Branded luxury is not new to Elite India…There was a time in the 1920’s, when 20% of Rolls Royce’s global sales were from Elite India. In 1926, the Maharaja of Patiala gave Cartier its largest commission till date the re-modelling of his crown jewels, which included the 234.69 carat De Beers diamond. The result was the Patiala necklace weighing 962.25 carats with 2930 diamonds.
In 1928, the Maharaja of Jammu and Kashmir placed 30 orders in six months for trunks from luggage maker Louis Vuitton. Not to mention that a certain Nizam had procured 50 Harley Davidsons for his postmen to deliver his messages.
The term Elite India is to capture the Aristocrats and the Blue Bloods. Luxury was contained exclusively within this elite coterie for generations.
The democratisation process started happening in the West first, where wealthy businessmen got the taste of luxury and the rest is history. Luxury was no longer only for the select few, it was for anyone and everyone who can afford, irrespective of the colour of their blood.
In India, in the past decade we saw a rapid rise of the new Maharajas. Industrialists, entrepreneurs, professionals, and the rural rich started blatantly adoring all things luxurious.
Today, even the luxury of Royalty is available for a price. How does it matter if you are not born in a Jaipur palace, today Royal Weddings have become commonplace. Perhaps the opening up of palaces for hotels is the biggest step towards democratisation of exclusivity of royalty. You will be treated like a king, if you have the moolah. Life is just that simple.
Now let us look at the rise of the so-called masses. These new customers — luxury-rich but asset — poor are both an opportunity and a threat to the traditional luxury-goods producers.
As consumers, they are more demanding, more selective, and show less brand loyalty than the high net worth individuals who were the archetypal consumers of the old luxury. They are willing to pay high prices, but they expect commensurate quality; old luxury was never so fussed.
And they want the hottest, trendiest designs, which increasingly have to be marketed in creative (and expensive) ways including product placements on TV sitcoms.
Economist claims that this democratisation of luxury is eating into the profits of the luxury-goods manufacturers. To maintain quality and to withstand the tightening of their margins that it implies, they must have the capacity and resources to change designs frequently and to get new products into the shops rapidly. That means money, discipline and clout. Design and creativity are the bedrock of any luxury brand. But the access to financial resources and thorough execution that are part of any professional management really come into their own when times are tough. The vulnerability of small trophy companies becomes more obvious during a downturn.
Lets now consider the more interesting segment of the masses. To explain this first let me introduce a term: masstige. The word is a portmanteau of the words mass and prestige and has been described as “prestige for the masses.”The term was popularized by Michael Silverstein and Neil Fiske in their book Trading Up and Harvard Business Review article “Luxury for the Masses.” Masstige products are defined as “premium but attainable,” and there are two key tenets: (1) They are considered luxury or premium products and 2. They have price points that fill the gap between mid-market and super premium.
Lets take the example of Speedy 30. In Korea, Louis Vuitton’s Speedy 30 handbag has been nicknamed the 3 second bag because it feels like you see one every 3 seconds. Its just one of many entry level products that have been developed to deliver value for money on a smaller, yet perhaps equally indulgent, taste of the brand narrative. So, this is a segment that aims at the entry level products of the luxury brands. The targets: accessories, belts, scarfs, wallets, small purses, and so on. They just need to flaunt the label.
Luxury brands extend downwards with these low-hanging seemingly affordable fruits to capture the masses and to whet their appetite.
So, from the Maharaja to the Praja, both now flaunt the same labels. That’s democratisation of luxury. Yes, it has taken decades, but we have made it..