Rikh's Blog

The article from the financial times is about how the luxury fashion house Hermès started selling saris in India and how it sees India as a huge market for the brand to penetrate. Although the company has it doubts whether it would be successful in the country where the annual growth of sales is 20 percent.

Personally, I would think that Hermès is taking a huge risk here because the country already has well known sari designers that have been around longer than Hermès and also these designers are local and they know the market and changing trends better than Hermès would. However, this weakness might also be turned into a strength in a sense that more Indians would embrace the idea of the westerner company selling saris as it would be something new to them. However, I do not think that Hermès could control the luxury market by its saris. Rather it should aim to provide high quality goods of  a more western style and taste, its niche. Furthermore it is mentioned in the article that due to trade tariffs, these goods would be more expensive than if they were to purchase it abroad. This could be a deciding factor in which Hermès would make a profit in India as consumers would rather purchase these goods at a cheaper price overseas. Hermès is also establishing a brand presence by distancing itself from other luxury brands such as Gucci and Giorgio Armani by housing its stores away from the usual cluster of designer stores. This is an effective way of marketing a Veblen good and consumers wouldn’t mind paying more for a more exclusive brand. All in all, we would need to observe whether Hermès did the right thing to market its saris in India.

High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/5c73d1b2-f0bf-11e0-aec8-00144feab49a.html#ixzz1a9fWwRft The European luxury company called the saris – which will sell for $6,100 to $8,200 – a 'wink' to Indian consumers

 
Source: (http://www.ft.com/intl/cms/s/0/5c73d1b2-f0bf-11e0-aec8-00144feab49a.html#axzz1a9Wflth7)