Early entrants likely to dominate luxury retail

After Indian government allowed 100 per cent FDI in

single-brand retail, there were speculations over which global luxury brand would enter the market first, given the prospects of the luxury segment. But contrary to the situation, global players are still studying the blueprint of the FDI regulation before making a formal entry. And 30 per cent mandatory sourcing from SMEs is what has been bothering them the most. In the current circumstances, existing Indian luxury apparel and accessories brands are ruling the scene, which are controlled by a handful of entrepreneurs and business houses in the country. Companies such as Genesis Luxury Fashion, TSG International Marketing, Reliance Industries through its luxury retail arm Reliance Brands, Blues Clothing Company and the Bird Group are cashing in on the opportunity, while international labels are eyeing to enter the India market, they are choosing a domestic partner to set up a shop instead of going solo.

These Indian companies enjoy a hold over the luxury market space in India. Luxury apparel and accessories retail is a $270 million market in India growing at 30 per cent per annum, according to the Confederation of Indian Industry and consulting firm AT Kearney’s India Luxury Review 2011 report. And the early movers are making most of the opportunity.

Genesis Luxury, for instance, started with one Canali store in late 2007 in Hyderabad and today, it has more than 35 stores in five cities with a portfolio of brands in addition to Canali that includes Bottega Veneta, Burberry, Etro, Paul Smith, Jimmy Choo and Tumi. TSG International, the luxury retail company started by sisters Charu Sachdev and Priya Sachdev Chatwal of the Sachdeva Group, runs the high-end Kitsch multi-brand stores and is the exclusive licensee for Alexander McQueen, Diane Von Furstenberg, Halston Heritage, Herve Leger, Alice + Olivia, Lanvin, Stella McCartney, YSL, Celine, McQ and Catherine in India. Reliance Brands, which opened its first Diesel store in April 2010, has also been on a rapid expansion drive. It now owns 60 stores across brands such as Ermenegildo Zegna, Paul and Shark, and Steve Madden. Earlier this year, Reliance Brands added LVMH brand Thomas Pink’s shirt collection to its portfolio. The Bird Group, which introduced the German shirt brand van Laack in December, represents Porsche Design in India in addition to luxury cars and yachts.