Characteristics of Indian Consumers
The average disposable income of the Indian urban consumer is increasing hence the market for all consumer products is expanding, including for fashion accessories. Consumer demand for premium products is on the rise, and style conscious customers with money look for variety. Consumer inclination for mix-n-match to build their wardrobe is acting as a catalyst in the growth of accessories market.
Socialites
These are the upper class who shop in specialty stores and own exclusive accessories, and have a luxurious lifestyle. These people are ready to pay any amount on exclusive and stylish accessories, be it an Omega watch or a Prada eyewear. Luxury goods market in India was pegged at USD 4.35 billion in 2006 which is expected to triple to USD 14.35 billion on 2010 seeing the increasing number of millionaires in the country.
Conservatives
These are the middle class population of India, who are very price conscious and demand more value for money. A middle class man is discerning in how he spends, i.e. even though he is willing to spend a substantial amount of money, he demands the best option within that amount.
Working Women
Working women with disposable incomes are the key factors for the growth of women’s accessories. An Indian woman is no longer just a homemaker. She is willing to buy designer products and is ready to pay high premium for them, which may be as high as Rs 15,000 per piece for a designer shawl.
Youth
With the increasing exposure to International fashion styles, the Indian youth is gaining more awareness and becoming style conscious. This segment believes in impulsive purchasing. The role of today’s young generation has changed in the decision making process and is ready to pick up latest and trendiest accessories from the market.
Degree of Elasticity of Demand of Local Consumers
Considering that price elasticity depends to a large extent on the extent of competition among the manufacturers, the Lower and Economy segments of the market are usually price-inelastic. These segments being highly competitive do not allow the manufacturers any leverage to increase the price.
Higher up along the value chain, the affordability or paying capacity of the consumer is higher. The product market which characterizes mid-product segment becomes increasingly quality oriented and more diversified. Despite competitive pressure, the price in this segment keeps on rising. The demand for the product becomes price elastic.
In case of premium and super-premium product segments, where entire focus is on quality, style and brand value, the consumer is insensitive to change in price.
As per the findings of retailer survey, even an increase of 5% in the price has an effect on low end economy category products, while mid-end category is usually able to absorb a 5-10% price increase without a major adverse impact on the sales of a brand.
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