The fast-emerging Indian middle class has started attracting luxury brands in the flourishing cities of Mumbai and Delhi even brands like Hermès and Christian Louboutin are willing to pay skyrocketing rent for space in the most expensive Indian retail markets.
Indian fashion designer Sabyasachi Mukherjee established an outlet in a restored building dating from the early 1900s which is a few blocks away from Reserve Bank of India’s headquarters in Mumbai. With the opening of a four-story flagship retail store, Sabyasachi has joined scores of luxury retailers to follow the money to southern Mumbai. Hermès International, Christian Louboutin, and others have set up shop, willing to pay the neighborhood’s skyrocketing rents for space in historic real estate and access to a rising upper class.
Experts the Indian pandemic fuelled a desire for personal luxury while limiting travel, making Indians buy these goods in their home country. It was an opportunity for luxury brands, that rushed to India to avail it.
It is estimated that about 1.66 million people in India are forecast to have more than a million dollars in net worth by 2027. The bracket of those with $30 million to their name is forecast to grow by almost 60 percent in the five years from 2022, according to Knight Frank’s Wealth Report.
Dior for instance chose Mumbai’s iconic Gateway of India as the backdrop for its first runway show in India. The collection boasted sequin dresses, bright pops of pink, and traditional Indian needlework on jackets, skirts, and bags in an appeal to local consumers, and their wallets.
With increased demand for luxury brands, the rentals have gone high as there is a limited supply of properties available. Monthly rent for retail spaces in the area can stretch beyond $6,044 to $7,250 for a 1,000-square-foot space, a property dealer revealed.
Sabyasachi, known for its elaborate wedding dresses and jewellery, has been able to expand with backing from Aditya Birla Fashion and Retail Ltd., which took a 51 percent stake in the brand with an all-cash deal in 2021.
Aditya Birla isn’t alone in adding premium and luxury brands to its portfolio. Asia’s richest man, Mukesh Ambani, also has set his sights on bringing luxury experiences to India. His Reliance Brands Ltd. has invested in MM Styles Ltd., which owns the eponymous fashion house run by Bollywood stylist Manish Malhotra. The conglomerate has also taken a 52 percent stake in the label of Ritu Kumar, another Indian designer. Reliance’s latest financial results highlight the growth in the non-food business, with its retail unit that includes fashion and lifestyle brands delivering 15 percent growth in revenue year-on-year.
Indian affluence attracting luxury retailers to India
