Looking back, looking forward

The high-end Indian consumer has never had it better. If you thought 2007 was the year of luxury brand launches, Ruchika Mehta says things are set to get bigger and better in 2008

Pierre Cardin may have kick-started the entry of Western luxury brands in India nearly a decade ago, but no one could have predicted the potential the country holds for luxury goods and services today. The new darling of the luxury industry, India is at the threshold of a veritable 'luxeplosion' with 2007 becoming synonymous with the year of luxury brand launches.

If 2006 was the year of the (proverbial) bottom of the pyramid, 2007 was all about the realisation of opportunity at its summit. Some evidence of that legitimising of self-indulgence came in the form of ten luxury brands (no less) like Fendi, Escada, Alfred Dunhill, Gucci, Ermenegildo Zegna, Bruno Magli, Jimmy Choo and Bottega Veneta marking their entry this year. Italian super luxury sports car maker, Automobili Lamborghini, launched two models of the car, while Rolls Royce arrived at a Mumbai mall and ‘officially’ sold 10 Phantoms.

However, 2008 is the year to watch out for, as things will get bigger and better for the Indian luxury consumer. Brands like Hermès, Just Cavalli, Emporio Armani, Dolce & Gabbana, Jean-Paul Gaultier, Alberta Ferretti, Tod’s and Tiffany, among many others, are waiting in the wings.



It is no longer inconceivable to spot a Bentley Continental GT zipping down Mumbai’s Marine Drive, or fashion forward women walking out of salons in Cavalli jeans and Hermès handbags. According to a recent study, there are over a million luxury consumers in India, but this is just the tip of the iceberg. This number is only a fraction of eight million plus consumers who have high disposable incomes but are unfamiliar with luxury brands. The growth rate of the Indian luxury segment is 14.6 per cent, and the target audience is 22-55 year olds. It is currently worth US$ 444 million (or Rs 2,400 crore according to KSA Technopak’s 2006 India Luxury Trends report) and is set to expand with a new firm to facilitate process by bringing together buyers and manufacturers.

But shopping for luxury brands is an experience in itself, and not merely buying goods. Until this year, appropriate real estate, space and ambience were a sore point with most Western luxury brands. Five star hotels were the only, and necessarily limited, option. Developers soon saw the potential in this segment, and the country’s first luxury mall, The Galleria, currently houses Gucci, Bottega Veneta and Jimmy Choo at its swanky Nariman Point address in Mumbai.

Delhi too is set to get its very own luxury shopping destination with India’s largest realtor, DLF, launching Emporio early next year. Emporio will be India’s answer to London’s Bond Street. Four floors of only high-end luxury brands will lend another dimension to the Indian luxury retail market.
No doubt, there’s a lot for the aspirational Indian to look out for. After all, the future looks nothing short of luxurious for the conspicuous consumer!

Ruchika Mehta is editor Hello! and Grazia. Views expressed in this article are her own

This article is part of Luxeletter.

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Breaking the ice
You no longer have to go to New York to enjoy a breakfast of diamonds at Tiffany, for the legendary American jeweller is ready to make its way to India in February 2008. Tiffany & Co.’s first India store will be housed at DLF Emporio in Delhi, with more stores in the offing post the launch.


Tailor-made for India
Italian luxury menswear retailer Ermenegildo Zegna is in expansion mode in India. The company is exploring the idea of bringing a small division that will sell fabric from its textile mill to local tailors. This will be in addition to off-the-shelf and custom-made shirts and suits it currently sells in India. Zegna has a stringent process to choose tailors who will get its fabric based on the quality of their tailoring, clientele and the space they can provide.


Elevated experience
Celebrating its much-awaiting opening in India, Jimmy Choo will host two back-to-back soirées in Mumbai. On December 6, the UK-based brand will host an English High Tea instead of the regular cocktail party at its store at The Galleria, Nariman Point. The following day, clients will be invited to the store for a day-long, in-store celebration to view the collection and experience the store. If you are in Mumbai on December 7, drop by for a glass of champagne.


Zooming ahead
After bringing luxury car maker Porsche to India, Ashish Chordia of Shreyans Motors now has plans of introducing the Italian bike company Ducati to the country. While Porsche made its debut in Mumbai and Delhi last month, Ducati is set to arrive early next year. Apart from automobiles, Chordia has also made a foray into luxury apparel and accessories with brands like Fendi and Etro.


Three’s a charm
Louis Vuitton will launch its third store in Bangalore at UB City - The Collection, the group’s luxury mall. Set to open by mid-2008, LV also has plans to open additional stores in Mumbai and New Delhi and expand into smaller cities like Chennai, Kolkata and Hyderabad. Later this month, one of the hot tickets will be the LV-hosted polo event with Shah Rukh Khan and Priyanka Chopra in attendance.

Zegna cautious about India

Even as Ermenegildo Zegna, the luxury Italian suitmaker, is getting ready to open doors to the largest luxury store yet in Mumbai, group president Paulo Zegna is warning other companies that India is not everything it has been made out to be.

He should know. After all, Zegna was one of the first few luxury companies to make a foray into the Indian market in 1999. It withdrew a few years later as there was no suitable mall or shopping complex to provide the right ambience to market the brand. India's chronic lack of space for luxury retail and government hurdles are some of the biggest problems for luxury companies.

"There are tens of new shopping malls planned but none to my knowledge are of the standard needed for international brands," Mr Zegna told the Financial Times at the new store at Mumbai's five-star Taj Mahal Palace and Tower hotel.

India has one of Asia's least developed retail sectors, with organised corporate retailing accounting for a mere 3 per cent of estimated total retail sales of about $200bn, according to KPMG, the consultancy.

It took two years for the company to set up the new store, a process that involved finding a local partner, seeking regulatory approvals, and then trying to find a suitable location. In India foreign retailers selling under a single brand name, such as Zegna, are allowed to own 51 per cent of a retail joint venture. Those selling more than one brand are not permitted.

Mr Zegna says that beyond the regulatory processes, the biggest difficulty for retailers was real estate. In Mumbai, the only suitable locations for luxury brands were the city's five-star hotels. In New Delhi, DLF, a major retailer, is building a luxury retailing complex, Emporio, but some analysts believe even this might not be up to the standards of luxury shopping malls in east Asia, from which Zegna derives much of its sales.

"In my view, luxury, high-end malls are going to be few and far between," says Ranjan Biswas, a partner at Ernst & Young, the professional services firm. "If you look at the present category of malls in India, they are aimed mostly at the middle and upper middle classes because these are the groups that will have the highest purchasing power."

He said he believed proper, purpose-built high-end malls of international standards were about five years away.

Well, nobody said it was going to be easy, but someone's gotta do it, right?