India Fashion: Mohan Murjani on the advantages of selling luxury in India

I extended my trip to Mumbai by a day so that I could sit down with the man responsible for bringing many of the big luxury brands -- Gucci, Jimmy Choo, La Perla, and Tumi -- to India. I expected the conversation to go the way it does with the people doing the same job in other developing countries, i.e. lots of talk about pent-up demand, buying power, longing for Western goods. Since India, unlike China or Russia, has a thriving national fashion industry I was a bit wary. Especially as this is the man who has built his names on building Western brands like Gloria Vanderbilt Jeans and Tommy Hilfiger not in India, but in the West. But Murjani is not a simple evangelist for the big brands. He is a proud supporter of India and is working to help the local industry develop too. He has simply focused his groups energies on Western brands because that is where he sees his strengths as being. But he also was involved in setting up the National Institute of Fashion Technology and remains a Dean there.

He says in the Indian consumer is different than that of other developing countries for three key reasons:

1. Media. Unlike Russia and China, Indians were always allowed to travel and were always allowed access to Western media. So when he arrived with Calvin Klein, the papers were able to reminisce about the Brooke Shields Calvin Klein Jeans ads of the 1980s even though they hadn't been seen in India. Indians, he said, "instinctively understand the heritage of these brands." Russians may have had great style, but it came from the ballet and the theatre. Whereas in China people wore only grey and had never heard of Gucci.

2. Shopping Habits. When an Indian girl gets married, she invests in the best trousseau she can, with the finest lingerie she can afford. This means she has already had a taste of "luxury" -- what ever that may mean for her. This has two effects -- although she may not be a typical "luxury" consumer, for this event she is. And there are enough women getting married in India each year to support a line of luxury underwear (hence his La Perla franchise) and, with the increasing purchasing power that comes from both higher-paying jobs and an increase in the use of debt, this woman now has more money to spend on luxury items after she is married. Murjani estimates that although salaries have only tripled in the last 10 years, spending power has gone up 10 times.

3. Tastes. Young women dress the way young people do all over the world. But after marriage they tend to dress more traditionally. And for formal occasions, that means, as often as not, a Sari. During the day traditional Indian clothes are traded with Western ones. So he says that the brands that focus on eveningwear are going to have the toughest time in India. But Indian women are welcoming to brands that work with what they already wear -- brands like Jimmy Choo, strong in strappy sandals, or like Gucci, strong in handbags.

Next from Mr. Murjani -- some of the unique problems facing India