When Pakistan's new foreign Minister, Hina Rabbani Khar, made her first official visit to India this summer, it wasn't the looming India-Pakistan peace talks that got the local media chattering. It was Khar's oversize Herms handbag. pak puts on its best face, read a Times of India headline. Fashion blogger Amara Javed tweeted that Khar looked "more glamorous than Catherine Middleton. Take THAT world." Khar's Herms Birkin bag, an exclusive item carried by such Western megacelebrities as Heidi Klum and Catherine Zeta-Jones, lent her outfit Western movie-star flair. But the bulk of Khar's glamorous getup a flowy blue tunic and matching scarf honored her native style.
Khar's costume was illustrative of the state of the luxury-goods market in India: fashion watchers may fawn over Western-designed handbags and accessories, but when it comes to women's apparel, local designers can't be beat. Chinese, Brazilian and Russian consumers will wear whatever European and American designers decide is cool. Not Indians, who are much more devoted to their traditional garments.
Now Herms, a 174-year-old Parisian fashion house, is hoping to change that by marrying its luxe heritage and craftsmanship to Indian tastes. In October, under the direction of Bertrand Michaud, president of Herms India, the company launched a limited edition of French-made saris aimed at wooing Indian women. "The Indian people know quality and craftsmanship," says Michaud. "We're bringing the best of our silk craft to an Indian piece."
Herms is the first Western designer to not only attempt a line of saris which sold out for roughly $6,000 to $8,000 apiece within six weeks but also try to design specifically for Indian fashion tastes rather than just export the clothing that's selling in Europe or the U.S. The idea, says Michaud, is for Herms to "be part of Indian life."
And to cater to a flush emerging-market elite. The Chinese luxury-goods market, for instance, was already worth $12 billion in 2010, and it's expected to more than double by 2015, to $30 billion. It would then account for roughly 20% of global luxury sales. In India, an economy about one-third the size of China's and with one-fifth the number of millionaires, there's a lot more room to grow. Luxury sales totaled approximately $1.6 billion last year and are expected to expand to $4.2 billion by 2015, or roughly 1.4% of global retail sales. High retail tariffs and a tight urban real estate market for street-level stores have compressed sales in India, but so have more conservative tastes. When Indian consumers want to make a splash, they tend to spend on high-quality local jewelry and restaurants rather than brand-heavy Western clothes. Getting Indian women to forgo their local, custom-tailored saris for Western designs is a tougher challenge for firms like Herms.
Making profit margins large enough is also tricky, since creating bespoke saris doesn't necessarily suit fashion houses that "design products for the whole world," says Neelesh Hundekari, an analyst at management consultancy A.T. Kearney. That may explain why Herms' sari line was limited to 27 pieces. For now, the limited line "makes a sudden impact," says Hundekari. To win the war of profit as well as press will require a longer view.
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