Premiumisation in the Indian Luxury Watch Market Industry in Odisha

Abstract

The luxury goods segment in India has seen tremendous growth in recent years, with several international luxury brands entering the Indian market. Luxury goods are a niche market segment, wherein the consumers desire exclusivity and are willing to pay heavily for it. Thus, luxury brands are priced at a premium, to maintain their exclusivity. Obviously, the more unique and exclusive a luxury brand is, the higher its expected brand premium. The present study uses dummy variable regression to estimate the premia associated with luxury watch brands and product features. The results of the study indicate statistically significant brand premia, using which the brands can be grouped into distinct segments, and statistically significant product feature premia, including for gold-plated casing and titanium and ceramic straps, and for several special functional features such as world time and chronograph. The results of the study support the exclusivity hypothesis, that the exclusivity of luxury brands is the fundamental basis for luxury brand premium, through greater diversity of product variants in higher price range, using unique casing and strap materials and innovative functional features. This reflects the strategy of premiumisation of pricing of luxury watches, with greater emphasis on value-add features and complexity (total number of complications and moving parts).