India is attracting more and more luxury brands that decide to set up shop or establish factories there. Analysis of this booming market.
Louis Vuitton was the first international company to enter the Indian market in 2002. But today, global players in this segment are increasingly interested. Considered one of the fastest growing markets for luxury goods, it is expected to reach $8.5 billion this year, an increase of $2.5 billion over 2021, according to Euromonitor International.
The Indian luxury market is expected to grow by 10% over the next 5 years. It is projected to exceed $200 billion by 2030. Already in the last 2 years, only the Indian luxury market has performed better than expected. During the pandemic period, India experienced slow and sustainable growth. Indians started to spend more at home, and the richest among them found themselves with a surplus to spend on fashion items. Moreover, according to a United Nations report released in July, India is expected to become the most populous country in the world by 2023, surpassing China.
But that’s not all. India also has the world’s largest diaspora, according to a 2020 UN report, with 18 million people from the country living abroad. The United States, the United Arab Emirates, the United Kingdom and Canada are among the countries with the largest Indian populations. It is more difficult to track luxury spending by this group, but it significantly impacts brand and retailer strategies. The United Arab Emirates, home to more than 3.5 million Indians, is thus a prime destination for luxury brands to open stores.
“Indians living in this region are most definitely luxury shoppers,” comments Samara Punjabi, CEO of Times Square LLC, which distributes international brands such as Manolo Blahnik and Furla in the region. “They are willing to spend on unique, limited and sought-after collections. Indians are critical to our business.”
This year, Galeries Lafayette announced that it will set up department stores in Mumbai and Delhi, which will bring together more than 200 luxury and designer brands under one roof. The 8 000-square-meter Mumbai store is expected to open by 2024 and the 5 500-square-meter Delhi store by 2025.
Balenciaga also said it wanted to expand into India last August, alongside its new partner Reliance Brands Limited (RBI). The House thus joins the group’s portfolio which already includes Armani, Burberry, Coach and Jimmy Choo, present in over 12,000 stores in India. Reliance Brands Limited, a subsidiary of Reliance Industries Limited, will be the sole distributor of Balenciaga in the country. “This is the most opportune time to introduce the brand” because local customers “have matured and use fashion as a form of creative expression of their individuality,” explained Darshan Mehta, president and CEO of RBL.
During 2022, the brands Lancôme (L’Oréal group), McLaren Automotive and Valentino have also decided to set foot in India. A future-oriented approach given the consumption forecasts for the luxury market in the country.
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