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Luxury brands step up India expansion

28 Sep 2011

Luxury brands are finding increasing presence in major cities

across India such as Delhi, Mumbai and Bangalore. They also see a huge potential in cities like Pune, Chandigarh, Kolkata, Hyderabad which have a large population with high disposable incomes. By 2020, about 200 stores of Italian luxury brands are likely to come up in India. Some luxury players are already chalking out growth plans in India. For example, DLF Retail and Reliance Brands are in talks with LVMH-owned beauty retailer Sephora. LVMH is already on an expansion spree and has launched a $650 million private equity fund called L Capital Asia dedicated to markets that would primarily deal in consumer brands, lifestyle concepts, beauty and wellness.

Further Louis Vuitton is bringing three premium brands to India, including beauty retail chain Sephora, Singapore fashion company Sincere and Hong Kong-listed Emperor Watch and Jewellery. Sephora has over 250 brands under its umbrella, including Dior, Aquolina, Diesel, Clarins, D&G, Evian and Canali, and is planning to open around 50 stores of Sephora in the next couple of years. Louis Vuitton is also investing $25 million in its brand Charles and Keith in India by opening 40 to 50 new stores. The company is strengthening its presence in India and will spend over $25 million in expanding C&K in Chennai, Kolkata, Bangalore, Lucknow and Ludhiana. Apart from this, Swedish fashion retailer Hennes & Mauritz, American high street casual wear brand Brooks Brothers and Italian luxury apparel player Emilo Pucci are likely to start operations in India soon.

Most international brands seek Indian markets for two reasons. There are numerous languages, cultures, and festivals in India which results in higher consumer spending. India is a country with a fast growing population and a growing number of families with dual incomes. With a drastic increase in disposable incomes it makes business sense to expand in this market. With the fastest growing high net worth individual population, and with an anticipated increase in the level of population in the coming years, India is poised to transform into a major hub for international luxury brands in the next three to four years.