The Spanish fast fashion gaint — Zara, is often perceived as a symbol of luxury in India. What puts the brand to a higher viewpoint in the country's fashion market?
Photo: Zara Mariacarla Boscono Campaign'23
The growing sector of Indian consumers with disposable incomes desire to stay ahead of international trends. Zara taps into this desire by offering a constant influx of trendy and affordable fashion pieces, making the consumers feel connected to global fashion movements.
Owned by the Spanish retail group Inditex SA, Zara entered into the Indian fashion market in the year 2010, through a joint venture with Tata Group’s retail arm, Trent Ltd., forming Inditex Trent Retail India Pvt Ltd (ITRIPL). The 51-49 percent partnership was in line with Foreign Direct Investment (FDI) norms.
In the fiscal year 2023, Zara recorded an impressive 40.42% year-on-year growth in India’s revenue, reaching INR 2,562.50 crore, with profits rising 77.66% to INR 264.30 crore, as reported by Trent Ltd.
Behind Zara's perception as a luxury brand in India is its price positioning strategy. While Zara is generally considered an affordable fast-fashion brand globally, it's products in Indian currency are relatively higher compared to other local brands. Products can be priced as high as ₹12000, with tops and shirts ranging upto ₹4000, dresses upto ₹8000, and pants and jeans upto ₹6000.
The slight premium in pricing creates the impression of a higher-value product and fosters a higher viewpoint for the brand. Consumers often equate these higher price points with superior quality, making Zara's affordability a proxy for luxury. Limited discounting and sales further reinforce the perception of exclusivity and luxury.
Indian consumers tend to associate luxury with international brands and rely on social validation. Zara's popularity and global recognition acted as social proof, leading Indian consumers to perceive it as a luxury brand. The desire to be associated with a well-known international name and the social status that comes with it contributed to the brand's image of being a superior in the market.
Interestingly, Zara does not spend on conventional advertising. Instead, it invests in high-rent locations next to iconic luxury brands, and feed on their popularity to create a halo effect. In 2017, Zara opened its largest store in India in Mumbai, housed in the heritage-listed 110-year-old Ismail Building in South Mumbai, spanning 51,300 square feet. Jesús Echevarría, chief communications officer of Inditex, highlighted the importance of the Asia region, saying to Forbes: “Asia region is among the fastest growing markets internationally.” He added, “We try to find pieces of heritage in a city and try to add value to it.”
The reason behind Zara's appeal as a reputed luxury brand in India's fashion market can be credited to a blend of various factors. Together, these elements create an image of Zara as a coveted label that embodies the values of luxury, fashion-forwardness, and exclusivity in the minds of Indian consumers. It's important to note that perceptions of luxury can vary among individuals based on their personal experiences and backgrounds. While Zara may be seen as a luxury brand by some in India, others may view it purely as a popular fast-fashion retailer.