 "How is India's luxury market turning into a magnet for foreign brands?")
More than a dozen luxury consumer goods brands are entering the country ahead of the festive season, hoping to attract consumers in a market fueled by the growing affluence of Indians with higher incomes, spurring greater discretionary spending even in small towns, reported The Economic Times (ET).
The trend is being driven by growing exposure to global trends, younger people buying luxury products, and a post- Covid-19 pandemic boom, all of which are fanning interest from western luxury brands, said executives.
Luxury brands 'very confident' of Indian market
Among the recent launches is Swiss luxury chocolate maker Laderach, which set up its first boutique at upscale mall DLF Emporio in New Delhi last week.
French luxury retailer Galeries Lafayette is also set to enter India in partnership with the Aditya Birla Group. Spanish luxury fashion house Balenciaga SA is planning stores with Reliance Brands. Swiss luxury multi-brand watch and jewellery boutique TimeVallee and Dutch haircare salon services brand Keune, among others, are also set to debut.
As China's economic engine falters, luxury manufacturers are hoping that India's steady growth will lead to increased demand for their products.
More From This Section
“There is absolutely no question about the potential of the Indian market with upscale and luxurious brand experiences. We are very confident of the Indian market, the big cities and consumers here,” said Elias Laderach, executive board member and chief creative officer of Laderach, the largest chocolate retailer in Switzerland.
The family-owned luxury chocolate maker, which has entered India in partnership with DS Group, intends to open five seven outlets in India over the next two years in addition to selling through their own e-commerce platform.
The influx of global luxury brands
India’s luxury market is expected to grow 3.5 times the current size to reach $85 billion-$90 billion by 2030, according to a report by global consulting firm Bain & Co. While the entry-level product categories have been impacted by inflation and other factors, luxury products appear to be thriving.
“The luxury market is inflation proof. Consumers in this segment don’t get impacted by inflationary trends,” said Santosh Desai, social commentator and columnist.
“Even regular basic needs categories are seeing packs which are priced four-five times higher. These packs have no relationship with the base segment. Such products obviously cater to a small market but this set of consumers is rising relentlessly and these consumers have a desire to spend across all categories. This is being referred to as a K-shaped recovery,” he was quoted as saying by ET.
Luxury’s coming-of-age moment in India
Aditya Birla Fashion Retail (ABFRL), which has partnered with French luxury retailer Galeries Lafayette to set up stores in India to sell over 200 luxury brands such as Armani, Christian Dior and Prada, dubbed the partnership “a coming-of-age moment for Indian luxury”.
Reliance Brands, which has ambitious plans in the luxury segment, is rapidly scaling up its existing partnerships with global brands Valentino and Tiffany in the run-up to the festive season, executives aware of the matter said.
“Global brands are now tailoring their offers and marketing campaigns to India,” said Anurag Mathur, partner Bain & Co, adding, “Louis Vuitton launched a Rani Pink line, Dior held a fall show in Mumbai and Bvlgari introduced the mangalsutra. Additionally, the entry of new global brands like Valentino, Balenciaga and Galeries Lafayette… and several other Swiss and Italian brands are in conversation to enter India.”
Luxury spirits find more takers in India
A Credit Suisse Global Wealth Report said that the number of millionaires in India was estimated to double from 796,000 in 2021 to 1.6 million in 2026.
Dutch luxury hair cosmetics company Keune entered India last week in a distribution and marketing partnership with Indian beauty company Maison D' Auraine. “India is a vibrant market. We see tremendous growth. After the Covid-19 pandemic, more and more people want to spend money on grooming," said chief executive Eelco Keune.
The brand will be focused on 25,000 or more premium salons across India, he said.
Mathur of Bain cited the expansion of Michael Kors to seven stores, adding that AJIO Luxe, Tata CliQ and Collective have broadened their offerings with brands such as Self Portrait and Cult Gaia.
With the opening of retailers such as Elle Decor and Pottery Barn in India, Mathur claims that new categories, such as home decor, are sprouting.
Tata CLiQ Luxury, which partnered with Swiss luxury multi-brand watch and jewellery store TimeVallee in March this year to launch its digital boutique in India, is also scaling up to sell timepieces made by Cartier, IWC Schaffhausen, Jaeger-LeCoultre, Panerai, Piaget and Roger Dubuis.