are huge expectations woven around the likely permission for FDI in retail
sector in India. But even before that happens, there has been a flurry of
activity on the part of international retailers to set up their shops here. When top French
luxury brand Hermes - best known for their $350 plain white T-shirts and
$10,000 handbags - announced their entry in the Indian luxury market
with a line of fancy saris, it grabbed headlines. However, Hermes move to woo
Indians came as no surprise, for even though the last recessionary phase saw a
downside in the buying sentiment of global luxury brands in the West, India
with its booming economy remained more or less stable.
Around that time top global luxury brands consolidated their position in India and right-sized their businesses while Indian consumers continued splurging on them. In fact, many top brands were lured into the Indian market and why not? According to latest CII-Kearney study, the luxury market in India has shown a robust growth of 20 per cent over the past year and is estimated to be nearly ` 28,500 crores. Luxury products grew by 29 per cent, services 22 per cent and luxury assets rose by 13 per cent.
Interestingly, the growth is taking place even beyond the metros in cities like Pune, Chandigarh, Hyderabad which have a large population with high disposable incomes. Analysts say that by 2020, about 200 stores of Italian luxury brands are likely to come up in India. For example, DLF Retail and Reliance Brands are in talks with LVMH-owned beauty retailer Sephora. LVMH is already on an expansion spree and has launched a $650 million private equity fund called L Capital Asia dedicated to market top consumer brands, lifestyle concepts, beauty and wellness.
Italian brand Salvatore Ferragamo is very optimistic about the opportunities in India. The brand currently has four stores and is all set to expand with another six stores in the next three to five years. Jimmy Choo and Altagamma among others are looking at spreading wings in India. Angela Ahrendts, CEO of Burberry says her company is well placed to capitalise on India's growing luxe market and plans to move as fast as they can. Burberry has seven stores in India, which according to Ahrendts is currently the fastest growing luxury market in the world.
Similarly, Louis Vuitton is bringing in three premium brands which include beauty retail chain Sephora, Singapore fashion company Sincere and Hong Kong-listed Emperor Watch and Jewellery. Sephora has over 250 brands under its umbrella, Dior, Aquolina, Diesel, Clarins, D&G, Evian and Canali, and is planning to open around 50 stores in the next couple of years. Louis Vuitton is also investing $25 million in its brand Charles and Keith in India by opening 40 to 50 new stores. The company is strengthening its presence in India and will spend over $25 million in expanding C&K in Chennai, Kolkata, Bangalore, Lucknow and Ludhiana. Swedish fashion retailer Hennes & Mauritz, American high street casual wear brand Brooks Brothers and Italian luxury apparel player Emilo Pucci are likely to start operations in India soon. Luxury watchmaker Cartier recently announced the expansion of its distribution network in India. No wonder, Sanjay Kapoor, MD, Genesis Luxury feels this is just a beginning where the big boom is waiting to happen. "Many other brands are also planning to increase their footsteps by opening more stores within metros and looking at retail spaces beyond the metros. Most of the brands with us are also keen on expanding." Genesis Luxury operates stores on behalf of Canali, Paul Smith, Cavalli, Bottega and Jimmy Choo. It has also started a joint venture with Burberry.
Supporting the bright future of Indian luxury apparel market, at the recent Confederation of Indian Industry (CII) and The Economic Times-organised 'Dialogue on Luxury, Making India a Source and Destination of Luxury' event, Jimmy Choo's CEO Joshua Shulman said that "luxury will thrive in India, despite India and also because of India!"
A global affluence study by research firm TNS states that India has 3 million affluent households, defined as those with more than ` 50 lakh of investable surplus Surely, with government support in terms opening up FDI in single brand retail, improved infrastructure, there should be no looking back for the Indian luxury market.
Originally Published in The Stitch Times, November-2011