Is India The Next Big Player in Luxury Retail?-------
Prada is reported to be in talks for an India entry. Alexander McQueen, Dolce & Gabbana, and Stella McCartney are exploring real estate for stand-alone stores. After opening his first boutique in New Delhi last year, Christian Louboutin is readying himself for a Mumbai launch. This year marks the tenth anniversary of Louis Vuitton’s presence in India—it was the first luxury brand to set foot in the country. Is India finally reawakening to luxury? Historically, it’s a country familiar with all things luxe. After all, in 1925, India’s Sir Bhupinder Singh, the Maharaja of Patiala, granted Cartier its single largest commission: the remodeling of his crown jewels, a collection that included an exquisite 234.69-carat De Beers diamond. Vuitton’s gilded links with India go back well over a century, when the Maharajas of Jammu and Kashmir, Bikaner and Baroda, ordered customized trunks from the company.
Then came freedom. For almost forty-four years after Independence, socialist India snapped all ties with luxury. It’s only in the last decade that the romance has rekindled. And it has to do with math. With a population surpassing 1.22 billion, and 81 million households falling into the upper middle class and high-income bracket, India is a serious market for luxury players. In fact, statistics show that India is one of the fastest-growing and largest luxury markets, with sales expected to touch $15 billion by 2015—nearly double what they are today. In November last year, Gucci opened its fifth and largest India store, spanning 4,220 square feet across two floors in Gurgaon, Delhi’s satellite city. Patrizio di Marco, president and CEO, noted, “The flagship store underscores Gucci’s commitment to India. This is our fifth store in this unique country, where we have been operating directly since the end of 2009, and it is a testament to the importance that we are placing on this fast-growing and competitive market.”
But Kalyani Chawla, vice president of marketing and communications at Christian Dior, insists India is taking baby steps. And she is right. The Western notion of luxury hit Indian shores only ten years ago. It’s still a country of salwar kameezes and saris. But the Indian buyer has grown interested in fashion, investing small but precious sums in brands. “Dior has seen a steady and encouraging growth. As is the case globally with most brands, accessories are doing very well [and] clothing is picking up,” she says, noting that this is partly due to the fact that Western wear has finally slipped into a bride’s wedding trousseau. And for Indians, marriage is the occasion for which discerning buyers splurge. Dior launched in 2006, and has three stores across the country.
“You pay for what you get,” says Jamshed Variava, the head of a private-equity firm in Mumbai, and a self-professed lover of all things opulent. “Today, Indians have enormous spending power and desire to shop for luxury brands. We are not stuck in a small pond any longer. We have a new mall or luxury store, selling everything from Harry Winston watches to Tom Ford and Zegna, coming up at every ten steps,” he adds.
“The media plays a significant part in introducing brands to readers by regularly allotting space, even if on page 3, where Indian film stars are featured,” says Chawla. And the recent gush of international fashion magazines has brought luxury closer to home. Despite the inauguration of Indian editions of Elle, in 1996, and L’Officiel, in 2002, it was the glitzy 2007 launch of fashion bible Vogue India that really got the magazine industry buzzing. It was quickly followed by Harper’s Bazaar and Grazia. Considering eight out of twelve magazine covers feature A-list actors brandishing luxury labels, one must acknowledge that Bollywood is India’s big game changer. “The stars don’t want to wear saris on the red carpet. They want to wear a Dior gown,” claims Chawla. The February issue of Vogue India presented a seductive picture of A-lister Kareena Kapoor Khan floating in a black tulle Dior gown with a Philip Treacy hat.
Although China has been hailed as the force du jour by the luxury industry, India is catching up. “I am a complete optimist on the India growth story. The luxury industry is growing at 25 percent, and is the next destination for brands, after China, which is now showing signs of fatigue,” argues Sanjay Kapoor, the managing director of Genesis Luxury, which holds Indian franchising and distribution rights for Burberry, Paul Smith, Bottega Veneta, Canali, Jimmy Choo, and Etro.
For Indians, luxury brands are still a case of curiosity, not conspicuous consumption, says India’s leading trousseau designer, Sabyasachi Mukherjee. “Indians aren’t blinded by luxury. But thanks to its population, luxury brands will enjoy the width of sales across India, if not depth,” points out Mukherjee. With his bespoke wedding lehengas priced between $3,690 and $22,141, he knows a little something about the high-end fashion market. But he needn’t worry about Western luxury brands infringing on his niche. Rather, it’s the Indian designers dabbling exclusively in Western wear who must watch out. “It’s a red signal [when local designers] can’t cut an Indian outfit. Forget fighting luxury brands, they have a bigger enemy to battle—high-street brands like Zara that have massive ad budgets and sell a white shirt for $28, half the price of what an Indian designer would peg it at.”