The Indian consumer desires to possess international luxury brands as an inspirational product. Additionally, no Indian retail brand actually qualifies to be categorised as a luxury brand. This readiness for luxury as an organised market, has been recognised throughout the world and international luxury brands are exploring possible avenues and tie-ups to enter the Indian retail market.

Indian apparel companies have realised the huge potential of partnering with these global luxury brands wishing to enter India. This helps them not only to extend their portfolio into the luxury, super premium, premium segments, but also makes them probable sourcing partners for these brands in India as well as internationally. Viceversa, luxury brands gain access to well established distribution channels and customer base.

“Luxury is consumed by a subset of the Super Affluent class. There are 1.6 million Super Affluent urban households in India.”

The market segment for luxury is only going to get bigger and better. The task is therefore to create retailing zones for luxury and upscale products. In the past, 5-star Hotels have been the most prominent addresses for luxury retail in India. However with the growing market for luxury in India, such spaces are proving inadequate. The concept of luxury retail is being further developed by retailers and mall developers alike.

S. Kumars Nationwide Ltd. (SKNL) has specifically set up a subsidiary, “Brandhouse Retail Limited” to carry out its expansion plans. Brandhouse Retail Limited plans to bring in 17 international brands into India of which 5 will be luxury, 6 super premium and 6 in the premium segment. It has already tied-up with Alfred Dunhill Ltd. and Escada, to retail their offering in India.

In a similar move, Raymond has a 50:50 joint venture with the Italian major, Grotto S.P.A. The joint venture has launched the highly successful Gas brand in India.

Planet retail has launched 'Replay', a French premium denim brand in India.

On the retailers side, Shoppers' Stop is planning to enter the luxury retail segment with large format retail stores which will house products from many of well-known luxury brands, including Louis Vuitton, Gucci, Zegna, Hugo Boss, YSL, Mont Blanc and Christian Dior. The company plans to invest Rs.100 crore in this model in the first year itself.

“Luxury is consumed by a subset of the Super Affluent class. There are 1.6 million Super Affluent urban households in India.” Going forward, how will these international luxury brands react to the Indian market – will they introduce bridge/semi-premium lines for greater penetration or will they introduce more brands from their umbrella in different segments? (E.g. Benetton, though not luxury, has now brought in its Sisley brand)