Luxury brands in India have increased their advertising spend by 8-10 percent with a focus on high-value intellectual property (IP).With revenues for premium and luxury brands soaring, advertisers are investing in sports properties, with some opting for experiential media to reach the premium consumer base.Sections like cosmetics, fragrances and automobiles are seeing huge spend on advertising.
Driven by rapid economic growth, India’s luxury goods market is expected to expand 3.5 times to $85-90 billion by 2030, according to a Bain & Company report. These factors make India the fastest growing luxury goods market in the world.
Jio World Plaza, which opened last year in BKC, Mumbai, is home to global luxury brands such as Louis Vuitton, Gucci, Burberry, Valentino, Dior, Balenciaga, Rolex, Bottega Veneta, Cartier, Bvlgari and Jimmy Choo. The 750,000 sq ft shopping centre is home to India’s first Tiffany & Co., Versace, Bvlgari and Pottery Barn stores. The mall has a total of 66 internationally renowned brands.
In-demand sports facilities
D’Decor’s premium brand FabriCare has allocated Rs 20 crore for advertising and marketing, with the brand earmarking Rs 50 crore over three years. FabriCare is advertising across high value IPs like Koffee with Karan and IPL.
“FabriCare is a new premium brand and hence we spend a lot on advertising and marketing. On the other hand, De’Decor is an established brand and therefore does not require much in marketing and advertising,” says Ajay Arora, managing director, D’Decor.
Elaborating further, Arora said, “Consumers are moving towards digital and using it as a medium. The digital pie chart is expanding and the mass media pie chart for premium brands is shrinking — less TV, more digital. We are investing in platforms where the premium consumer is and will continue to invest in that IP.”
Hema Malik, chief investment officer, IPG Mediabrands India, said, “More brands are opting for experiential media these days. We are also seeing more local celebrities endorsing international brands. Overall, investments have increased by nearly 8-10 per cent. However, one needs to understand that these brands will grow from year one to year two while fewer brands are entering the category. If you look at the category growth rate for media spend, it will be 12-15 per cent.”
Malik added, “Many brands are investing in the IPL, which is a relatively big event. Omega has invested in Olympic sports and has partnered with athlete Neeraj Chopra. Omega is another luxury brand that is standing out with its advertising spend.”
Evocus, a black alkaline water brand, has banked on high value IPs like IPL, Olympics etc. Many celebrities like Virat Kohli, Malaika Arora, Karan Johar, Badshah, Shruti Haasan etc have been spotted drinking alkaline water.
Aakash Vaghela, co-founder and managing director, Evocus, said, “We have experienced significant revenue growth of 100% over the past year, driven by increased consumer spending on quality products. This growth trajectory is expected to continue as more consumers prioritize health and wellness. We look forward to sustained growth and reach by introducing new innovative solutions under the Evocus brand.”
Vaghela further added, “To increase the reach and awareness of the brand, our advertising spend has increased significantly. We are now allocating around 30% of our revenue towards advertising, up from 20% two years ago. We advertise across multiple mediums – digital platforms, social media, select print publications and other appropriate platforms to effectively reach out to our target audience.”
Targeted media is now the preferred choice
Spotify expects advertising revenue to grow by over 30% during the upcoming festive season. Speaking about why advertisers are choosing Spotify for their premium products, Arjun Kolady, Head of Sales, Spotify India, said, “Advertisers are focused on premiumisation and looking to move consumers up the value chain by increasing average selling price and basket size. To achieve this, they understand that they need to target audiences with the right purchasing behaviour and consumption patterns. Spotify fits well into this premiumisation effort across all the categories we cater to.”
“For example, if an FMCG conglomerate wants to promote low-cost or non-premium products, Spotify may not be the best platform. We typically deal with premium ranges of branded products in all the categories we are involved in,” he concluded.
“Traditionally, demand for luxury goods in India was primarily driven by high-income earners looking to demonstrate their social status. However, in recent times, we have seen a steady increase in demand from the affluent middle class, who see luxury goods as a symbol of achievement,” said Delice Ross, senior vice president and business head at Madramax.
Ross further stated, “Premium and luxury brands have increased their ad spend by around 8-10%, with the highest interest in cosmetics, fragrances and automobiles. Instead of traditional branded advertising, luxury brands are now focusing on content branding and native advertising with relevant publishers. The shift from traditional to targeted media is now the preferred option for luxury and premium brands.”
The surge in premiumisation in India is boosting brand revenues while also boosting advertising spend in the country. It will be interesting to observe the growth trajectory of premium and luxury brands in India, especially as demand for mass-produced goods gains momentum.
