These are exciting times for the luxury market in India. Fuelled by population growth and increasing urbanisation, the industry has returned to its pre-Covid performance levels, and is expected to experience strong growth to reach $3.7 billion by 2026, as per a recent luxury industry outlook presented by global consulting firm Boston Consulting Group (BCG).
The sentiment was echoed by Benedicte Epinay, president and CEO of Comite Colbert, the official luxury association of France, at a luxury symposium organised by the Indo-French Chamber of Commerce and Industry (IFCCI) in the national capital recently.
According to Epinay, the luxury industry is booming, especially in China and the United States—the top two markets for the luxury industry globally. But there is a strong demand in India as well.
“India has all the ingredients to be a successful luxury market—history, roots and know-how of the crafts, the right people to buy, making it a strong and growing market, and from the Western perspective, it is an interesting market to promote collaborations. It’s also interesting to see the appetite from the Indian consumers for our brands. These are good signals for the future of the luxury market in India,” she says.
Unfortunately, Epinay feels it will take years to come to the level of what China is now. “If we talk about China, it has over 1 billion people, but there are many Gen Zs who can afford luxury goods. And I don’t think that’s the case in India as of now,” adds Epinay, who confirmed fashion has always been the best category with the leather, bags and shoes segment performing well globally.
Even though obstacles still remain in India, such as regulations, which is a huge one, with the opening of new malls, such as Europe’s top-notch shopping centre Galeries Lafayette soon, Epinay feels that the infrastructure is going to be good in the coming years. “All these put together are slowly setting the right recipe for a strong market here,” she adds.
The rising demand
India has a strong demand in terms of markets of interest for global brands and retailers. “The luxury industry is booming in the world, especially in China and the US, the two markets known for the luxury industry globally. But this year the luxury industry as a whole has shown strong signs of growth, coming to a new normal, as this is always the first industry to come out strongly from a crisis. India has been heralded as an important market for global luxury. Both India and France have shared a mutual fascination for centuries and with India having mastered the best of craftsmen, emotions and know-how to create and maintain it for over 20 years, we see India as a promising market for luxury,” says Epinay.
Comite Colbert represents 93 luxury brands from across the world including LVMH, Kering, Hermès and Richemont, including Cartier, Balenciaga, Christian Dior, Chanel, Celine, Louis Vuitton, John Lobb, Saint Laurent, Krug and Van Cleef & Arpels, as well as independently owned French houses such as Christofle, Yves Delorme and Longchamp.
The association is also a major advocate of intellectual property, and has contributed to the adoption of the Longuet law in France in 1994, which aimed to put an end to counterfeiting. It also organises campaigns to raise awareness among the general public and is committed to securing effective European regulations to combat counterfeits both offline and online.
“We have been impelling public authorities in Paris and Brussels to defend the individuality of a leading sector in French industry. The last regulatory decision taken on counterfeit products by The European Commission in Brussels was to analyse and classify every new type of counterfeit product. The fake market is growing because of the rise of digital selling. We have made the digital platforms work towards selling responsibly. But even with this decision, which is on a European level, we can see that in China, fake goods are still strong, unfortunately. So it’s a never-ending issue,” she says.
While the association is committed to improve the carbon footprint, to develop repairing, to protect biodiversity, to improve the transportation of products all over the world, Epinay shares her concerns when it comes to the ease of doing business in India, despite an optimistic outlook from a lot of companies already working in India.
“The ease of doing business in India is complicated. The brands have to go through complex regulatory and custom duty issues. It costs 1.5 million euros to set up infrastructure for any brand coming to India, which is in accordance with the Bureau of Indian Standards (BIS). It’s a lot of money to start and when you haven’t started gaining any profit/ money. It’s almost the same in China, but the business is already there. You earn so much money in China that they can spend from the regulatory point of view,” she says.
The ‘glocal’ consumer
While the luxury retail infrastructure and business is developing and changing, Abheek Singhi, managing director and senior partner at BCG India, says the Indian luxury market can be put into three areas—category, brands and price points.
“For example, the market size in various categories may vary from $5 billion to $10 billion in India, which is fairly small as compared to the global markets, but there is a demand for aspiration. The affluent household in India is growing in size. There is a demand for a combination of local and global brands. However, for a retail infrastructure to be in place for any luxury brand, trust and experience are important for a customer in India,” says Singhi, quoting how Apple as a company is now a trusted global brand in India, and had a revenue of $200 million almost a decade ago in India and this year, it is estimated to touch $10 billion.
Globally, the demand for local products is big. “The shift is apparent in the global luxury world which is now dotted with local identities. The economies and cultures have to be linked and shown to artisans and this is where luxury brands have a responsibility for social and environmental progress with the idea to preserve, develop, and pass on to future generations. Customer expectations regarding the alignment of brand values and concrete actions have become a crucial imperative in the relationship between the customer and maisons. In the new luxury industry, there is a demand for handmade expertise. With a strong community of luxury brands in India, this demand is high and will only grow with time,” says Epinay.
Adds fashion designer Sabyasachi Mukherjee, founder, Sabyasachi Couture, “Luxury as an industry has been rarefied for years, but has also gone through a lot of changes. While we have demonstrated the ability to endure and overcome crises, the industry is built through resilience where consumers are more demanding, aware, respect value and integrity. In fact, the Indian consumer is more resilient, astute, and intelligent in her choices. For Indian luxury brands to sustain over a period of time, novelty will never give longevity, instead we should create products for consumers which stay forever.”
Globalisation has also brought accessibility for luxury brands. For fashion designer Gaurav Gupta, luxury in fashion has a different global story to tell to the world. “The Indian bride is wearing a sculpture statement gown for her wedding and I think that’s where India becomes global and the globe comes to India,” says Gupta, who draped pop diva Beyoncé on stage in his neon green saree gown at the Renaissance World Tour concert recently.
