🧥 indian luxury king abhay gupta

Guys, welcome to another founder CEO Wisdom podcast. We have Abey Gupta with us. This is a luxury edition, which is something I'm trying out. Quite curious to learn more about that amazing industry. The richest man of the world is actually, yeah, LVMH Group. So caught my attention and I want to develop a bit more, learn about, more about these things. Abe is founder and CEO at Luxury Connect, but also Luxury Connect Business School, which is also something that we're going to talk about. He's a book author. His book is the Incredible Indian Luxury Bazaar. He's also an executive and team leadership coach, amongst other things. A real accomplishment here that we have today with us. Abe, welcome to the pod. Can you briefly introduce yourself?

Thank you, Charles, you're very, very kind. So, as you rightly said, I'm the founder CEO of a concept called Luxury Connect and Luxury Connect Business School. So Luxury Connect goes the entire value chain from strategy to scaling. So if there's a brand which wants to enter the Indian luxury space, we not only help them with strategy, but also with compliance. And eventually when you want to go into operations, you need people to execute the strategy. So we build the talent pool of people that brand would require. And in the past 10 odd years, we have trained, developed, educated about 4,000 odd executives and students which are part of the Indian luxury industry. So we're trying to change the skill landscape of luxury in India.

Yeah, tell us a bit more about that landscape because I think you wrote a book talking solely about that. The Incredible Indian Luxury Bazaar tell the luxury landscape in India.

So luxury landscape, Charles, is, is in a very interesting phase in the sense that it's on a growth path as of now. But if you really want to understand the landscape, I mean from a historical perspective, one needs to go a little bit into history to understand that. You know, we were subjugated by the British for nearly 250 years and we sort of got independence only in 1947. So we are that way, a very young country. But the fact remains that even during the pre independence era, I would say during the global World War era, World War I and 2, it was India which was, which is giving all the business to the European luxury brand. So so called the, the Chanels and the, and the, and the Cartiers and the Louis Vuittons of the world, they were all getting business from the Indian kings and queens. I mean, the largest number of the Rolls Royce was sold. Sold to Indian kings. Right. So from that perspective, India has always been a lucrative luxury market for the European luxury brands. And it's just that during the post independence era obviously the country went through a socioeconomic pattern change and that pattern change gradually went through a phenomena where I would say Bollywood played a very important role in terms of influencing. And it was only fashion which is considered as luxury until the early 90s when the market opened up again. The government opened up the market and international brands started coming into the country. It was only in the end nineteen nineteen hundreds that previously in stocks started coming into the country and some kind of a semblance of global fashion started coming to India. It was only in 2008 that the first luxury mall came up. And then rest is history. Since then we have not really looked back. So from a zero market size to a 40 billion size is the growth literally in about 20 odd years. And we've been growing at 20 plus percentage year, year on year. And it's projected that we should grow by three and a half times to touch about 180200 billions by in the next few years to come. So there's a rapid growth, there is rapid wealth creation happening in the country. You know the, the, the H and I population, India is growing at a rapid space and the brand value for India has gone up. Our Prime Minister has been doing some wonderful things abroad and you know, so there's a whole lot of socioeconomic shift which is happening which is causing the luxury ecosystem to develop at a, at a very, very, I would say that encouraging pace and brands are looking to come into India major league.

Interesting. And when you compare it to a market like China, because China really was the, the highest growing luxury market. The millionaires in China were growing like crazy, the billionaires too. And yeah, the spending was also reflected in that. So how does it compare to China?

So as compared to China, I would say that you know, the Indian consumer is, is completely different from a Chinese consumer. And once again I would say that one needs to go into a historical perspective because you know in the 80s when the China market opened up, you have, you had to imagine that pre 80s China had nothing. Everyone was completely in a very controlled environment and everyone was in their blue collared MYO suits and they were on bicycles. And suddenly the country went from bicycles to Mercedes Benz and, and BMW. So there was a cultural shock and there was rapid capitalization that took place which, which, which grew in, in terms of the number of consumption and number of stores rapidly opening up. Whereas India has always been a value seeking market, India is a very cautious with respect to spending. So India faces several challenges which China did not really face in the sense that we have our own challenges with respect to our duty, our infrastructure, our talent, our retail operations, etc. Etc. Which now over the years has been sort of taken care of and the government is spending majorly in terms of. Everyone knows that the retail infrastructure in India is growing at a very, very rapid pace. And then schools like mine have come up after I started the school 10 years back. So the talent problem has been resolved. The government is also working towards a lower duty structure, etc, yet there are challenges which are not as, as easy as in China. So it's a different market. We cannot compare India and China.

Right, Question for you, a psychological question because I want to talk about the luxury market itself. Not necessarily in India, but global, worldwide. What's the psychology behind luxury? Why do humans want stuff that is exclusive or, or high quality? And, and can you also talk about why the richest man in the world right now is Bernard Arnaud from lvmh? Like why. How does the market reflect the, the need or the want for luxury?

Well, I mean, you know, the answer to this question is in your question itself because you say the need and the want. But the fact of the matter remains that luxury is beyond need and beyond want. So luxury is servicing a desire. And each one of us has different levels of desire. I mean, you have a T shirt and you desire for a shirt, and if you have a shirt, you desire for a jacket and when you have a jacket, you desire for a suit. So it's a never ending cycle, It's a one way street. So, you know, in the definition laid out by Kobo Chanel, it seems luxury is the necessity which begins when necessity ends. So we are talking of not really a necessity item, but we're talking of a desired item. And desire is indefinable, it is unsurmountable and it's always relative and subjective. So the secret to success of louisvitho has been finding the right formula between maintaining the luxury quotient as well as the desirability quotient and democratizing luxury to a point where everyone in the universe can afford some Loewe item or the other. So he's democratized it in a manner that he keeps his luxury customers happy. At the same time, he also keeps the entry level luxury customer happy. So selling aspirations.

It's kind of interesting here because I, I go in many places. In Mexico last Friday I was in Cancun and in the bus you see like youngsters with AirPods Pros, you know, I'm not Sure, if they're replicas. But I often see youngsters with iPhones and they literally probably spend 50% of their yearly salary buying one phone. Or how can you explain?

Well, I mean again, you know, so I would say Apple is the first technological product which has created the luxury desire and it has done it through, I would say technological superior excellence, design excellence and service excellence, a combination of all three. Because you know, in the pre iPhone eras the mobile phone was not so user friendly, it was only iPhone which made the interface so very convincingly easy by not only combining various functions and bringing in apps, etc, etc, that the ease of using the Apple phone is incomparable to any other phone. So that's the basic philosophy that, you know, we don't talk of comparing ourselves with other, we say that we are incomparable. So iPhone has been able to manage to do that and they managed to continuously innovate, come up with new models and create the desired quotient to the extent that people are willing to stand in a queue just because the launch has happened. So the market skimming phenomena is very well adopted by Apple. The desire to own an Apple phone is one of the biggest, as you rightly said, that youngsters will probably not eat for days together, probably sell a kidney to own an iPhone, but they'd rather do that. So that's the truth.

Right. And it's so weird and interesting at the same time. Another question I have for you is with the venue of AI nowadays, do you think that luxury can be produced at mass scale? Because a lot of people, they like when a human builds their product, you know, or when this watch is Swiss engineered by some guy in Switzerland working with his lens and all of that. But bots and AI, they can produce that scale and they can personalize your item. Exactly. For you, what's your opinion on that?

Well, so you know, let's say that's a work in progress kind of a state. But as we speak there's a whole lot of integration of technology and the traditional craftsmanship era. So there is an integration of the two being brought in. So I would say that robotic manufacturing or robotic process automation is something which took place in mass, mass manufacturing products, right. But when it comes to luxury, I would say that when it comes to high precision instruments, where high precision is required, say for watchmaking, where a watchmaking jeweler expert has been spending hours together by use of automation, by use of artificial intelligence, by use of technology, we are trying to bring down, or the brands are trying to bring down the manufacturing Time. But yet the quotient of luxury is to maintain desirability. So one does not want to flood the market by using technology produced, mass produced items. But we definitely want to see an era where we reduce the effort required. But we make a marriage of the craftsman and the technological production, manufacturing processes. But technology otherwise has been used in various other functions like predictive analytics, for example, consumer forecast, for example, logistics planning, for example, price optimization, for example, product design, for example communication design, operational excellence. So technology in other areas besides just craftsmanship are really being used extensively. Blockchain, as you would know, you just spoke of the louisvithov. So louisvithov is the first one to have launched a platform called Aura. So Aura is being used to support authenticity of the luxury product because, you know, counterfeiting is one of the biggest challenges luxury faces all over the world. So using blockchain technology, one is able to trace back to the origin of the product, trains back to every sequential journey that product has gone through since it birthed. So that is really helping in terms of maintaining the authenticity and giving the genuine feeling to the, to the consumer. So technology has its own advantages, technology has its own, I would say, benefits that it's bringing to the luxury industry. And as we speak, there is a merger of technology and traditional craftsmanship that is taking place in the luxury space.

Right. One thing, one thing that just came through my mind is that there's a huge opportunity in the luxury industry and its fintech because these items, they cost a whole lot for normal people. I think that's the, the most interesting market segment. It's to sell luxury to normal folks, AKA the middle class or even the lower class, like I just mentioned in, in Mexico, although this lower class is somewhat the, the middle class in, in Mexico. And if you provide them financing. So I talked with a guy in Brazil that did that provided financing for iPhone 13, for example. So they had these folks paid a monthly fee for that. What do you think about that? And do you see any opportunity yourself into, for example, either renting a Louis Vuitton purse, for example? Am I right in saying that price is the great blocker, at least from a revenue perspective for these huge luxury companies?

No. So you're right, Charles, you know, so your question is in two parts. So first I go into the EMI or the monthly payout scheme or buy now, pay later kind of a scheme which became popular. But if you, that's very specific to product categories. And if you look at areas like automobile, for example. Right. So in markets like India, Automobiles have been sold on the basis of monthly payout schemes at a very low cost of financing for, for many, many years. That scheme then went into other other asset classes like real estate, for example, like watches, for example, like jewelry for example, has it percolated down to fashion products and accessories. I don't sincerely think that has really happened because the value of the product is not as much. And then the brands also want to put an entry barrier somewhere or the other when it comes to choosing the customer because they want to choose the profile of the consumer. Like a Ferrari would not sell a Ferrari to any Tom, Dick or Harry and they would first prepare the customer. Likewise Hermes Birkin is not available to anyone who goes there with just cash and put cash on the counter. So there's a whole lot of mix and match in terms of profiling the consumer because we live in a world of imagery and we cannot afford to dilute our image. So the process of democratization which started because the luxury brands got carpeterized and that corporatization culture came in the 90s, in the late 80s and 90s where independent designer brands were bought out by corporate houses like a, like lvmh. Right. So when a Richmond or LVMH or the Kering buys a independent designer brand, then their vision for the brand is more commerce oriented rather than only brand oriented. So then they have to resort to various geographical expansions as well as radical expansion with respect to democratizing the product coming out with I would say second lines or third lines of the product or bifurcating into product categories like a beauty and skincare and makeup etc etc. At the other end they also go up the value chain to create hospitality chains. For example, Bulgari also has hospitality chain. Bulgari is also giving you perfumes. So depending on your aspiration and your affordability, you can buy a hundred dollar perfume and still be a Bulgari customer. Right?

Right. Because here in Mexico there's this sports boutique that's called Innova Sport, which I went for before my swim in Cancun the other day. And they offer three to six months interest free plan on an Ike shirt that costs like let's say 100 bucks, which is interesting. So I'm seeing these, these trends around. Next question is that luxury is probably the greatest chicken and egg type of company meet. I was quite frustrated with my last physical business as per se we weren't in the luxury field with a Nootropica supplement. But if I relaunch a brick and mortar or physical good type of business. I think I'd go in the luxury field. Just looking at Mr. Bernard Zerno zerning and so forth. Well, should I see the family? It looks really interesting from, from a financial perspective. Just that, you know, high quality and luxuries about reputation. So then that begs the question, how do I go with that? So then there's probably two paths. There's the PR path, you know, to invent some value that or a story that probably does not fully exist. And there's probably the high quality path, which is, for example, me starting my Oaxacanian Mexican typical shirt that is sold by hand on a machine. And I'm gonna sell these shirts for at least 500 bucks every. Every shirt, for example. And that, that's the reality of it. I, I guess I could have of both, but to me, it seems incredibly hard to launch my own luxury brand and gain some traction even in the first year. Am I right in saying so? Because all of these brands, let's say Rolex, LVMH and Champagne brands, Verve, Clicquot and all of that, they've been built throughout the years and they have hundreds of years behind them. So how do you build a luxury brand? Quick is my question.

So. Well, I mean, you know, you're right that all these brands have, are at least a century old, if not more so. The fact of the matter remains that it's persistent quality delivered over time, making timeless designs with respect to, I would say, classic format. And it's not really a fad, which is seasonal and it's not fast fashion kind of a thing. So that comes as a basic denominator. It is coupled with heritage. It is coupled with a historic myth. It is coupled with a, with a designer name. It is coupled with a huge amount of storytelling. It is coupled with a huge amount of perfection. It is coupled with a huge amount of strategy. So today, can we create a luxury brand? Yes. Can we do it in one year? Perhaps? No. Can we do it in a decade perhaps? Yes. So I would say that through case studies, now that we are also active in the academic space, research says that there are documented procedures of what the brands are doing. So there are, there are, you know, there are theories which have been documented by, by names like a catfish. So you, if you adopt the luxury strategy from all aspects of how they have documented and how they have researched how these luxury brands have succeeded, perhaps you would be on a path to create a luxury brand. So I would say that luxury is not a bang bang, thank you, ma', am, kind of a Business, it's a really slow process. It's a courtship which you need to build with the product, with the designer, with the customer, with the operations, with the communications. Everything has to be in a very systematic and very, very concentrated manner. So what runs out first, is it your money? Is it your patience? That's really important. So one needs to have very deep pockets. One needs to be very, very committed to sop which he has to define himself in terms of not compromising at any level.

Right. For my agency, right, we do outreach, so we do sells. How can I infuse luxury in there? Instead of charging 2k per month, I can charge 5, 10k per month. Like how do you bring luxury to service based businesses like mine?

So well, you know luxury when, when you want to bring luxury element to your services, it's a question of extreme value creation. How do you create value for the customer beyond what is being sought by the customer? So really what we do is we talk of creating value, sort of delivering more under committing and over delivering. So if you are able to sort of bring that into your work ethos and work ethics, I think you will get into a position where people will start trusting you. So I agree that you know, all businesses are based on trust, but more so when it comes to luxury. So can we create an environment of continuous trust and continuous value delivery beyond what has been committed is what is probably going to give you in, in due time you're able to raise up your per ticket cost.

Right? One last question for you because I know we're on time here. I've seen, I call them luxury stunts in the last few years, meaning that folks are not necessarily having that Louis Vuitton belt to prove that they're rich. In the, in the last couple of years I swim in the Silicon Valley pond of things and I'm seeing, I'm seeing lots of displays of wealth that are somewhat different from the typical ones. For example, having an NFT a board ape as your Twitter profile picture. Well, the guy probably just paid 25k to have that or owning.com domains I own personally, various very cool.com domain names that other would want. I'm all seeing health stunts that show that people have cash. If we check Brian Johnson, the biohacker guy that hacks every component of his health, he spends at least 2 million a year on his health. Me personally, well, I'm a biohacker too. I look good because I take care of my health. That is somewhat of a luxury stunt and not a vanity move, but just to Prove that I have it. You know, what other flaunts of wealth have you been seeing nowadays and how might that dictate the industry to a new direction that might not be physical goods based?

Well, so you know, post Covid, a lot of consumption habits have changed as you, you know, as you're probably aware as well. And you've been seeing it all around you. So today the definition of luxury is taking a new meaning altogether and people are, are basically going in for more heritage oriented products. So the focus is buy less but buy better quality. So it's quality over quantity seems to be the new mantra. Sustainability seems to be the new mantra. Consciousness for environment seems to be the new mantra. Health and wellness takes all kind of priority over anything else. So if one is able to create a experience around health and wellness, I think people are willing to pay for that. Needless to say, it's not only the experience, but it's the entire package. When I said extreme value. So we are not only the product, the product could be a yoga outing, but the yoga outing, I mean the wellness retreat itself has to be oozing luxury from all aspects. Then people are willing to pay for that. How do we escort the person? How do we sort of, you know, how do we sort of transport him from his current environment into that environment is where people are wanting to get into, you know, you know, space travel. People are talking of space travel. So those are new dimensions, new directions people are wanting to get into.

Right. In my world, I also see it with the companies someone is starting, you know, so if they're trying out moonshots, that is another example, a classic one that still hasn't got down. And that was, it's probably, yeah, one of the last interesting topic here that I, I wanted to ask you about. It's the acquisition of, was it, was it Forbes that was acquired? I think there was. They were acquired by. Yeah. Austin Russell, 28 year old guy billionaire and he acquired, he acquired Forbes. And that's interesting times, right, because we, we still see on LinkedIn, you know like 30 under 30 and all these lists, it still has some weight but on the other end, like us, us top folks, we also know that you know, Forbes isn't, you know that it's more vanity than, than substance. We, we also know that it's also a blessing and a burden. Right. We've seen Sam Beckman Fried on the COVID we've seen Elizabeth Holmes of Terran Olse. And it's not necessarily against these people. It's just that you can Be on the front of Forbes cover one day and the next year like rotting at the bottom because it's just the cyclical nature of things. So my question for you, with Forbes reputation somewhat declining and people may be carrying a bit less, or maybe I'm totally wrong about that, do you think it was a good acquisition? The guy paid $800 million for it, so he spent most of his net worth in it. And what can you do with a business luxury brand like Forbes? How can you pivot it to one specific direction? Any ideas?

Well, you know, so all said and done, you know, so while you, what you say about Forbes is right, that, you know, is perhaps it's gone down with respect to its value perspective, but the fact of the matter remains it still has a certain amount of brand value. It certain has, it definitely has a certain amount of reputational goodwill which can be recovered. It's a question of going back to the roots and repositioning the. You know, it's a question like, why did Elon Musk buy a Twitter? I mean, it could be a very foolish acquisition to some, it could be a very, very wise acquisition to some. And it's yet to be seen because, you know, since you acquired it, we know, we know the ups and downs that the platform is going through. So, you know, there is no logic to these kind of rash acquisitions. Rash to people like us. But I'm sure they have their own, their own designs which are, you know, difficult to apprehend today.

Right. Yeah. The Twitter acquisition is so tricky. I think that bottom line, it wasn't necessarily a good acquisition, but Elon Musk is such a beast that he will turn it around in, absolutely. In a couple of months time. But yeah, he still has problems fixing these bots, you know, which he, he kind of like had an asterisk before actually acquiring the, the platform. But yeah, thank you for your time. A bit. That was pretty cold. I really love the interview. I got a bunch of insights out of it. Where can people find out more about you?

LinkedIn. I have a LinkedIn profile. There's also a website called Abhagupta In. So people can sort of reach me anywhere that they want. And thank you for mentioning about my book. It's there on Amazon. People can find it if anybody wants to get any access to Indian markets.