Dibrugarh, on the banks of the Brahmaputra in Upper Assam, is one of the state's largest tea producing districts, which has earned it the sobriquet "Tea City of India." Recently, Adhiraj Agarwal, 48, acquired a tea estate in the town, along with two partners. Now Agarwal, his business interests notwithstanding, wasn't exactly looking for a teetotalitarian way to celebrate the acquisition.
"Unfortunately one can't just go out and buy champagne, let alone top quality champagne in Dibrugarh. So I called up a friend who works for Moet Hennessy India (from the stable of luxury goods major, the LVMH Group) for help to order at least 50 bottles. Barely 48 hours later, there was this courier boy standing on the doorstep of my bungalow with the parcel. They even sent the napkins to wrap around the glasses," gushes Agarwal.
From the North East to a sleepy village on the outskirts of Pune in Maharashtra, in which resides one R. Dastur. Dastur is in no mood to reveal what the R. in his name stands for, or how he earns his ample stash ("I have my own business," he grunts)— not even the name of his village. What he is willing to divulge is his love for the good life—and his romance with the Mont Blanc brand. Dastur owns a gold-plated Mont Blanc Sport Automatic watch worth a little over Rs 5 lakh. And recently he got another Mont Blanc model for his wife with a tag touching Rs 12 lakh.
SMALL TOWN INDIA IS GETTING RICHER
Source: 2009 Capgemini/ Merrill Lynch Asia-Pacific Wealth Report
They're ones with a fortune and— with due to apologies to C.K. Prahalad —sitting pretty on top of the pyramid. If you thought it's only well-heeled city-slickers who have a penchant for fast cars or some limited edition brew from the highlands or a diamondstudded timepiece, consider this: Ludhiana in Punjab is the largest market for Rs 1 crore-plus watches in North India, after Delhi.
Down south in Coimbatore, Porsche and Audi, both high-end automobile brands from the Volkswagen stable, did roaring business in 2009, selling 35 cars; in that same year, the two luxury car brands sold some 1,800 cars in India. In Surat in Gujarat, some 11 Mercs priced between Rs 27 lakh and Rs 3 crore were sold in December last year. Cochin in Kerala was the fastest-growing market for small boats and yachts in 2008-09.
The upshot: Non-metro India has its moneybags, some of them farmers, others businessmen, and yet others who've left the big cities for some peace and quiet, their riches in tow. According to the 2009 Capgemini/Merrill Lynch Asia-Pacific Wealth Report, the high-net worth individual (HNWI) population in India—those who are millionaires in dollar terms—is expected to almost treble from 84,000 HNWIs in 2009 to 2.5 lakh by 2018. And here's the number that's sending marketers of luxury goods up country: 35-40 per cent.
That's the percentage of HNWIs who will be based in small-town India. The study also points out that wealth is growing at the fastest rate in small towns. Already, there are 51 districts that, put together, have twice the market potential of the four metros combined. This is expected to get more geographically dispersed. According to AT Kearney's India Luxury Review Report of 2007-08, the market for luxury products in India will be in the $25-30 billion range by 2015. Non-metro India could account for at least $10 billion of that.
"Marketing in India has to be different from many of the other economies we operate in, simply because of the sheer size of the country and the great geographical diversity. The fact that people with massive surplus incomes reside right across the length and breadth of the country doesn't make it easier," says Benoit Tiers, MD, Audi India.
|PRODUCT||METRO/SMALL- TOWN RATIO NOW||EXPECTED RATIO IN 2015|
|Rs 1 cr+ watches||95:05||80:20|
|In many cases people who live in small towns come to a metro to buy smaller luxury products such as suits, watches or fragrances. The ratio is an estimate taking into account both people who actually order from a small town and those who live there but have made a purchase on a trip to a metro.|
Across luxury categories, marketers are making efforts to penetrate deeper. Top-end bespoke suit maker Ermenegildo Zegna, for instance, flies down their master tailor to a client's residence for fittings and trials. "There is a market in smaller towns and if a client lives in a city far from our showrooms, and for some reason cannot travel, our team visits them in their city of residence for both measurements and then again for fittings," says Shantanu Mukerji, GM India and Asia Pacific, Zegna, who is based out of Singapore.
Even luxury yachts are finding their way out of traditional markets like Mumbai. Distributors such as Marine Solutions, West Coast Marine and Azimut Benetton deliver a yacht, complete with a captain and crew, to any city or port in India. "We have offices in quite a few cities such as Kolkata, Vizag and Goa apart from Mumbai but then our clients also live in small towns of Maharashtra, Punjab, Gujarat as well as many places in Andhra Pradesh and Madhya Pradesh. We have sold boats to clients living as far away as Sikkim," says Anju Dutta, MD, Marine Solutions. (Whilst yachts are sold primarily in coastal areas, sail boats and motor boats are sold in landlocked regions too, which have their own lakes, say, the lakes in Bhopal, Upper Lake and Lower Lake).
Some products of luxury clothes and accessories giant Gucci, too, are available online, making inroads into non-urban India. On rediff.com, for instance, clients from over 400 cities and towns can have Gucci perfumes, eyewear and other accessories, whose prices range from Rs 3,000 to over Rs 1 lakh, home-delivered. That is precisely how K.S Narula (not his real name), a resident of Bhatinda, bought his wife a set of three Gucci "Envy Me" perfumes. "It would have cost me a lot more to fly down to a Gucci boutique in Delhi or Mumbai," says Narula.
Also using the Internet—but for a different purpose—is Porsche. "We have a facility where a buyer can design his own Porsche on our website. You could, as one customer did, have an electric slide glass sunroof added," says Rod Wallace, MD, Precision Cars India, the sole distributors of Porsche in India. "A majority of our customers in India are still in their early 40s against the global trend of Porsche buyers being 50-plus, and 25-30 per cent live in smaller towns," he adds. Of the 720 Porsches sold in India to date, over 200 were sold outside of the metros. As more get richer and ambitious in nonmetro India, be ready to spot 911s and Cayennes cruising down newly-built highways of non-urban India.