As India’s seemingly unstoppable ascent in the global economic market continues, luxury goods manufacturers target its burgeoning middle classes.
After televisions and cars, luxury watches are now available on zero per cent finance now in India.
Tag Heuer, a premium Swiss watch brand has launched a new scheme that offers its customers interest free loans for purchasing watches.
And Tag Heuer’s parent, LVMH plans to spread this scheme to its other luxury brands like Fendi, Christian Dior and Louis Vuitton.
So now you can get a Tag for the price of a Titan with an EMI of less then Rs3,000 (USUS$65). Financing is provided by Citibank and is available to any credit card holder.
According to Ravi Thakran, regional Managing director of LVMH watches and luxury: "The scheme provides for hassle free finance and the ownership remains with the buyer only.”
LVMH is aiming to appeal to 20-something style seeker professional with limited disposable income with the idea of owning a super premium brand.
The global market for luxury goods is estimated at US$60-80bn.
The US accounts for 30 per cent of it, Europe 34 per cent and Asia 36 per cent. The purchases made abroad by Asian tourists — some Indians included — means Asia actually accounts for 60 per cent of the luxury goods business.
One of the issues that luxury labels are trying to grapple with is selling to the customers outside the super-rich bracket.
This is a question that’s pertinent for India because of its large middle class and the opportunity it represents.
It is called aspirational buying, where people try and create pockets of wealth in their lives.
Luxury watches have always had great aspirational value, especially with celebrity promotion.
Tag Heuer has sport stars like Tiger woods and Kimi Raikonen promoting the brand and has signed up Bollywood heart throbs Shahrukh Khan and Bipasha Basu and the greatest pace bowler India has produced, Kapil Dev, in India.
However, with prices ranging between Rs30,000 to Rs80,000 (US$650 to US$1,750), sales have been slow to pick up
However, now the luxury watch market in India is around Rs200 crore (US$44m) and is slated to grow at over 25 per cent for few years.
Big brands like Tag Heuer, Omega, Rado, Patek Phillipe and Frank Muller have recently made major inroads in to the market.
Tag heuer alone has a marketing budget of Rs 50 crore (US$11m) for 2004 and is all set to launch new print and electronic campaigns.
"The market might be limited, but it has a huge potential," says Mr Thakran.
After watches, this could spread to jewelry, bags and even that couture dress you fancied.
With easy finance of luxury goods we might see a new revolution in India for "Luxe Populi" – luxury for the people.