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In his 3rd and final part on India, Dez Morgan talks about the luxury goods market in India.

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Hello everyone this is Dez here bringing you the 3rd and final episode from my recent trip to India. Today I would like to talk about the luxury goods market in general and luxury goods sales in in India in particular.

Let me start with a question? Which country has the most $US billionaires in the world? You may or may not be surprised to hear that China has beaten the U.S. into second place in terms of the super rich with India coming next in third place.

Another question. Where is the most expensive real estate in the world? New York, London, Switzerland?

Perhaps surprisingly it is none of those but an ocean facing bungalow in Mumbai that was reputed to have cost close to £650 million. In 2006 Lakshmi Mittal held the world’s most expensive wedding for his daughter in London at a cost of $78 million. All of which tells us that there is an increasingly large number of wealthy Indians that are not afraid to spend.

So how has that been reflected in luxury goods sales especially considering the current slow down in the World economy? You might find this surprising or may even make you angry but high net worth individuals or HNIs, as the wealthy are often called, suffered very little through the recent downturn. In 2010 the global economy grew at just 2% compared to the 8.3% growth in wealth for the average HNI. In the U.S. which is still reeling from the recent financial crisis the growth in wealth of HNIs was an even more impressive 9.1%. Things fared comparatively even better in India with the number of HNIs moving from 14th place in the World to 12th.

All of which is background to our story. So let’s do it. Let’s get D2B…Down to Business with the luxury goods market in India.

Two things that had certainly changed since my last visit were the number of luxury cars on the road in Delhi and the amount of luxury retail stores that opened up.
Looking at cars first, when I was there 10 years ago the Hindustani Ambassador was the most common sight on the roads. An Ambassador is basically a car manufactured in India but designed in Britain in the 1960s. A great timepiece but not the car to power a modern economy. Now the situation is totally different, although many of the cars are home produced Tatas or Maruti Suzukis there was a noticeable presence of more luxury cars. As an example Mercedez Benz, often seen as a benchmark in luxury car sales, had its best year ever in the Indian market in 2010 with sales up 80% over the previous year. Harley Davidson, the luxury motorcycle maker, can’t produce enough units for the Indian market and there is a 4-6 month waiting list at its flagship Mumbai showroom.

Moving to luxury retailers; Mont Blanc pens started 10 years ago in India with a small shop in the lobby of the Taj Mahal Hotel. It now has 17 outlets across India and is considering buying out its local partner. Such stories abound across the luxury a goods market but is this trend here to stay? Seemingly yes. Crisil Management, an India based management consultancy firm, predict that the jewelry and luxury car markets could be worth £32 billion and £21 billion respectively in 2011. A further report by Merrill Lynch stated that demand for luxury collectables, namely art and jewelry remain strong throughout 2010.

As we have seen the rich aren’t getting any poorer and it’s probably safe to say they won’t stop spending any time soon. All of which looks rosy for the luxury goods sector around the world and in India especially.

So that was the story and now it’s time for us to get D2V…Down to Vocabulary.

My first word today is the verb to reel which originally comes from boxing and means when a boxer had been hit and had still not recovered from the blow. In the story I said that the U.S. economy had been hit by the economic crisis and was still reeling from the blow. A further example would be the uranium and nuclear energy industries are still reeling from the disaster at the Fukushima power plant.

Next up I have a further verb for you to fare which means how well or how badly a person or an industry is doing. So we need to add an adverb such as well or badly to indicate whether the feeling is negative or positive. In the story I state that the wealthy in India have fared better than the wealthy worldwide. Another example would be how the search engine Internet Explorer has not fared so well against competition from Firefox and more recently Chrome.

Now I have the noun benchmark which means the point against which all things are measured. In the story I say that the Mercedes is often seen as the benchmark against which all other luxury cars are measured. Which means that when considering a luxury car a buyer would think is it better or worse than a Mercedes? An example from business would be the Chinese economy is often seen as the benchmark against which all other emerging economies are measured against.

I have another noun for you now; which is flagship. Originally the flagship would have been the main battle ship in a fleet of ships but now it is often used to describe the biggest shop in a retail chain. In the story I say that the main or flagship showroom for Harley Davidson in India is in Mumbai. Apple had just opened a new flagship store in Tokyo just before I left in 2007 and I wouldn’t mind betting that Skip was one of the first people through the doors.

Finally I have an adjective for you rosy, which means when a situation has no problems and is going very well. I end the story by saying that the luxury goods market looks promising or rosy going forward into the future. An example of an industry that doesn’t look at all rosy is print media with the recent scandals happening in the UK and the constant attacks from digital media as it evolves and changes.

That is about it then on the luxury goods market, which just leaves me to say I hope you enjoyed the show and found some of the vocabulary useful. Please check us out on the web at www.downtobusinessenglish.com or visit the Down to Business English Facebook page.

We can be reached at downtobusinessenglish@gmail.com and Skip and I would love to hear from you if you have any comments or recommendations for topics you would like to hear about in future shows. Thanks for listening and see you again soon. Goodbye.