From the metaverse to the Indian subcontinent, how luxury companies can explore new horizons is the subject of two Executive Master’s students’ applied business projects presented to faculty and colleagues recently.

As part of their Executive Master’s in Luxury Management and Guest Experience, students develop an applied research project to get a flavor of what it’s like to work at the sharp end of the luxury industry.

These business research projects not only give students the opportunity to immerse themselves in real-world challenges, they can also offer businesses unique and valuable perspectives into their own operations.

Great examples of this were revealed at an online event late last year, when two Executive Master’s students presented their plans for their own research projects to faculty and colleagues. Although coming from very different angles, both projects are investigating opportunities for luxury brands to engage consumers in novel spaces – the metaverse and emerging markets such as India.

As saturation threatens expansion in traditional powerhouses of luxury such as China, the challenge for luxury businesses is to see whether pioneering in new arenas could be the key to securing profitable growth. However, according to both students, their initial research has shown there are issues to be tackled around brand positioning and localization.

Managing the metaverse

The first presentation by Milan-based Federica Procopio, a premium beauty industry insider, explored whether brands can create value in the metaverse. Virtual spaces are increasingly gaining traction, especially among younger generations, so Federica’s project is aimed at understanding whether this online world offers companies opportunities to forge meaningful customer relationships or is just marketing hype.

“Givenchy notably debuted a makeup line on Animal Crossing, which sparked my curiosity on the strategic rationale behind such launches,” she says. “For the luxury beauty industry, the aspirational and emotional aspect is really central to the purchasing experience, but when you go to a digital space, you don’t get any of that. So my question for the research project is why should such companies invest in this channel and what kind of return on investment can they expect?

“Through surveys and interviews with Givenchy and L’Oréal and the metaverse startup Naked, I’m aiming to ascertain whether a venture into the virtual world is worth it for luxury companies and, if so, what the potential challenges and opportunities are.”

Crucially, Federica is comparing generational attitudes, recognizing children and young adults already embrace virtual worlds while older people are often skeptical. As such, she plans to carry out two distinct surveys of around 130 consumers, one looking at the attitudes of young and older adults and the other seeking views of children.

As with any research project, it’s always worth examining the limitations and potential pitfalls that could affect the findings. This helps researchers pitch the results more realistically but also adds credibility to the eventual results.

“With more time, I would love to broaden the scope.”

“I’m aware not all people will complete the survey and those who do may not be particularly active in the industry,” says Federica. “At the moment the responses are going to be coming largely from relatives, friends and colleagues, so the results may not be the same as they would be in a completely random sample. With more time, I would love to broaden the scope.”

Indian promise

Meanwhile, Simon Joseph’s presentation focused on another territory earmarked by luxury companies for potential expansion: India.

With China’s luxury boom reported to be on the wane, attention of the world’s high-end luxury companies has turned to the Indian subcontinent, home to more than 1.4 billion people. Being the fifth largest economy in the world and with projected growth of almost 7% of GDP a year, the country undoubtedly has much potential, so Simon is setting out to investigate whether India could mirror China’s trajectory to become the next goldmine for the personal luxury industry.

“My research is trying to ascertain two things,” he says. “Firstly, whether India can become ‘the new China’ for personal luxury and secondly, what international personal luxury brands would have to do to engage with the country’s high net worth and ultra high net worth individuals.

“The reasons this subject fascinates me, and why I chose to do research on it, were that I’ve seen a lot of literature about India being the next frontier for luxury, I have extensive experience in the country’s FMCG sector with Unilever and KraftHeinz and I’ve read many articles by people such as Dr Ashok Som of ESSEC on India’s luxury potential.

“Finally, I read a piece on Bloomberg about LMVH’s Bernard Arnault setting his sights on India. When someone of that stature is talking about the country as the possible next horizon, you have to take notice.”

Seeking strategic solutions

Simon’s research is exploring growth drivers across China and India such as burgeoning middle classes, swelling urban densities and surging high net worth individual (HNWI) populations.

To gather evidence, Simon is looking for perspectives from Indian HNWIs themselves through an extensive 60-participant survey. Spanning key cities Mumbai, Delhi and Bangalore, the research seeks to understand consumption nuances around local brands versus western houses, retail formats, category entry-points, gifting norms and cultural symbolism.

“While there is a reasonable amount of talk out there that might support the view India could be the next China,” says Simon. “What my research aims to do is provide some tangible evidence of this and offer businesses in the luxury sector some practical recommendations, not least around cultural sensitivities they may need to consider.

“It’s worth noting what I’m not trying to do is say India is likely to replace China as the most prominent market for personal luxury. I think the research will, however, support the view India could be the next frontier for luxury based on the kind of indicators that fueled China’s success.”

Alongside the surveys, Simon is drawing data from a broad range of sources, including Euromonitor, Bain & Company, the Indian Ministry for Economics and a range of papers and articles by prominent Indian academics.

Research reasoning

Following each presentation, Federica and Simon fielded questions from faculty and their Luxury Management and Guest Experience colleagues based in Bulle. These focused mainly on the methodologies and the limitations of their research parameters and gave each presenter the opportunity to clarify their positions.

As well as being an invaluable sense-checking exercise, the post-presentation questioning improved the learning experience for all students because it demonstrated the kind of rigor required when undertaking business research.

What both presentations did demonstrate were common considerations luxury companies would need to take into account around customizing brand approaches, elevating cultural signals and projecting authenticity. While there are clearly opportunities for luxury in new arenas such as India and the metaverse, realizing these will ultimately depend on speaking to consumers in their language and on their terms.

Photo credits

Main image: pcess609/Getty
Mannequin: Uma Shankar Sharma/Getty