India is becoming a popular address for some of the most respected icons in global fashion.
Move over Manish Arora, J.J. Vallaya and Rohit Bal and make way for Calvin Klein, FCUK, Esprit and Jimmy Choo. The international fashion brigade is moving in and that spells good news for the fashion conscious consumer.
Foreign retail brands including luxury fashion brands such as Gucci and Bottega Veneta (a Gucci brand), which set up stores in Mumbai late last year have been making a beeline for the Indian market in a big way.
Louis Vuitton Moët Hennessy (LVMH), one of the world's top luxury goods companies, is looking at introducing some of its luxury brands such as Kenzo and Marc Jacobs in India to fulfil the growing demand for luxury goods, especially in cities such as Mumbai and Delhi.
Fendi, one of the company's brands, already has stores in India and has plans to set up more stores across the country.
Luxury footwear company Salvatore Ferragamo opened their first store in Mumbai in 2006 and will have more. Hermes is also planning to open stores across India this year. Versace Jeans Couture (VJC) and Gianni Versace will also be available this year.
High-end consumers
Even Giorgio Armani will soon be accessible to high-end consumers in the country thanks to the brand's tie-up with DLF. Dior is another name that promises to win loyal clients once it launches its stores here. Luxury brand Chanel, which opened its first boutique in Delhi in 2005, also has its fragrances and cosmetics being sold across counters in Mumbai, Chennai and Bangalore. These names are just a few on a growing list of international luxury and high street fashion brands making their presence felt in India.
So what's drawing these brands to India? Like China and Russia, India is home to a growing number of high net-worth individuals thanks to an economy that grew eight per cent in 2007, rising salaries, gains in the stock market and real estate sector.
Policy changes have also seen a more conducive environment for foreign direct investment in areas such as the retail sector.
Owing to these factors, India has achieved top status in AT Kearney's Annual Global Retail Development Index for the third consecutive year as the most attractive market for retail investment.
According to an India Brand Equity Foundation report, the Indian retail market is the fifth largest retail destination in the world which, according to industry estimates, is expected to grow from $330 billion (Dh1.2 trillion) in 2007 to $427 billion (Dh1.56 trillion) by 2010.
And that's not the end of it. According to KSA Technopak, a management consulting company, the luxury goods market is expected to grow by 14 per cent annually. That sounds like sweet music for a brand such as Gucci, which has tied up with the New York-based Murjani Group to open its stores in India.
Gucci opened its first exclusive store in Mumbai. The Murjani Group, which launched the Tommy Hilfiger brand in India in 2004, also has exclusive tie-ups with brands such as French Connection (stores in Mumbai, Delhi and Pune), La Perla and Jimmy Choo (which recently launched their first store in Mumbai) to represent them in India.
The Murjani Group also has a tie-up with Calvin Klein (CK) to launch the brand in India. According to a report in the Economic Times, CK has opened six stores in India, since its entry in April 2007, and hopes to achieve 100 per cent year-on-year growth in the next two years. The company will be opening 12 CK Jeans stores by April and another 12 stores by 2008-09 in places such as Chennai, Kolkata, Bangalore, Hyderabad and Pune.
In the past, the lack of a fitting retail space to house their brands has deterred luxury retailers from the Indian market considering most brands in this category don't want to be paired with lesser-known brands that attract the average consumer. However, new developments in retail real estate have helped set the creation of luxury environments and services.
Real estate developers are also trying to meet the luxury retail demands. DLF Emporio, the country's first luxury mall, will have several high-end brands including 70 international brands such as Armani, Versace, Louis Vuitton, Hugo Boss, Christian Dior, Dolce & Gabbana, Escada and Cartier.
Some of the brands retailing in the mall will be jointly operated by DLF. Another initiative, UB City — The Collection, a result of an alliance between the United Brewery Group and the Prestige Group, will offer luxury retail space in Bangalore. You can expect to see brands such as Dunhill, Gucci, Mont Blanc, Van Cleef & Arpels and Zegna among other international brands.
Fortunately, it's not just luxury brands that are cosying up to the Indian market. High street brands such as Promod, Mango and German brand Esprit have established themselves in the minds of fashion conscious consumers in India. International footwear and accessories brands such as Nine West, Aldo, Charles and Keith and Bally are also finding their place among the shopping lists of discerning Indian consumers, who are pretty pleased about the choices they now have.
"For years, I had to wait for overseas work related trips or friends and relatives living abroad to get the brands I love such as Mac, The Body Shop, Mango and Marks and Spencer. Now, thanks to the retail revolution that's been sweeping across the country, including the smaller cities, I can shop for these anytime, at any of the malls in Mumbai. Sometimes, you can get all these brands under one roof. And I speak not just for myself but for also for my friends and colleagues.
Today, we can walk into any of these malls, browse through the different stores for our favourite international products and feel good about the fact that India has finally arrived on the brand map.
Also, the fact that salaries are at an all time high right now definitely reduces the guilt pangs after each of these shopping sessions," says Jhumur Ghosh, a Mumbai-based journalist.
Zulfia Waris, a producer with MTV India, also reflects the sentiment. "While a decade ago our only claim to fame was the presence of international brands such as Benetton and Nike — today it feels nice to have a mix of luxury labels and high street fashion from Louis Vuitton and Fendi to Nine West, Promod, Mango, Guess and Aldo, just to name a few.
"It feels great to be able to finally access brands that otherwise were just names thrown into conversations with cousins abroad or part of glossy magazines.
"Earlier one had to depend on friends and family who would regularly travel to be able to get your annual stock of fragrances, tees, jeans, beauty products, bags and trendy eyewear. Today it's just a cab-ride away. I pick up all my shoes from Aldo and love the dresses at Mango.
Nine West has nice bags and with Body Shop and MAC having come in recently all my makeup and bath products are taken care of. For those of us who can't go traipsing around the globe every few months — the presence of these brands is great, after all being trendy is no longer the prerogative of a certain lucky few."
Consumers such as Waris and Ghosh are representative of a growing segment of the Indian population who want to wear internationally recognized brands and can afford it. And that segment will definitely
expand.
According to a new McKinsey Global Institute study, the average Indian consumer will be spending an average of Rs200 or $5.08 (about Dh19) per day by the year 2025.
The report suggests that the main factors for this increase will be a ten-fold increase of the middle class population of the country from 50 million to 583 million, along with a three-fold rise of household incomes, leading to an aggregate consumer spending to reach Rs70 trillion in 2025 (about Dh6.51 trillion).
The study also stated that if the country maintains its current growth rate, average household incomes will triple over the next 20 years and it will become the fifth largest consumer economy by 2025, up from 12th now.
It just boils down to this: fashion may not be something the average Indian consumer sees on television. It will be something to wear after all.
