“I absolutely love what I do,” she says. "My work entails understanding why people do the things they do and it is something that fascinates me."
After a stint in India where Chadha worked with a variety of advertising agencies, she moved to Hong Kong in 1997 and joined Bates Worldwide.
At Bates Worldwide, she focused on strategic planning, which involved working out a brand’s strategy—identifying various problems that a brand faces, understanding the consumer’s perspective, and guiding the creative team to work in synergy with consumer interests. During this time, Chadha began to notice certain trends that would greatly influence her professional path.
“During the initial years of working in Hong Kong, there were things I saw in the office that I just couldn’t understand. My secretary had the mandatory Gucci bag and account managers would come back from lunch carrying Prada shopping bags. I was fascinated [by their shopping sprees, especially given] their salary level.”
“Over the years, I worked on luxury projects and got deeper into the subject and decided to write a book on it.” In 2007, she published, The Cult of the Luxury Brand: Inside Asia's Love Affair with Luxury. The book deals with how the emerging reality of economic success in Asia is influencing spending habits and cultures.
“Today Asian consumers account for half the world’s US$ 80 billion luxury brand industry.”
As Chadha points out, “From youngsters in Seoul surviving on cup noodles to own a [coveted] pair of Ferragamo shoes to young women in Taipei traveling by crowded buses to save enough for a Burberry bag, Asian consumers from all walks of life are ardently in love with luxury goods.”
“In the past, Asian culture determined one’s position by birth, clan, or family. For example, the caste system in India or the Samurai feudal system in Japan, were ways to define one’s place in society. Economic development and social change in Asia have slowly dismantled these [entrenched] systems and a luxury brand defined class order [is sweeping the region]. Luxury items are becoming indicators of status and help mark your place in society.”
“In today’s Asia you are what you wear.”
And Chadha should know. She has spent almost a lifetime studying, evaluating, and working in the branding industry in Asia. It all began innocently enough, with an interest in numbers. Chadha graduated from St. Stephen's College in New Dehli, India, with a BA in Math. From there she decided to pursue an MBA at the Indian Institute of Management at Ahmedabad, where her branding career began in 1981, when she was recruited by JWT, Mumbai. Back then, Asian economies were not the economic engines they are today, and most Asian consumers didn't have the craving for style and status-driven items that they currently display.
“Now, the key criterion is how much money do you have? New money likes to display itself, and these luxury brands are like a symbolic language and [help communicate] that you are from a family of decent means.”
That’s why the "luxe" industry’s adoption of “logo-fication” has been a successful strategy in spreading the luxury brand mania across Asia. “The 'LV' monogram, Gucci 'G' and other visual identifiers like the Mont Blanc white symbol or the Burberry checks are clearly identifiable and are what most Asian consumers are after.” Several luxury brands have capitalized on this opportunity and introduced signature logo collections to woo the Asian consumer, says Chadha.
In 2000, Chadha set up her own consulting business, Chadha Strategy Consulting, in Hong Kong. Now independent and with 26 years of strategic planning experience in her history, she capitalized on the vast experiences she had accumulated working in ten different countries with leading agencies like Ogilvy & Mather, Grey Advertising, HSBC, and American Express.
Now, as a seasoned branding industry expert, Chadha utilizes her five-stage luxury model that illustrates how and why the different Asian countries (Japan, China, India, Taiwan, South Korea, Hong Kong, Singapore) are at different stages of luxury. “Subjugation” is the first stage and is characterized by authoritarian rule, poverty, and deprivation—and all Asian countries have experienced it.”
“Stage two is the start of money stage. Here an elite segment is stepping in and shopping. India is probably in this stage and marketers often find the Indian customer very sophisticated, as these consumers are well versed with luxury brands while shopping for them on their travels abroad.”
“China comes under stage three or the show off stage. Wealth has come to select segments of society and these people are rushing to acquire [luxury brands] as symbols of wealth. It’s not about aesthetics, style or fashion, but about display of money and status.”
“I would say Hong Kong is in stage four or the fit in stage where consumers buy luxury goods to fit in with their peers. Japan and partly Singapore have entered the last stage of the model and luxury brands are a ‘way of life.’ No wonder, the retail environment is very sophisticated in these countries—both in terms of size of stores and the range of products available."
“These are just broad classifications and often even within a country different sections of society are at different sections of 'luxe' consumption."
This model is a useful tool for marketers of luxury brands who wish to understand the evolving trend in these countries. “For instance, with the Indian economy growing, the market is set to enter stage three, [creating a demand for] high quality retail infrastructure which is [currently limited and scattered]." says Chadha.
“Despite Asia being the largest market for luxury goods, compared to the rest of the world, there is only 1% penetration of luxury brands in China, compared to the 25% penetration in Japan. With continuous economic growth, the market in each of these countries is only set to become bigger.”
As Chadha explains, the future will see the "super-elitization of luxury" where the wealthy will demand ways of distinguishing themselves from the masses. “Loud logos [will be replaced by] exquisite hand crafted pieces made in limited numbers—unprecedented levels of customization and exotic materials [will be future demand drivers]."
With technology playing such an integral role in our lives today, the marriage of luxury brands and technology is also inevitable, says Chadha. Some brands like the Acer’s Ferrari notebook computer, or Dolce & Gabbana’s limited edition Motorola RAZR, have already experimented with this concept. It will be interesting to witness how luxury brands will transition their brand appeal to technology applications, which already demand certain utility attributes to be appealing.
But if the past is any indicator, as Asia's economies continue to develop, so will Chadha's career.
Radha Chadha can be reached via her website - www.chadha-strategy.com