The world’s biggest luxury brands have been dreaming of India’s huge consumer base for decades. However, developing the market has proven to be a complex task.
French retailer Galeries Lafayette is the latest to try its luck. On Sunday, the company opened its first Indian store: a sprawling, five-story department store in Mumbai, the country’s financial capital.
The magnificent market entry is supported by the fashion division of the Aditya Birla Group, a large Indian conglomerate. Luxury expert and Comité Colbert Chief Executive Officer (CEO) Benedicte Epinay called the arrival of the French department store “an important step.”
With 1.4 billion people, India offers what Epinay called “a promising but still complicated market.” Brands don’t just have to overcome high tariffs, cumbersome bureaucracy and infrastructural limitations. They also have to compete against a strong domestic luxury market.
The Galeries Lafayette store in Mumbai is spread over 8,900 square meters. According to the French retailer, around 280 luxury and designer brands are offered there. Almost all brands are foreign. Industry experts warn that this is a risky venture given the rich local clothing culture. Philippe Pedone, Galeries Lafayette’s international development director, said at Sunday’s opening that more local brands would be added.
“I think many brands like Louis Vuitton, Gucci and Dior have done a good job of weaving Indian design into their products,” 39-year-old Sonal Ahuja from Mumbai told AFP. “But at the end of the day, if you want to buy something for a wedding, you buy from Indian fashion designers Sabyasachi or Tarun Tahiliani. Why would you want to buy something foreign that tries to be Indian?”
‘Meets all criteria’
India’s luxury market is still relatively small but is growing quickly. The market is valued at $11 billion (€9.48 billion) in 2024 and is expected to triple to $35 billion by 2030, said Estelle David, South Asia director at Business France.
India’s economy produces tens of thousands of new millionaire households every year. These consumers are increasingly spending money on everything from Lamborghini cars to Louis Vuitton bags.
“When a luxury home considers a new country, it takes into account the number of wealthy people and the rise of a middle class,” Epinay said. “India ticks all the boxes.”
The reality is more complex. French luxury giants contacted by AFP declined to comment. Their silence, analysts suspect, reflects a lack of positive statements about a market that is widely viewed as difficult.
“They have little data to show that they are making profits or generating a return on investment,” said Ashok Som of France’s ESSEC Business School.
In the early 2000s, the biggest fashion houses saw India as their next growth engine after China. But a quarter-century later, the market is still tiny, Epinay said.
According to Epinay, most brands only have one to three stores in India, compared to 100 to 400 in China. In their view, the only real similarity between the two giants is “the size of their populations.” India lacks China’s “social, linguistic and territorial homogeneity,” said Epinay.
India still has a limited number of premium shopping malls. Most of them do not correspond to what customers find in the Middle East, Europe, the United States or China.
“India is not at the same stage of development, so it is very difficult to compare,” said Business France’s David.
Nicolas Houzé, CEO of Galeries Lafayette, said the luxury group plans to open a second store in Delhi by the end of the decade. The initial sales target is 20 million euros.
‘Adapt to the culture’
High tariffs often cause Indian consumers who can afford it to take a $350 round-trip flight to Dubai. There you can buy a French luxury handbag for up to 40 percent cheaper than at home.
Vishal Mathur, a 46-year-old entrepreneur who works in the family business in Mumbai, told AFP: “You’re willing to pay for craftsmanship, for style, for the brand. But to say you should pay extra just to buy in India? Absolutely not.”
India and the European Union have committed to concluding a free trade agreement by the end of the year. According to Epinay, this would “bring a breath of fresh air into the market”. And making profits in India requires creative thinking.
Although major foreign ready-to-wear brands have branches in metropolises such as New Delhi, Mumbai and the tech capital Bengaluru, Western fashion remains in the minority. Many men wear the traditional knee-length kurtas on special occasions, while flowing saris remain the most popular among women.
Brands like Louboutin, Dior, Chanel and Bulgari are already working with designers, labels, Bollywood stars and local influencers to target Indian consumers, market specialists said. “You have to adapt to the culture, tastes and consumption habits,” said David. (AFP)
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