"China Is Now in Its Final Stage"... Luxury Brands Going All In on 'I Nara' Where Emerging Rich Gather

Striving to Captivate India's Emerging Wealthy
"Indian Luxury Market to Grow to $200 Billion by 2030"

Luxury brands are focusing on India. Luxury brands, which had lost momentum due to the economic downturn in China, a major player in the global luxury market, are moving quickly to capture the Indian market.

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On the 7th (local time), India's leading economic newspaper, The Economic Times, reported that Indian spending on overseas luxury goods surged by 250% in the first quarter of 2024 compared to the first quarter of 2019, five years ago. This figure far surpasses the 200% increase in spending on dining and transportation and the 150% rise in accommodation costs during the same period.

The area near the Taj Mahal Palace Hotel, considered the commercial center of Mumbai, India, is emerging as a "luxury brand village," with soaring rental prices. In November last year, Mukesh Ambani, Asia's richest man, opened 'Gio World Plaza,' Mumbai's premier luxury shopping center the size of 10 football fields, housing 66 global luxury brands including Louis Vuitton, Gucci, Dior, Balenciaga, Saint Laurent, Versace, and Tiffany. Among these, Tiffany, Versace, and Bulgari made their first entry into India.

Another Indian conglomerate, Aditya Birla Group, signed a partnership agreement with the French department store chain Galeries Lafayette to open department stores in Mumbai and Delhi. It is reported that more than 200 luxury brands will be handled there.

Boston Consulting Group announced that "India generated $588 billion in financial assets in 2023," and UBS predicted that the number of millionaires in India will reach 1.06 million by 2028. According to Euromonitor International, the Indian luxury market is expected to grow at an annual rate of 12%, reaching a size of $50 billion by 2026. Bain & Company forecasted that the Indian luxury market will reach $200 billion by 2030.

Companies are also moving quickly to attract the attention of India's emerging wealthy class. Gucci of the Kering Group selected an Indian, Alia Bhatt, as a global ambassador for the first time last year. LVMH's Louis Vuitton appointed Indian actress Deepika Padukone as a global ambassador in May 2022. This was the first time Louis Vuitton chose an Indian.

Downsizing in China amid worsening performance

Recently, due to the economic slowdown in China, a major consumer, demand for luxury goods such as handbags has decreased, causing major companies like Louis Vuitton and Gucci to suffer from deteriorating performance. This decline is likely to be prolonged, prompting companies to rush into downsizing. Most are securing funds through equity sales, workforce reductions, and scaling back non-core businesses as survival strategies.

Chanel is planning large-scale layoffs at its Chinese subsidiary. Some departments are considering layoffs of up to 50%, and hiring plans have been completely halted. French luxury conglomerate LVMH, which owns high-end brands such as Louis Vuitton, Dior, and Celine, is also implementing cost-cutting measures in anticipation of profit declines. At the end of September, it divested its stake in the streetwear brand Off-White, withdrawing from lower-priority businesses.