Luxury market to reach $15 bn by 2015 in India, marketers try new ways to woo buyers in non-metros

New Delhi: If you were to name the country's most fashionable cities, Indore is unlikely to make the list. But luxury handbag brand Judith Leiber, which sells just about 300 of its pricey bags in the whole of India in a year, recently sold 30 pieces priced anywhere from 25,000 to over 3 lakh in this central Indian city through a special sale event held in partnership with an existing client.

"It was a unique experience for the people of Indore, which worked well for the brand," says HarshvardhanBhatia, founder of HI Diamonds, who partnered the trunk show. Buoyed, the American brand will return to the city next month with a similar event with the same partner.

Judith Leiber is part of a growing club of luxury goods and service providers that finds innovative ways to reach small towns and cities where there is no luxury infrastructure but people have as much money and taste for luxury as those in the metros.

If Judith Leiber uses local influence groups to cosy up to buyers in the hinterland, BMW dealer Bird Automotive interacts with school and college students to popularise the German luxury car brand in cities such as Agra, Meerut, Karnal and Faridabad, where demand for luxury cars is on the rise. "We organise brand connect programmes for students with an aim to motivate them to become a customer at a later stage. It is a long-term approach," says Gaurav Bhatia, director at Bird Automotive.

Bird Automotive sells BMW luxury cars in Delhi and the NCR region. "Educating the consumer is the key to success in these (hinterland) markets," he says, adding that his firm sells up to 70 cars in a year in smaller cities around the Capital. India's luxury market is expected to reach $14.73 billion by 2015 from an estimated $8.21 billion this year, with about 30% of the customers coming from smaller cities.

According to a recent survey by YES Bank, new pockets of regional growth have led to a rise in the number of first-time luxury consumers from smaller cities and towns. This made 36% of the 300 responding CEOs of luxury brands see themselves increasingly using social media platforms as a brand connect and 38% saying they were trying to reach out to these markets through e-commerce.

So the potential is big. And so is the challenge of wooing these new luxury lovers.

Abraham Koshy, professor of marketing at IIM-Ahmedabad, says small-town consumers need to be treated differently. "There is no point explaining what it means to buy a Louis Vuitton bag to a well-heeled shopper in Delhi or Mumbai. But in smaller locations, it is important to stimulate demand by informing a consumer about the badge value of an expensive brand and how it adds to the image," he says. To communicate well, brands need to talk consumers' language.

Rajeev Wadhwa, chairman of Mumbai-based luxury charter services provider Baron Aviation, says that recently a client had called in at two in the night with a demand to fly out to London in a private charter the next morning. "We knew it was not possible and it took one hour for the relationship manager to finally make him understand how numerous permissions were required to be taken," he says.