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Will global brands buy the India story…
02 Apr '08
3 min read
Yet there seems no news of any big global brands launches. A host of global brands are talking about entering the Indian market, but are not firming their plans. A few among them like Frette, a luxury home furnishing company. Missoini, Sportswear Company, Canali, Tag Heuer mobile phones and a few others are planning their India strategy.
It is no surprise that the renowned designer Armani has styled a Sherwani collection. But the moot question is that Armani still does not have a store even in Mumbai while he is planning stores in second tier cities across China.
Gucci, the highly cherished brand of the neo-rich has just got 2 stores across India, while it opens 1 store in China every six weeks.
But for every Gucci, there are innumerable numbers of brands which have not penetrated the Indian markets. The reasons are not far to seek. The main reason being excessive high duty levied on luxury brands, a fall out of the socialist era.
Foreign-exchange controls and tariff rates averaging well over 120 percent (and rising as high as 400 percent) characterized trade policy a few years back.
The other issue is of direct foreign investment beyond 51 percent in the retail sector. While speaking at the Mint Hindustan Times Luxury Conference 2008, the Commerce Minister Mr Kamal Nath has promised to look at the 51 percent limit and also the reduction in import tariffs on luxury goods favourably.
Again sales across India account for a miniscule percentage of their global sales for the global brands, while China accounts for nearly 15 percent of all sales for European luxury brands.
Most of the international lifestyle brands have planned an India strategy, but seem to be adopting a wait & watch attitude & at the same time a cautious approach.
The Nielsen survey may prove to be an eye opener for the global brands & expect to be bombarded with high profile brand launches in India in the near future.
It is no surprise that the renowned designer Armani has styled a Sherwani collection. But the moot question is that Armani still does not have a store even in Mumbai while he is planning stores in second tier cities across China.
Gucci, the highly cherished brand of the neo-rich has just got 2 stores across India, while it opens 1 store in China every six weeks.
But for every Gucci, there are innumerable numbers of brands which have not penetrated the Indian markets. The reasons are not far to seek. The main reason being excessive high duty levied on luxury brands, a fall out of the socialist era.
Foreign-exchange controls and tariff rates averaging well over 120 percent (and rising as high as 400 percent) characterized trade policy a few years back.
The other issue is of direct foreign investment beyond 51 percent in the retail sector. While speaking at the Mint Hindustan Times Luxury Conference 2008, the Commerce Minister Mr Kamal Nath has promised to look at the 51 percent limit and also the reduction in import tariffs on luxury goods favourably.
Again sales across India account for a miniscule percentage of their global sales for the global brands, while China accounts for nearly 15 percent of all sales for European luxury brands.
Most of the international lifestyle brands have planned an India strategy, but seem to be adopting a wait & watch attitude & at the same time a cautious approach.
The Nielsen survey may prove to be an eye opener for the global brands & expect to be bombarded with high profile brand launches in India in the near future.
fibre2fashion News Desk - India
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