MUMBAI, India — The Estée Lauder brand has made its debut in India by opening the first of four freestanding stores slated to open here in the next six months, with possibly another 20 locations on the drawing board over the next three years.
The Lauder store, a jewel box measuring 485 square feet, is located in the upscale Galleria @ Trident, which houses luxury fashion stores like Gucci, Jimmy Choo and Bottega Veneta.
Although Lauder does not break out sales results, industry sources indicated that the new Lauder store broke the opening-day mark set previously by Lauder's MAC Cosmetics at its Mumbai store. The new unit is on course to generate $1 million in volume the first year.
The next Lauder boutiques are slated for The Collection in UB City Mall in Bangalore and two in Delhi, in Promenade and Courtyard Malls, respectively. Like other companies that have entered the market, Lauder's parent company is working with trading partners. But unlike other enterprises, Lauder decided not to follow the popular model of opening a shop within a department store.
Daniel Annese, senior vice president and general manager of Estée Lauder International, said the company's consumer research showed that Indian women are highly attuned to high quality and service, and the company decided that the only way to express those attributes is through the brand's own four-walled environment.
He added that as many as 20 more locations are being scouted, primarily for freestanding stores but also perhaps for department stores. Those openings, envisioned for the next three years, will take place in other large and affluent Indian cities like Hyderabad, Pune and Kolkata.
"The timing is right to bring Estée Lauder to India," said John Demsey, an Estée Lauder group president, adding that the goal is to "introduce the brand to a whole new generation of women." He pointed out that since the brand is sold at more than 18,000 locations in 135 countries and territories, the products have been proven to suit a diverse climate range.
Annese said that the hottest seller, so far, was a special color collection called Jewels of Summer that was designed to pay homage to the Indian woman. It was created by Aerin Lauder, senior vice president and creative director of the Estée Lauder brand. It has soft tones of pink and brown for a natural day look and shimmery berry shades for a sophisticated evening look.Sonia Michon-Flochlay, vice president regional director for Europe, Middle East and Africa at Lauder, said, "We wanted to enter the market with a freestanding store to present the most comprehensive brand image to our Indian consumers.
"Our goal is consistent brand image with some local adaptation," she added. A foundation-airbrushing machine, an engraving machine to personalize lipsticks and compacts and skin and makeup consultants will also feature in the boutiques.
"Luxury is service. Every woman can be our customer," said Michon-Flochlay. "We are especially interested in the new generation of women who want a piece of luxury. Buying just a lipstick or moisturizer will get them access to our entire menu of services. This is our long-term plan. Though India has a high import duty, we did not want to pass this additional burden on to the consumer, so the Estée Lauder product prices here are at par with prices elsewhere."
All locations in India will carry the brand's best-selling global products, such as the upscale-priced Re-Nutriv skin care line and Advanced Night Repair. In addition, specific products developed for Indian consumers will only be available in India at the present time. Six new shades of Double Wear long-lasting liquid and powder foundations have been developed after extensive research specifically for the yellow-orange Indian skin tones. With Double Wear's 14-hour wearability, it is especially suited to the hot and humid climate prevalent here.
Regarding advertising, Michon-Flochlay said, "We are running our global campaigns in India to establish our global image with consistency as we do everywhere in the world with Estée Lauder. There are no plans for local models" (or an indigenous advertising campaign). Estée Lauder's signature advertising campaigns, featuring models Elizabeth Hurley, Gwyneth Paltrow, Carolyn Murphy and Hilary Rhoda, will be seen in India, as well.
With India's emerging market, huge population and growing affluent class, there is a corresponding burgeoning demand for luxury products that is being met by the new luxury product invasion taking place here. It is reported that 167 more global brands are launching in India just this year.
Furthermore, the luxury product and services market is now extending beyond just Delhi and Mumbai to other large cities such as Hyderabad, Bangalore, Chennai, Kolkatta, Chandigarh and Pune, to name a few.Brands like Lauder, which offer products considered "affordable luxuries," can play the volume game, unlike the ultraluxe international brands that only cater to the wealthy elite. The bridge of affordable luxury brands, like Lauder, will not only cater to the upper-tier income group but also the booming middle class, potentially a very broad customer base.
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