India turning into magnet for foreign luxury brands, Retail News, ET Retail

More than a dozen luxury consumer goods brands are entering the country ahead of the festive season, as they look to attract consumers in a market riding on the growing affluence of Indians with higher incomes, spurring greater discretionary spending even in small towns. The trend is being driven by increased exposure to global trends, younger people buying luxury products, and a post-pandemic boom, all of which are stoking interest from western luxury brands, executives said.

The surge of new and upcoming launches includes Swiss luxury chocolate maker Laderach, which set up its first boutique at upscale mall DLF Emporio in New Delhi last week. French luxury retailer Galeries Lafayette is entering India in partnership with the Aditya Birla Group. Spanish luxury fashion house Balenciaga SA is planning stores with Reliance Brands. Swiss luxury multi-brand watch and jewellery boutique TimeVallee and Dutch haircare salon services brand Keune among others are also set to make their debut. As the Chinese economic engine falters, luxury brands are betting that steadier growth in India will lead to greater demand for their products.

“There is absolutely no question about the potential of the Indian market with upscale and luxurious brand experiences. We are very confident of the Indian market, the big cities and consumers here,” said Elias Laderach, executive board member and chief creative officer of Laderach, the largest chocolate retailer in Switzerland.

‘Luxury market inflation proof’
The family-owned luxury chocolate maker, which has entered India in partnership with DS Group, plans to set up five-seven stores in India over two years besides selling through their own ecommerce platform.

Experts said a K-shaped recovery is fuelling the influx of global luxury brands. India’s luxury market is expected to grow 3.5 times the current size to reach $200 billion by 2030, according to a report by global consulting firm Bain & Co. While the entry-level product categories has been hit by inflation and other factors, luxury products appear to be booming.

“The luxury market is inflation proof – consumers in this segment don’t get impacted by inflationary trends,” said Santosh Desai, social commentator and columnist. “Even regular basic needs categories are seeing packs which are priced four-five times higher. These packs have no relationship with the base segment. Such products obviously cater to a small market but this set of consumers is rising relentlessly and these consumers have a desire to spend across all categories. This is being referred to as a K-shaped recovery.”

Aditya Birla Fashion Retail (ABFRL), which has partnered with French luxury retailer Galeries Lafayette for setting up stores in India to sell over 200 luxury brands such as Armani, Christian Dior and Prada, called the partnership “a coming-of-age moment for Indian luxury”.

ABFRL managing director Ashish Dikshit said, “India is now home to a generation of young and affluent consumers with global exposure. This is visible in the boom and dynamism of the luxury market. The partnership with Galeries Lafayette is an endorsement of India as a future engine of growth for luxury brands.”

Reliance Brands, which has ambitious plans in the luxury segment, is rapidly scaling up its existing partnerships with global brands Valentino and Tiffany in the run-up to the festive season, executives aware of the plans said.

“Global brands are now tailoring their offers and marketing campaigns to India,” said Anurag Mathur, partner Bain & Co. “Louis Vuitton launched a Rani Pink line, Dior held a fall show in Mumbai and Bvlgari introduced the mangalsutra. Additionally, the entry of new global brands like Valentino, Balenciaga and Galeries Lafayette… and several other Swiss and Italian brands are in conversation to enter India.”

A Credit Suisse Global Wealth Report said that the number of millionaires in India was estimated to double from 796,000 in 2021 to 1.6 million in 2026.

  • Published On Aug 31, 2023 at 08:17 AM IST

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