NEW DELHI: Is India the next China for luxury goods manufacturers?
As Western markets falter, high-end retailers are searching for places where consumers are hungry for more glitzy brands and luxury products. India, in some ways, fills the bill, even as its economy cools.
While India makes up just 0.4 percent of global luxury good sales, the market is growing at 25 percent a year, according to a recent Bain & Co. study. There are 1.5 million households in India who could afford luxury goods, compared with 1.6 million households in China, according to McKinsey.
The numbers have prompted some luxury brand names to open retail stores in the largest cities in India in recent months, despite the economic downturn.
New entrants say that gaining a foothold in India has not been easy, and doing business has been difficult.
John Hooks, deputy managing director at Giorgio Armani, said he made dozens of trips to India over several years before partnering with DLF, a real estate giant. Foreign retailers are limited to 51 percent ownership of stores in India.