Brands like Louis Vuitton, Prada, Gucci and Jimmy Choo are no longer alien names in India, all because of growing international exposure to Indian consumers and their ever-growing per capita income. No doubt, the demand for luxury goods is growing exponentially across all the metro cities. So does the need for luxury retail spaces is growing expotentially? Let’s find out…
To cater to the demand, luxury malls such as DLF Emporio in Delhi, Palladium in Mumbai, UB City in Bengaluru, Bergamo in Chennai, and Quest in Kolkata are emerging as ultimate ultra-premium retail destinations to make luxury available to Indian consumers.
To begin with, Sanjeev Mehra, Vice President, CESC Properties, Quest rightly puts up: “The demand for luxury in the initial years was extremely limited, predominantly to people who had travelled abroad; and this was for the rajas and maharajas of our country. Watches and accessories were the initial drivers. The opening up of the Indian economy, the growth of India in the last 25 years, with its global position in the economic environment, helped to raise the standard of living and, more importantly, the aspiration of the people of the country. This became the very fundamental for people wanting to live better, eat better and dress better. With this grew the demand for the nouverich to have the same brands which exist abroad at their beck and call. These brands have a habit of co-existing with one another and thereby the demand for quality retail space and luxury malls.”
Quest was initially conceptualised around 2007–2008. The list of luxury brands that the mall currently houses include Gucci, Burberry, Canali, Paul Smith, Breitling, Michael Kors, Furla, Omega, Tag Heuer, Villeroy & Boch, Tumi, and The Collective.
“WE are currently in talks with Thomas Pink and another luxury shoe and bag retailer. However, nothing is confirmed as yet. For F&B, we have Yauatcha as the Michelin-starred restaurant and Serafina from NY as luxury offerings for food,” adds Mehra.
According to him, Gucci is the best performing store.
Speaking on similar lines, Dinaz Madhukar, Senior Vice President, DLF Emporio & DLF Promenade says: “The luxury segment was earlier restricted to traditionally rich clientele, who had the knowledge and would travel the world to access these luxury brands. With the increase in urbanisation and amendments in the government’s regulations that allowed foreign retailers to invest in the country, the demand for luxury brands increased significantly. Many brands wanted to enter this market but places like 5-star hotels could only accommodate a limited number of luxury brands. That is when we realised the need for a place that would offer a diverse range of luxury brands along with bespoke services and a plush ambience to make the consumers feel at par with any international shopping destination.”
When in 2005 the government’s regulations allowed foreign single-brand retailers to invest in the country, the interest of these international luxury brands rose in capturing Indian markets.
In 2008, India’s first luxury mall—DLF Emporio—opened doors to names like LVMH, Christian Dior, Fendi, Canali, Hugo Boss, Salvatore Ferragamo, Giorgio Armani, Emporio Armani, and many other luxury brands including Indian designers like Tarun Tahiliani, Rohit Bal, Manish Arora, etc. DLF Emporio was designed with the sole purpose of offering pure luxury shopping experience for its esteemed customers that caters to their needs at par with international standards.
Louis Vuitton is one of the best stores in terms of performance. Being the flagship store at DLF Emporio, it grabs the interests of people and has been doing well since the opening of the store,” informs Madhukar.
Sharing his thoughts, Rajendra Kalkar, President (West), The Phoenix Mills Limited says: “The luxury segment, synonymous to its name, had been restricted in its reach to the elites and crème de la crème of society. However, with changing disposable incomes and evolved tastes of shoppers, the demand for luxury brands has spread far and wide. Pioneering in bringing the best of international retail in the country, High Street Phoenix designed Palladium to meet consumer aspirations for super exclusive and coveted luxury brands. The success of Palladium reflects that these luxury brands have seen and are savouring this potential of being present in the reach of a wider audience and in a more competitive market location.”
“Palladium was one of the key expansion projects for this flagship property of The Phoenix Mills Limited. While international brands were benefiting from their presence in one of the oldest and premium malls in the country, the demand for luxury segment was getting a boost from all sources and the market was quite experimental at that junction. Complementing the concept of a luxury hotel in the city, it was a natural process to enhance retail for this new audience from across the globe as a part of a forward integration into this mixed-use development,” he elaborates.
“Moreover, before we launched Palladium, we wanted to ensure that people were ready for such a capital-intensive project, keeping the strategy intact to adapt with the growing market. On 26 September 2009, we launched Palladium to a global audience and have been enthralled by the growth and success achieved year on year,” he adds further.
Highlighting on the best performing stores, he says: “While it is difficult to single out the best, we do have star performers like Gucci, Bottega Veneta, Chanel, Tod’s, Jimmy Choo and Ermenegildo Zegna amongst the top successful brands in the country and in Palladium.”
Quoting the similiar views, Uzma Irfan – Director, Prestige Group, says, “In recent years, India has caught the eye of the international luxury market and they are looking to expand presence here in a large way. The average middle-class household is increasingly brand-conscious and does not shy away from spending a sizable portion of their income on luxury brands. This is being seen especially in the jewelry and fashion sectors. The increasing spending power of the middle-class is an added factor.”
Adding further Irfan says, “An interesting approach that international luxury brands are taking to enter the country is addressing the young, affluent crowd in India. Brands like Zara, Hidesign, Mango and many others of the same category are increasingly targeting a younger crowd.
As a supplement to the already growing luxury market, several brands have taken to online sales as a means of connecting to their customer base. Online luxury retailing is coming of age, but the experience of retail luxury sale still retains its sheen. Luxury retailing may be said to be in an expansion stage right now. But despite the various challenges, a large number of brands are waiting to make an entry into Tier – I cities, which is home to most luxury product buyers.It may be a while before India sees a high street of luxury retail as in other countries, but we are definitely heading towards it in the long term. “
Challenges for luxury malls
As per Kalkar: “Luxury retail in India is witnessing a strategic growth. The brands are open-minded and are exploring the best segments; and so are real estate giants. Complementing this growth, the income consolidations, also, are far well distributed relative to the accessibility of these brands within the country. However, the supply chart is evolving slowly as the projects are capital intensive and have longer gestation period, thereby raising the risk for marginal players and new businesses. Only serious players like The Phoenix Mills Limited have been able to achieve success in this sector.”
However, as per Madhukar: “Luxury products demand quality and experience. As India’s finest luxury destination, we only house top-end luxury brands that offer exquisite products and bespoke experiences to our patrons. The most important factor that differentiates luxury from premium malls is the quality of the products along with the overall experience of the customer. DLF Emporio houses pure luxury brands like Louis Vuitton, Dior, Tarun Tahiliani, Rohit Bal, etc., which offer couture collection and limited edition products whereas premium malls have premium brands like Mango, Zara, Forever New and bridge-to-luxury brands like DKNY, Calvin Klein, Sephora, etc. offering products which are more accessible.”
“The challenges faced in successfully running a luxury mall include both the right tenant mix along with offering personalized services to the customers. We at DLF Emporio strive to extend an uber luxurious atmosphere right from the time a guest steps into the mall. We offer exclusive services like hands-free shopping, made-to-measure, concierge services, access to new couture collection, sales preview, in-store activities, digital look-books, social media updates, and many more to assist the guests with their shopping,” she adds.
“The major factor which makes luxury and premium malls stand apart is the ‘wow factor’ one senses on entering these places. The look, the feel, and the presentation all must speak luxury. The people, how they dress, and how they behave are some of the elements that stand out and make luxury or premium malls different. Signages, store sizes with widths, and the finishes become critical to how luxury brands envisage themselves being positioned in the market,” feels Mehra.
Speaking on same Irfan raise following pointers: There are clear distinguishing factors between a luxury and premium brand, which in turn applies to malls that exclusively cater to each category. The differences are in factors such as:
Target audience – While luxury is still a niche, premium is for those who can justifiably afford it.
Price – Luxury pricing often surpasses the functional value of the product.
Distribution – Luxury brands are careful about where they place themselves and are not as commonly seen as premium brands.
Proliferation – Luxury branding is often communicated to a specific target audience.
This being said, the primary issue with luxury and premium malls remains basically the same:
High rentals for space in Tier-I cities
Need for better infrastructure within malls.
he lack of scientific mall management methods.
The Collection, UB houses some of the world’s most premium luxury brands including Bottega Veneta, Burberry, Canali, Corneliani, Crabtree & Evelyn, Davidoff, Diesel, Diani Jewels, Emporio Armani, Estee Lauder, Ethos Summit, Hackett, Hartmann, Imagine, Jimmy Choo, Lalique, Lladro, Louis Vuitton, Minawala, Michael Kors, and many more.
Key differentiators of luxury mall
Kalkar shares: “Luxury brands in India have grown strategically over the years with a choice of locations, keeping the vicinity and accessibility as the key factors to decide upon their store:
The number of audience with high disposable income is constantly entering the circle of customers of luxury brands.
Mumbai and Delhi have seen the entrance from maximum luxury stores and they contribute to the maximum of sale consumption values achieved from luxury retail in India.
Unlike other brands, adaptation of products by luxury brands is limited to the international styles and trends, and not just dependent on local audience.”
“Most luxury brands define the best of international hospitality and retail. Key and successful brands like Gucci, Burberry and others focus beyond retailing their product; they sell an experience to their patrons. A premium and bridge-to-luxury brand, on the other hand, would display world-class products and behaviour but is self-differentiating with the strategies adopted in the retail experience a customer can appreciate at their stores,” he adds further.
Malls seeking reforms
Despite enormous growth potential, the number of luxury malls in India is quite limited. “India is one of the world’s most desirable markets for luxury goods manufacturers and investors. The existing global brands are also expanding their stores by investing more money, while some companies are changing their joint venture partnerships to increase their presence. A number of issues, including taxation policies, poor infrastructure and lack of premium space are making it difficult for luxury brands to operate effectively in the country. Considering all these challenges, we have already put in motion the construction of another luxury mall in Chankyapuri in association with New Delhi Municipal Council (NDMC) to create an opportunity for new luxury entrants in the country and boost luxury retail in India,” adds Madhukar.
According to Kalkar: “Retail and the retail real estate sector is booming manifold and some reforms will go a long way in boosting this growth, such as allowing 24-hour and 365-day operations to malls, much awaited implementation of GST, easier and more flexible FDI norms, reduction in the number of license requirements to operate the business, and less red tape intervention.”
Clearly, luxury as a category has tremendous growth potential and time is not far away when India would witness more such luxury retail destinations to make luxury accessible to all. No doubt, upcoming luxury retail projects like Alcazar will see a bright future.