Italian fashion house Roberto Cavalli announced in March that the renowned brand would venture into new territory by opening a store in New Delhi, its first in India. Amidst a growing list of high-end designers "setting up shop," Cavalli joins other Italian fashion houses Gucci, Armani and Versace, which were among the first to enter the market in the mid-2000s. The expansion is set to include all facets of the Cavalli brand, from garments to cutlery. CEO of Roberto Cavalli Group, Gianluca Brozzetti, pronounced the opportunity in India to be "enormous."
The announcement came only days ahead of the 5th annual Mint Luxury Conference, held in Mumbai from March 23-24. The event brought together India's most fashionable and influential stakeholders to discuss the future of the luxury industry. A poignant discussion point throughout the three-day conference was how India has so drastically swung from the production end of the global luxury industry to become a target market. However, the proliferation of the luxury industry in India is by no means a miraculous occurrence, but a measurable consequence of an economy thriving in the globalised business environment.
Reaping the benefits, and stimulating the luxury industry, is India's middle class. Although currently a meagre five per cent of India's 1.2 billion person population, this demographic is expected to greatly expand in years to come. The 2012 Boao Forum for Asia, held in early April, concluded that aiding economic reformation in the region are predictions that Asia's middle class will reach two billion by 2020, led by China and India. This will cause the number of Indian households with disposable incomes of between US$4,000 and US$25,000 to increase from five per cent of the population to 41 per cent. The considerable shift in wealth distribution will bring a new group of consumers into what McKinsey Management marketing and sales director Laxman Narasimhan calls the "consumption curve." Narasimhan believes that the luxury industry in India is as driven by income-related growth as it is by any other economic indicator.
Last year, luxury sales in India were equal to US$3 billion, a figure that is expected to jump to US$30 billion by 2015. By that time India and China are expected to account for a quarter of global luxury sales. Increased luxury sales of 1,000 per cent make the links between increased affluence and demand for luxury goods largely undeniable, at least from the quantitative perspective. Nonetheless, the demand is not purely reliant upon India's economic climate and opportunistic businesses; luxury products, particularly designer fashions, are at the forefront of Indian aspirations.
In 2006, a Nielsen survey of Indian shoppers found that future spenders wished to purchase Gucci, Armani, Louis Vuitton and Dior. Yet, at the time of the survey, domestic availability was limited. Of the four designers, only Louis Vuitton had a store in India; Dior opened not long after the survey in Delhi, while Gucci and Armani boutiques opened in 2007.
The unrequited demand of shoppers reflects that although the Indian economy is prosperous, the demand is real, as well as historical. The desire for Western luxury has long been instilled in Indian culture by their social elite, the Maharaja, who rendez-voused with Western luxury. For centuries, the royals were clientele of Europe's most prestigious luxury brands. Maharaja of Kapurthala, Jagatjit Singh, was known as a frequent patron of Louis Vuitton in the late 19th century.
At the first Mint Luxury Conference in 2008, former French Ambassador to India, Jerome Bonnafont, described luxury as being a defining feature of the country. "Because of lavish Indian weddings, media advertisements, maharajas and Bollywood stars, I feel the art of luxury is alive in India," said Bonnafont at the conference. Though his examples of Indian extravagance and opulence are endowed with tradition, the aesthetic qualities of Indian luxury transcend the domestic bazaar. Hermès and Cartier have paid homage to India with motifs of quintessential Indian luxury, such as Kerala-inspired perfumes and Taj Mahal-adorned watches. Most recently, Chanel's 2012 Pre-Fall collection was noted for its distinctive Indian flare, including sari-esque dresses and oriental jewellery.
|Christian Louboutin Bollywood shoe.
Acknowledging the genuine demand of the Indian consumer, and their attraction to the aesthetic qualities of luxury goods, keynote speakers at this year's Mint Luxury Conference were from the fashion industry. Missoni's creative director Angela Missoni, designer Diane Von Furstenberg and the reigning king of shoes, Christian Louboutin all spoke. Louboutin, famous across the globe for his red-soled shoes (despite recent intellectual property disputes), opened his first Indian boutique in Delhi in February. "There were a lot of my clients who used to come to London to buy shoes and they asked me 'open one store in India,'" he said. "From [the] business point of view, it made sense to open a store here." Frequenting India since 1970, the country often influences Louboutin's designs, although his infamous Bollywood shoe was criticised for its kitsch and cliché portrayal of Indian fashion. But Louboutin, who justifies the shoe's relevance to the glamour of Bollywood, feels that Indian women are typically understated in the ways they choose to express their expensive tastes and what they consider luxury.
Whilst still disputing financial technicalities such as India's incomparably high import taxes, businesses can be assured that their investment in the Indian market is safe; the luxury industry currently taking momentum is forecasted to continue thriving. But in a culturally rich, yet diverse, country like India, experts warn that while the demand will stay the same, what denotes luxury now may be considerably different to what the rising class of young, educated and, most importantly, affluent Indians consider luxury in the years to come.
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