured and lived out (Rappel, 2016). This is also reflected in the luxury goods market, in which particularly Indian jewellery firm are successful. The wish to get to know and experience the Western world can be shown on the basis of the ice cream market: There is interest in well known, globally active brands, such as Häagen Dasz and Mövenpick. Especially new flavours, which meet the taste of the Indian population, can be sold successfully (Rappel, 2016).
Despite the cultural challenges, European luxury brands, such as Louis Vuitton, Chanel, Dior or Burberry, to name but a few, are present in India. Especially in the cities of Mumbai and Delhi with their numerous financially strong politicians and entrepreneurs, there is the right clientele for these luxury goods brands. (Pradhan, 2011)
Luxury goods are superior goods, so if incomes rise so too does the demand for them. If the Indian economy grows and with it the per capita income, the market for luxury goods will follow suit (Pradhan, 2011). The graph below illustrates the rise of the luxury goods market in the period 2009 to 2015. Assets, i.e. property and cars, have shown a strong rise from 2.45 billion US dollars to 7.9 billion US dollars within this 6-year period. But the segment ‘products’, i.e. jewellery, watches, wine and clothing, is not to be neglected with a rise of 3.85 billion US dollars. Overall annual growth of 21% is shown here. By comparison: The luxury market in America grew by just 4% in 2013 (Kunstmann-Seik, 2013). However, the luxury market in India is still very much centred on the large cities like Delhi or Mumbai and the absolute level of luxury goods consumption is on a low level. Based on the high growth forecasts for the Indian economy and the government’s high investment in the infrastructure, such as the expansion of roads and rail transport, there is a high buying potential and the Indian market for luxury goods appears promising (Enskog, 2016).
The women’s emancipation movement in India looks back over a long history. Even before independence, the secularized British education system was introduced in India and women were also intended to go to school. But because women were dependent on men throughout their lives (firstly their father, later their husband) and the education of women was associated with a negative impact on the life of their men, this opportunity was only accepted by a very few.
Hinduism forbids women from higher castes from coming into contact with women from lower castes, which was not considered by the British in the education system. For this reason, girls from higher castes were taught at home, if at all, and were prepared for their duty as wives. Women of lower castes went to school more often, although the number of females completing school was very low. Upon gaining independence in 1947, women and men were granted equality in the Indian constitution. Henceforth, the government resolved to work together with women’s organisations and to develop plans for how women could participate in the education system. Childminding centres were also set up and educational campaigns started. Especially the abortion of female foetuses and widow burning, which were widespread, especially in the countryside, but were also performed in the cities, also led to demonstrations from women’s organisations and resulted in laws, such as the ban on abortions and stricter prosecution of rape and widow burning. (Forbes, 2008)
The intensified protection of women by laws and the increasing protest among women against discrimination by men led to strengthening of position of women in India, both in the domestic, as well as in the business setting. The Economist magazine recently wrote a report on the first female taxi driver in Bangalore, which can be viewed as an indication of the increased safety of women and greater participation in everyday working life (The Economist, 2016). Further indications for an improvement in the position of women and their importance as a potential customer segment for luxury goods is that women make up for 14% of senior management positions of large Indian companies (Rappel, 2016). Another indication that women in India are becoming an ever more important customer segment for the luxury goods sector is the strongly growing market for decorative cosmetics: The German Trade and Invest organisation (GTAI) writes on this: ‘The field of decorative cosmetics is one of the most significant segments and attained a sales volume of around US$ 197 mil in 2013. Experts anticipate annual growth of 15 to 20%. Lakme, Revlon and L’Oreal are the biggest companies in this segment.’ (Knipp, 2015).
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Women make up for 14% of senior management positions of large Indian companies.
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A third indicator for the increasingly important role of women as consumers of luxury goods is the circulation of the magazine Vogue India, which can be bought in India since 2007 and has since attained a circulation of 52,000. ‘It is aimed towards female consumers who expect the best from western and Indian fashion’ (Brook, 2007). It is remarkable that most of the topics covered relate to the country of India itself or persons or companies from India. For instance, much is described about weddings and wedding fashion, which is one of the most important topics for many Indian women. The cover models are usually of Indian origin too. But the many pages of advertising are also filled with Western brands, such as Louis Vuitton, Chanel or Rolex (Vogue India.com).
The content and the growing circulation of this magazine, which solely for reason of its price of over one dollar (100 rupees) – in comparison, another Indian fashion magazine costs 60 rupees per edition – is directed to wealthy women, shows clearly that evermore women are participating and consuming on the luxury goods market.
In summary, it is therefore fair to say that women are becoming an increasingly important consumer group for luxury goods. This customer segment is still very small and also centred on India’s large cities. And despite the very long women’s movement, women in India are often still today viewed as inferior. But emancipation is progressing inexorably. An example of this is the ‘Empowerment’ campaign from Vogue India that is engaged against the oppression of women in India and asks the question what it means to be a woman in India (Vogue India.com).
These movements, the investments in infrastructure, such that the rural regions can be more integrated and the economic upturn in which women can also participate as entrepreneurs and (well positioned) employees, will inevitably lead to women having increasing influence in India in the future and becoming a more important customer segment.
Women in India are currently a small, yet rapidly growing customer segment. Also, a customer segment with special requirements. On the one hand, preservation of Indian tradition and curiosity for western luxury goods. My recommendation for action is to make western luxury a tangible experience for Indian women, and to integrate traditional values and traditions in one’s marketing campaigns, i.e. to reconcile with the western understanding of luxury and beauty. The content in the Indian Vogue may be interpreted here as a positive example, as in the fashion campaigns ‘Jimmy Choo’ western brand shoes are combined with the sari, for instance. Or a topic of such importance in India, such as the wedding celebration, is taken up by various campaigns and reports, and is combined with western decoration and clothing tips. The layout of the magazine also differs from that in Western European countries – it is more shrill and colourful. On account of the deeply rooted culture, religion and tradition in India, it is imperative to be receptive to the Indian understanding of beauty, luxury and their values, to take it on in one’s own campaigns and to integrate it in one’s own brand history so that customers can identify with the brand and become fans.
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Women in India are currently a small, yet rapidly growing customer segment.
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The price policy is also crucial: Although the middle class is growing, it nevertheless has to be borne in mind that the available income is a long way off reaching the level of the western world and luxury brands are still unaffordable for many. Luxury brands therefore have to develop a price strategy for India to maintain profitability and still to appeal to a viable customer segment.
Author
Elena Wirth
Bibliography
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