Luxury brands a tough sell in wealthier India
On a recent evening at a luxury Mumbai hotel, shoppers tried on
sequined sandals and handmade moccasins at Joy Shoes, an Indian family
business that has sold out of its only shop for nearly 70 years.
Around the corner, a Moschino store with stylish displays of apparel
and accessories off the Milan runways stood empty.
Starting at 3,500 rupees ($70) for a pair of men’s shoes, Joy is not
cheap. But the key to its enduring popularity, says Munna Javery, the
third-generation owner, is knowing what customers want and maintaining
relationships with them over the years.
These are just two of the already considerable challenges facing
global luxury retailers in India. Despite its growing number of
millionaires, India lags emerging market peers China and Brazil because
of a lack of quality retail space, high import duties on luxury goods, a
cap on ownership in local units, excessive red tape and piracy.
India had 123,000 millionaires in 2007 and showed the fastest pace of
expansion, a Merrill Lynch/Capgemini report said, but that was the
smallest number in the “BRIC” emerging markets quartet, with China
already having more than triple that number of super-rich. BRIC
comprises Brazil, China, India and Russia.
Luxury goods in India also make up the smallest proportion of the
overall retail market, just 0.4 per cent, according to a Bain & Co
report.
Reuters
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