The rise and rise of international luxury brands in India

With increasingly more international conglomerates setting foot on Indian shores, what does it entail for the luxury-buying Indian consumer?

It was 2008 onwards that global patterns in buying luxury goods shifted completely. Chanel was no longer reserved for the upper echelons of European society or those from American generational wealth, making its way into the discerning hands of new Chinese billionaires, success stories from Singapore and Hong Kong hot-shots. The emergence of such purchasing patterns was evident in this new Asian landscape which made luxury conglomerates sit up and take notice of an untapped potential in the South-East Asian market.

According to a report by Euromonitor International, it was the period between 2008-2013 when India’s urban middle-class really mushroomed and found its exposure to a luxurious life, whether it was commodity-driven, i.e. leather goods, timepieces and jewellery or even luxury travel. The Indian government also opened up foreign direct investment in single-brand retailing and multi-brand retailing, incentivising international brands to open up retail in India. With the help of experts and partners in the retail landscape, including Genesis, VF Group and Reliance Retail among others, an enormous number of international household names found a home in malls across India. This boosted luxury-buying behaviour and Indians no longer had to wait to travel to have access to Gucci or even premium brands like Michael Kors; it was merely a trip to the mall on the weekend.

An evolving customer response

This India story saw an influx of brands across sectors, the most popular being fashion, closely followed by timepieces and home. The bigger names such as Dior, Gucci and Fendi seamlessly fit into the lifestyle narrative whereas some brands had to push for market literacy, or play up their affordable price points to make it in the Indian diaspora.

Says Chandni Talreja, former buyer for West Elm and Pottery Barn, “We noticed that 40 per cent of walk-ins at the store were already aware of the brand West Elm, even though Pottery Barn was better-known. Seventy per cent of the clients are retail customers and 30 per cent comprise architects and interior personnel who have also propelled the brand’s marketing journey” A once skeptical Tajreja adds, “We were pleasantly overwhelmed by the response to even the furniture, which surpassed the sales of decor, both at the physical store and online.” The brand has also stayed true to its initial merchandising, tweaking it just marginally for the Indian market. It shows how an evolving, discerning customer response to a global brand can be positive even with budding competition in the space locally.

Turning of the tables

In a reverse case, Japanese cookware brand Fujihoro has a different tale to tell. “The brand from Japan initially approached us for their launch in India. They had seen the success we brought to Noritake, being their first point of sales in the Indian subcontinent and wanted us to repeat the same with Fujihoro.” A nervous-at-first sister duo of Malvika and Sanya Rallan took the plunge with this little-known brand, introducing it to the market. “We did all the collaborations we could, with influencers, chefs and restaurateurs but what really worked for us was the duration of the pandemic. It started a subset of people looking to cook at home since food deliveries had stopped completely. That’s when we really boomed.” An important indication of varied buying patterns in India comes from Fujihoro’s figures. The brand’s sales fared exceedingly well in North East India, with numbers as strong as any of the metros. “With online shopping, you can never assume where your customer base lies, it differs from product to product.”

An upward trajectory

In the luxury segment, premium ceramic and tableware brand Vista Alegre has worked closely with Indian consumer behaviour to ensure their brand’s success. “Strategic partnerships with third-party retailers were paramount. We partnered with Oma, Ravissant and so forth, the pinnacles of luxury retail that really helped gain consumer trust and increase visibility. With the Portuguese, we informed them of traditions and patterns of Indian households. Working closely with them helped our breakthrough in the markets as well. We developed the ‘katori’ which is not usually a part of dinner sets, so that our dinner sets are more functional and complete the luxury experience for the Indian consumer,” says Saumya Lohia, Director of Vista Alegre in India. Villeroy & Boch was one of the first brands to enter the interior design space by joining hands with Genesis Luxury. For the much-revered brand, it has been a steady upward climb. In an interview with CEO Magazine, Boch’s Nazario Menezes says, “On one hand, they must maintain and enhance their current customer base while on the other, they must tap into uncharted regions, especially smaller towns, which are showing a lot of interest in premium ceramic ware.”

It also helps that the brand has now switched hands, coming under the much-experienced Goliath of Reliance Retail, responsible for making international brands’ market entry seamless. The group is now seen partnering with several revered international brands, not only in the home sector but also in fashion. A fashion favourite, Balenciaga, and legacy label Valentino (third time lucky?) are all set to open doors in the capital city with the Reliance group. The expertise, exposure and retail know-how that the group–led by Darshan Mehta–is unmatched. The group has grown multi-fold under him and has “420 mono-brand boutiques and 350 shop-in-shops across over 60 cities in India.”

Factors driving consumption growth

A much-awaited resurrection of clothing brand GAP is also awaited in 2022, with the group bringing the label back years after the failed attempt of Arvind Mills. But not everything is in the green when it comes to international brands in India. Do It Retail, a segment of the Kapoor Family Office, was responsible for bringing the much-loved travel bag label Longchamp to India. They also had labels such as Alexander McQueen and Fredrick’s of Hollywood in the pipeline, which didn’t come to fruition as the group itself faced closure among speculations of misdemeanour. Longchamp’s retail footprint is now limited only to a few airports, and a once celebrated luxury house finds no space on an Indian arm.

A similar fate was met by the Roberto Cavalli group that had opened a cafe, too, in addition to their full-range apparel offering. Premium brands seem to be on a stronger upward trajectory with labels like Onitsuka Tiger and Birkenstock opening storefronts slowly and steadily across India. Easily accessible e-commerce data also allows for the brands to take cautious steps to make their foray into offline retail. According to the 2022 Retail Report compiled by the Boston Consulting Group,- “Few factors that have been driving this consumption growth include: increasing household income; access to avenues of consumption like malls, shopping complexes, multiplexes etc.; increasing internet penetration; and improving consumer confidence. We expect India’s retail industry to continue to grow at 9–10 per cent to reach approximately $2 Tn by 2032, a growth trajectory that remains intact, although delayed by ~2 years due to the pandemic.” With the rise of blatant consumerism within the Indian landscape, the easy accessibility to luxury across segments and India’s rising middle-class strength, one thing is for sure. We hate to see them go!

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