International luxury brands show reserved approach in India
International luxury brands present at the CII-ET Dialogue on Luxury event which took place yesterday in New Delhi highlighted the great potential of India’s luxury market, especially taking into account the growth rate of the wealthy population. Angela Ahrendts, CEO of Burberry, said India is the company’s fastest growing international market. She confirmed plans for the expansion of its current retailing in India, currently counting 10 stores, however, she did not give a clear indication on how many new openings are planned or the development pace.
Michele Norsa, CEO of Italian luxury house of Salvatore Ferragamo, also present at the event in Delhi said his company plans to increase its number of stores in India from four, presently, to ten, in the next 5 years. He indicated that his company will be focusing on Delhi and Mumbai rather than second tier cities, citing high real estate prices and rentals as an impediment. Norsa also added that Ferragamo registered 40% sales increase year on year.
One of the other hot topics debates at the event was the restriction of Indian legislation on foreign direct investment which, currently, does not allow majority ownership of mono-brand retailing. Despite indications, earlier this month, that the Indian Government is considering to allow direct foreign ownership in mono-brand retailing, there is no clear confirmation as to when new legislation might be actually adopted. Most local luxury retailers represented at the event also stressed that international luxury brands should understand the Indian consumer and adapt accordingly.