More luxury brands make a beeline for India on growing affluence
Luxury brands are chasing growth in India, as well-heeled shoppers and local partners with deep pockets throw up opportunities in the market.
On Thursday, Aditya Birla Fashion Retail (ABFRL) announced a partnership with Galeries Lafayette to open the French luxury retailer’s high-end, large-format shopping stores in India. The flagship stores in Mumbai and Delhi will house more than 200 luxury brands.
Present in Paris, Shanghai, Nice and Luxembourg, Galeries Lafayette retails an assortment of high-end luxury designers, including Armani, Balenciaga, Burberry, Bulgari, Calvin Klein, Céline, Christian Dior, Louis Vuitton and Prada.
Recently, Reliance Brands Ltd signed a deal to bring the luxury couture brand Balenciaga to India. And last month, online beauty and fashion marketplace Nykaa announced the launch of Revolve, an international premium lifestyle brand that sells apparel, footwear and accessories. The move was aimed at expanding the retailer’s global brand portfolio in India.
Additionally, to underscore the growing importance of India, ultra-premium brands already present in the market are launching India-specific collections to woo local shoppers. Earlier this month, Louis Vuitton launched a limited edition collection of footwear priced at ₹75,000-1.20 lakh to target the booming wedding season.
Companies said the Indian luxury consumer is coming of age, and higher disposable incomes at the upper end of the pyramid are stoking domestic demand. Others said the presence of such stores and the availability of brands would also be a catalyst in expanding the market.
To be sure, luxury brands entered the Indian market in the early 2000s—with companies setting up mono-brand st
However, the consumption landscape has since changed—a general uptick in the incomes of white-collared workers, rising entrepreneurship and the growth of social media are driving demand for branded goods.ores. However, the market evolved slowly, with several brands also exiting the country, citing a lack of demand.
Announcing the partnership with French luxury department store chain Galeries Lafayette on Thursday, ABFRL managing director Ashish Dikshit said the partnership is a “coming-of-the-age” moment for Indian luxury.
Harminder Sahni, managing director at consulting firm Wazir Advisors, said the entry of such high-end retail is a strong validation that the luxury market in India is at a take-off point. “For the last 15 years, it’s been building slowly and steadily, now it has reached a point where the large retail groups like ABFRL and Reliance Retail are recognizing that the market may be ready,” said Sahni, who consults on retail brands.
Sahni said the moves by homegrown conglomerates to expand their portfolios to include premium brands are “forward-looking” investments that will bear results in the future.
Mint had earlier reported that since 2019, companies such as ABFRL and Reliance Retail have announced associations with or invested in close to 20 brands in the Indian market, the majority of them in the luxury couture segment.
ABFRL has invested in luxury designer Tarun Tahiliani; the company also acquired a 51% stake in Indian luxury couture designer label Sabyasachi, owned by Sabyasachi Mukherjee. Reliance Brands Ltd is associated with brands such as Burberry, Clarks, Coach, Kate Spade New York, Manish Malhotra and Michael Kors, among others in India.
India’s fashion market is set to touch ₹5.7-5.8 trillion by 2024, driven by premiumization, greater penetration of e-commerce and a higher focus on private labels as well as entry of international brands, according to 2021 estimates by Boston Consulting Group.
Several retailers also point to a wide gap in the availability of premium brands. Rahul Prasad, managing partner at boutique M&A and advisory firm Pike Preston Partners (Asia) Ltd, said a visible increase in the number of Indian shoppers sighted at luxury stores overseas is a clear indicator of underlying demand.
“When you go to Selfridges or Galeries Lafayette, the Indian consumer is very, very visible. The driver, we feel, is no longer post-pandemic ‘pent-up demand’. It’s just consumerism,” he said. Luxury experts said Indians are among the top 5 shoppers at The Galeries Lafayette’s Boulevard Haussmann store in Paris.
However, the pandemic and the ensuing ban on travel have brought some luxury shoppers back home. A top executive at a company engaged in bringing international brands to India said Indians used to buy luxury abroad for specific brands, partly driven by a lack of professional management and poor pricing in India.
“These were big turn-offs for Indian customers,” he said, declining to be named. “They thought the world outside was cheaper, but during covid, they realized things are not so bad here. While India is still more expensive, thanks to the duties—it is not prohibitively so,” he added.
In an earlier interview, Adwaita Nayar, co-founder of Nykaa, and CEO of Nykaa Fashion, said the market for premium fashion wear in India is largely under-served.
“It is quite unfortunate that India did not have the right brands for so long, and people had to travel to get these products. So it’s all part of this shift of bringing the right product to the Indian consumer,” Nayar said in an interview in September.
