India’s luxury market development gathers pace
The recent Luxury Goods Forum organized by The Confederation of Indian Industry in New Delhi last week gathered an important number of local and international luxury industry players with the aim of creating awareness for the potential of the local luxury market. With the occasion of the forum, A.T. Kearney presented its Report on ‘Indian Luxury Market’ which highlighted that that in the matured markets growth has plateued and the Indian middle class with an income of around Rs. 10 lakhs household income per annum is the segment which is provides the highest opportunities for growth in luxury.
According to the A.T. Kearney report, the Indian Luxury market is currently estimated to be at 4.76 billion USD and has a latent demand of 3 to 3.5 billion USD. The major component of this market is jewellery. Another interesting fact emerges from this study is that lndian luxury market is 60% dominated by men, if the jewellery sector is taken out. One of the factors which delay the development of the luxury market is the lack of appropriate real estate and the fact the large geographical spread.
The event was attended by Mr John Hooks, the Deputy Chairman of the GIORGIO ARMANI Group. In a briefing to the media, he expressed a rather conservative view regarding the potential of the Indian luxury market, highlighting the fact it is a market which requires a dedicated strategy of development. "We are not in a hurry to open shops here as we do not want to make any big mistake here. But yes, we will need to have a different approach for India" . He said the firm still does not "have a clear idea of the pace of growth in the country. We are currently understanding and experimenting."
The company, which currently operates two stores in Delhi for its two brands — Giorgio Armani and Emporio Armani , will be opening a third store in Mumbai next week, he added. Asked about the future expansion plans, he said the firm is looking to take Giorgio Armani stores in other cities like Bangalore, Hyderabad and Chennai also. "Eventually we should have a total of 10 to 12 stores here in India," he said, but did not share a timeline for it.
Stressing that the company is preparing for a strong foundation for a good business in the country, he said: "We have a strong strategy in India and have to resist the temptation to be an opportunist. We expect a long term in the country." Hooks, however, said Giorgio Armani’s plans have been hampered by the lack of proper retail spaces in India.