Reuters reports that International luxury brands are entering India albeit cautiously. Versace was the latest international luxury brand to open in India. Others that have opened recently due to the government’s permission to allow 51% FDI in single brand retailing include Hugo Boss, Burberry, Cartier, Chanel, Louis Vuitton and Tommy Hilfiger. Gucci and Giorgio Armani have plans to open stores in the country in the next 18 months.
The luxury good market in India is estimated to be worth Rs. 15-20 billion ($326-$435 million), and expected to grow by 15-20% per year in the next 5 years. LVMH and Fendi are both planning to invest large sums in the country to set up manufacturing and distribution units.
The most significant factor driving this growth is the rise of the number of high income households caused by a robust economy. According to analysts, in 2006-07 there will be 6 million rich households and those with an income of $22,000 would increase to 91 million by end 2006. Other factors such as the enormous size of the population below 25 years of age, rising salaries and easy availability of credit are also fueling this growth.
Some of the problems that luxury brands are facing in India are the high price as well as lack of retail space in high streets and up-market malls, and high import duties.
Wednesday, June 14, 2006
The Hindu Business Line reports that Lifestyle International Pvt. Ltd. announced it will be opening 32 stores over the next three years. Lifestyle’s parent company is the Dubai based retail chain Landmark Group. The company expects its turnover to increase to Rs. 5.4 billion next year and increase its market share from the current 3% to 15% by 2010. At the opening of Lifestyle’s first store in Gujarat in Ahmedabad’s Gallops Mall, Kabir Lumba, Executive Director, Lifestyle International said that the company will be expanding to other locations in the state, such as Surat as well.
Posted by Shalini at 10:40 AM