India, a safe bet for global luxury brands

The Indian luxury market is booming, a fact that is reiterated by the presence and increasing entry of luxury brands. Almost every other day, a new luxury product makes its entry into the market. Indians are increasingly becoming conscious of brands and a large number prefer luxury products over regular stuff. Today, it is not uncommon to find Jimmy Choo, Louis Vuitton, Burberry, Tom Ford, Dior and a host of others in upscale malls and on high street in the metros.

Not just that many prefer to take the online route so as to test the waters before launching their own brick-and-mortar store. Recently, Jabong partnered with Luxury Quotient to tap the online luxury market. Luxury Quotient is a global distributor of luxury goods and has around 20 international luxury brands under its folds.

Challenges many, but not tough to overcome

The preferences of Indian consumers have always been different from their western counterparts, considering the culture and religions. Prices ​have been a ​sensitive factor too. It’s an open secret that top-end luxury brands, such as Cavalli, Armani and Versace, struggled in India initially. Versace and Jimmy Choo, in fact, exited before re-entering, and Louis Vuitton had to close its Chennai outlet. Also, poor infrastructure facilities and lack of high-end streets/malls coupled with high import duties have made it tough for luxury brands to operate in India.

Learning the trick slowly

After the initial hiccups, luxury labels have learnt the trick of doing business in India. They have understood the need to have a local partner who understands the market well. For example, Christian Louboutin collaborated with Indian fashion designer Sabyasachi Mukherjee for Amazon India Couture. Similarly, companies such as DLF, Reliance Industries and Phoenix Mills have lined up a host of projects for high-end malls in Delhi, Mumbai, Chennai and Bengaluru. Global luxury brands such as Tory Burch or 7 For All Mankind are now available in India at a mouse click. From large luxury retailers like Saks Fifth Avenue, Macy’s, Harrod’s and Neiman Marcus, who have already started shipments to the country, online shopping platforms are launching several luxury brands for the fashion-savvy consumers. Austrian jewellery brand Swarovski and American clothing brand Brooks Brothers have already begun offering their high-end products online. Premium products retailer Elitify.com is set to bring brands like Paul Smith, Furla, Emporio Armani and Armani Exchange, by partnering with Genesis Luxury, on its platform.

The luxury market in India is growing rapidly at 20 per cent per annum on an average. Presently, it is about 20 billion dollars (Rs 1.3 lakh crore) and is expected to grow by 2020 to 50 billion dollars (Rs 3.3 lakh crore). But all this is subject to India growing at 9-10 per cent.