Luxury retailing has indeed arrived in India, except for a few glitches. Experts say the $14-billion industry, which is growing at an average pace of 20% per annum
KOLKATA: Luxury retailing has indeed arrived in India, except for a few glitches. Experts say the $14-billion industry, which is growing at an average pace of 20% per annum, is facing a big dearth of luxury ambiance. There’s also the problem of high import duties.
An industry analyst says: “There are very few luxury shopping destinations in India. Currently, only some of the brands are sold from five-star hotels. Emporio in Delhi and UB City in Bangalore will address this issue to some extent. But, we need more luxury malls for the right ambience.”
Commerce minister Kamal Nath recently voiced concerns over revenue losses stemming from Indians shopping for luxury brand overseas. His statement has led to a speculation in the industry that the government might consider rationalising import duties in the near future.
In India, the category of import tax includes basic duty which ranges from 0- 65%. Added to this are countervailing duties, excise duties and other regulatory duties. Thus, the total import tax sometimes goes up to as high as 150%.
The luxury segment has to bear with these problems despite the fact that the biggest names in the luxury space such as Chanel, Lancombe Valentino and Gucci are already present and many others like Hermes and Jean Paul Gaultier are queuing up. Fashion powerhouse Moet Hennessy Luis Vuitton also announced that it will introduce its mobile phones range under the Tag Heuer brand soon.
KSA Technopak data suggests there are nine million Indian consumers who can afford luxury brands. French luxury vendors are not just targeting the niche Indian who buys overseas but a new breed of shoppers who are graduating from premium to luxury.
According to retail portal Indiaretailing, none of the 350 malls that will be operational soon will have the necessary class and ambience for luxury retailing.
“Space developers need to understand that luxury brands always like to be in control of their environments. A good example is Ashish Chordia. The entrepreneur behind the super-luxurious Thanks multi-brand store in Mumbai also gave a facelift to the store’s immediate neighbourhood,” said Indiaretailing sources.
Apart from DLF’s Emporio Mall in Delhi, which will house only luxury brands, and the Gitanjali Group’s foray into luxury retail with the setting up of Luxury Connexions, a chain of malls in eight cities, there are a few more properties being developed exclusively for luxury brands.
Real estate prices are spiralling, but at the same time, high street locations in India are noisy, chaotic, often with a bazaar-like feel to them and not always conducive for luxury labels.
In contrast, China has differentiated addresses for luxury retail. These include The Palace Hotel in Beijing or even the Plaza 66 in Shanghai.
As Normand Cartier, managing director, Cartier, is learnt to have once said: “The sale is not the final point in our lexicon - it’s the beginning of the relationship.”
m_madhumita@dnaindia.net 
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