How global luxury brands are expanding in India

Gucci, Cartier and Louis Vuitton are among the brands signing leases for stores in Indian tycoon Mukesh Ambani’s new Mumbai mall, as luxury companies and Reliance Industries look to benefit from strong economic growth and a sharp rise in the number of millionaires. .

Jio World Plaza, which is likely to open this year, is located inside Reliance’s $1 billion business and cultural hub in Mumbai’s business district, an industry source said.

Reliance has not yet disclosed details about the tenants, but lease documents provided by real estate analytics firm CRE Matrix revealed that several brands owned by Burberry Group as well as LVMH, Kering and Richemont will be in the mall. They have agreed to rent shops and share the same among themselves. Reliance accounts for 4% and 12% of their monthly net revenues.

The brands include jewelers Cartier and Bulgari, fashion houses Louis Vuitton, Dior and Gucci, watch brand IWC Schaffhausen and luxury goods maker Rimowa, which will open its first outlet in India.

Reliance, Burberry, LVMH, Kering and Richemont did not respond to requests for comment.

“Luxury brands have always struggled for quality retail spaces in India and many have been forced to open their first outlets in luxury hotels,” said Anuj Kejriwal, CEO of Anarock Retail, India. “These brands are now looking for a meaningful presence.”

At approximately 700 square meters (7,500 sq ft), Louis Vuitton’s Jio World Plaza store will be the largest among its four outlets in India. Cartier’s store will be the second in the country and Dior’s third store.

To ensure that the mall retains its luxury appeal, some lease agreements such as Dior include a clause that entitles it to a 25% rent reduction if any of the 10 luxury brands including Gucci, Cartier, Bulgari and Tiffany At least four do not open their own brands. Outlet in the mall within six months.

India, home to the world’s largest population of 1.4 billion, has a per capita income of just $2,300, but the country is also home to more than $800,000 millionaires, who are spending money on everything from luxury homes to expensive SUVs.

Real estate consultant Knight Frank estimates there will be 1.4 million millionaires in India by 2026, 77% more than in 2021, as the economy continues to strengthen.

The growth in India, where Euromonitor estimates the personal luxury market will grow about 12% a year in 2022-2026 to nearly $5 billion, stands in contrast to the slowing economy in China, whose appetite for designer goods has stymied sales at luxury firms for years. Has stimulated growth. ,

Euromonitor data shows China’s personal luxury market will grow an average of 11.5% over the four years to $107 billion by 2026.