Something that is an indulgence rather than a necessity usually defines ‘luxury’. Be it cars to yachts or homes to perfumes, luxury for some is a way of life. The feeling of guilt associated with ‘splurging on extravagances’ is slowly being wiped out with the growth of ‘Me-first’ generation.
Luxury consumption can begin at much lower income levels-upwards of Rs. 10 lakh per annum. But, real luxury consumption in India begins at income levels above Rs. 30 lakh far higher than global threshold incomes, according to a latest CII-AT Kearney report.
The luxury market in the country which is currently restricted to the top five cities is likely to grow three times and touch US$14.7 billion by 2015. In 2009, the luxury industry, including products, services and assets, was estimated at US$4.76 billion, according to the report.
Within the luxury products space, apparel and accessories segment has been a compounded growth rate of 19 per cent between 2007 and 2009. International brands cater to the casual wear, formal western wear and accessories, while Indian designers cater mostly to traditional and ethnic wear.
Amongst the international brands, unlike in mature markets, the menswear segment is much larger constituting upto 60 per cent. The market has witnessed entry of brands such as Louis Vuitton, Burberry, Gucci, Valentino, Zegna, Gas, Diesel, Versace, Armani, Hugo Boss, Dunhill in association with local partners here.
“In the next few months a number of Italian brands will announce their investments for expanding and strengthening presence in India”, Fondazione Altagamma Executive Director, Armando Branchini told PTI Economic Service.
He said Fondazione Altagamma, which has 70 members, expects the total number of single brand stores of Italian firms in India to touch 200 by 2020 from 30 at present. The 30 single brand stores of Italian brands that are already present in India is too less as compared to China, which has about 400 stores. Its members include Bvlgari, Fendi, Ferrari Gucci, Max Mara, Valentino, Venini and Versace among others.
Similarly, leading Italian fashion luxury firm Giorgio Armani, that currently operates two stores in India, is opening another one in Mumbai. The firm is looking to take Giorgio Armani stores in other cities like Bangalore, Hyderabad and Chennai with an intention to open up to 12 stores in due course.
Even, Aditya Birla Group-promoted Madura Garments Lifestyle Retail is planning to bring in two global brands – Missoni and Vivienne Westwood – into the country to strengthen its presence in women category. Madura Garments Lifestyle Retail currently operates three stores, one each in Mumbai, Bangalore and Delhi that sell high-end luxury apparel and accessories from brands across the world under ‘The Collective’ banner.
On the policy side, the Government has indicated that a new policy on foreign direct investment in the politically sensitive multi-brand retail sector will come soon.
A six-member committee is evaluating the stakeholders’ comments, received by the Department of Industrial policy and Promotion (DIPP), the nodal department on FDI policy, on its discussion paper on opening the sector for FDI.
“Let me assure you that it (the inter-ministerial committee set up for the propose) will not take inordinate amount of time…there cannot be an open-ended time line, we are monitoring the progress of that group,” State Minister for Commerce and Industry, Joytiraditya Scindia recently said.
– PTI Economic Sevice