At the end of 19th century India’s maharajas, India’s maharajahs discovered a Parisian designer named Louis Vuitton at the end of the nineteenth century and filled his small factory with requests for custom-made Rolls-Royce interiors, leather picnic hampers, and fashionable polo-club bags. The orders dried up as India’s princes lost much of their riches after independence. The world’s greatest luxury goods business, LVMH, then returned triumphantly to India in 2002, launching a boutique in Delhi and another in Mumbai in 2004. Its objective was a new breed of maharajah born as a result of India’s liberalisation: flush, flashy, and expanding in number.
From Chanel to Bulgari, more opulent brands followed. Dolce & Gabbana, Hermès, Jimmy Choo, and Gucci are among the upscale labels that have announced plans to open stores in India in recent months. And Indian ladies will soon be able to spend more than $100 on La Perla bras, an Italian lingerie company. Of course, only a small percentage will do so. The luxury behemoths, on the other hand, are enthused about India’s future prospects.
According to American Express, a financial services company, India’s one billion-plus population has fewer than 100,000 dollar millionaires. This number is expected to rise at a rate of 12.8 percent each year over the next three years, according to the report. Meanwhile, the McKinsey Global Institute projects that by 2025, average earnings will have tripled, pulling nearly 300 million Indians out of poverty and causing the middle class to rise more than tenfold, to 583 million.
In a nutshell, consumer demand for all kinds of goods is likely to skyrocket. While prohibitions on foreign investment prevent retail behemoths like Wal-Mart and Tesco from entering India directly, companies that sell their own products under a single brand, such as luxury goods companies, are subject to different rules. They have been authorised to own up to 51 percent in Indian joint ventures from January 2006. India is also a desirable market for luxury products since it lacks a thriving counterfeit economy, unlike China. Credit is becoming easier to come by. Vogue, a fashion magazine, will also publish an Indian edition later this year.
However, there are still barriers to expansion. Luxury items are pricey due to high import tariffs. Rich Indians are known to travel extensively and may purchase goods elsewhere. Finding sufficient store space is proving to be a challenge as well. Until now, the majority of designer boutiques have been located in five-star hotels.
Things, though, are changing. Emporio, a new luxury goods mall, will open later this year in an affluent district in Delhi’s south. It’ll almost certainly be the first of many. Nonetheless, India may prove to be a difficult market to penetrate. The Luxury Marketing Council, an international network of 675 luxury products companies, launched its India chapter in October. Devyani Raman, the company’s CEO, compared India’s luxury goods sector to “a cabinet full of lovely clothes with a new outfit arriving every day—it may start to look disorderly if not well cared for.” This, she claimed, includes everything from training store employees correct etiquette to imparting a proper notion of luxury in the Indian population. “How do you teach children the difference between a $400 designer bag and a far less expensive leather bag that works very well?” she wondered.
Who are the ‘new breed of Maharajas’ ?
Option 1 : Maharajas who recovered their wealth in 2004.
Option 2 : The children of the older Maharajas.
Option 3 : The new class of rich people which emerged in India post liberalisation.
Option 4 : None of these
- What is the author most likely to agree to as the reason for the inflow of luxury good groups in India?
Option 1 : The fast growth in Indian economy leading to bright future prospects.
Option 2 : To serve ‘the new breed of maharajas’.
Option 3 : To serve the tiny fraction of high income groups in India. Option 4 : None of these
- Why do different rules apply to Wal-Mart and luxury good firms?
Option 1 : India is encouraging luxury goods while it doesn’t encourage Wal-Mart.
Option 2 : India is an attractive market for luxury goods.
Option 3 : There are different rules for retail firms and those that sell their own product.
Option 4 : India does not have a flourishing counterfeit industry.
- What does Devyani Raman’s statement imply?
Option 1 : Beautiful clothes are an important luxury item and should be taken care of.
Option 2 : The luxury goods market is becoming disorganized.
Option 3 : The supply of beautiful clothes is very high.
Option 4 : None of these
- What could be the meaning of the word modish, as can be inferred from the context it is used in first line of the passage?
Option 1 : Unattractive
Option 2 : Stylish
Option 3 : New
Option 4 : Beautiful
- What is the author most likely to agree to?
Option 1 : The current number of dollar millionaires in India is very high.
Option 2 : The current number of dollar millionaires in India is low.
Option 3 : The current number of dollar millionaires in India match world average.
Option 4 : None of these
- What is a good estimate of the middle class population in India today as inferred from the passage?
Option 1 : 583m
Option 2 : 100,000
Option 3 : 58m
Option 4 : 300m
- According to the author, which of these is not a problem for the luxury good firms in the Indian market?
A. High import duty.
B. Restriction on firms to enter Indian markets.
C. Difficulty in finding retail space.
D. All of these
At the end of 19th century India’s maharajas
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