Last week, I came across a news article that stopped me in my tracks. Apparently, the world's fastest car – the Bugatti Veyron 16.4 Grand Sport, for the uninitiated – is all set to hit Indian roads on October 28th. While I appreciate the need for speed in the dynamic economy that is India, what really took me aback was the price tag – an eye-watering `120 million (i.e. approximately US$2.7 million). (That one can probably count on one hand the number of Indian roads where an owner will actually be able to test the car to its potential is a different matter and one that I will leave for another time.)
The chosen date for the Bugatti India launch – October 28th – is an auspicious day. No, I have not checked my crystal ball. Neither have I consulted an astrologer. However, I am sure Mukesh Ambani and his family have. It just so happens that October 28th is also the day that the elder Ambani and his family are having a house-warming party to celebrate their new, US$1 billion residence in Mumbai. While the family is being as under-stated as you can be about a 27-floor house for a family of six, ‘Antilia’ (the mansion) is understandably attracting much attention.
So, are India’s rich simply getting richer and leaving their brethren behind? Apparently not.
- India has the fastest-growing population of millionaires in the world, according to Forbes.
- India's wealth has tripled to US$3.5 trillion in the last decade, according to Credit Suisse. Their analysis highlights that by 2015, India's wealth could double to around $6.4 trillion. The report notes that, contrary to popular belief, India's wealth distribution is skewed towards the lower end of the wealth pyramid.
- Wealth held by individuals in India is said to be growing at a 26 per cent compounded rate, more than four times the global average.
The implications for the luxury market are obvious in terms of potential, though not so obvious in terms of strategy. In fact, study after study has shown that in order to succeed in India, luxury brands need to localise their marketing strategies.
This begets the question, is Indian wealth becoming typified by the motto ‘if you’ve got it, flaunt it’? Not necessarily.
Technology czar Shiv Nadar has committed to put aside well over 10% of his wealth for philanthropic ventures. Soap-to-software magnate Azim Premji has recently announced that he will personally be setting up a US$1 billion education endowment fund. Ratan Tata has announced a US$ 50 million donation to Harvard Business School, while Anand Mahindra has announced US$10 million to the same alma mater.
Yes, wealth is coming out of the Indian closet. Is this unique to India? No. According to a recent study by the Asian Development Bank, by 2030, Asia’s consumers will spend US$32 trillion, accounting for 43% of global consumption.
Perhaps M/s Bugatti’s parent, Volkswagen, hopes to realise its literal translation - ‘the people’s car’ - in the world’s most populous continent.
If you would like to understand more about how to increase the growth for your organisation by deepening its engagement with India, do write in at ratika.jain@whiteowladvisory.com.
