French luxury brands eye Indian market

30th March 2007, Comments 0 comments

NEW DELHI, March 30, 2007 (AFP) - India may not be seen as the easiest place to sell a 1,000-dollar handbag, but top luxury brands from France say the country holds the key to a major boost in global sales.

NEW DELHI, March 30, 2007 (AFP) - India may not be seen as the easiest place to sell a 1,000-dollar handbag, but top luxury brands from France say the country holds the key to a major boost in global sales.

The per capita income in India hovers just above 700 dollars, according to the World Bank, but with a one-billion-plus economy, increasing numbers of people are crossing into the category of super-rich.

India now has the highest number of billionaires in Asia, accorded to Forbes magazine, and approximately 1.6 million households earn more than 100,000 dollars a year, making them all potential customers of luxury goods.

"Right now the numbers are very marginal. But India is one of the markets where growth will be exponential," Damien Vernet, general manager for Louis Vuitton in the Middle East and India, told AFP on Thursday.

"We're very happy with our numbers in Europe but the future is in places like India, the Middle East, China, Eastern Europe."

Vernet, as well as other top officials of French brands represented on the Comite Colbert, an association of some 70 luxury houses, was in India ahead of a two-day luxury goods conference beginning Friday.

The Indian luxury market is currently thought to be worth some two billion dollars and is growing at some 20 percent a year, according to figures from India's main trade federation FICCI.

According to retail consultancy Technopak, which last year surveyed some 4,000 affluent consumers across the country, the market in India could potentially be worth up to 14 billion dollars a year.

The consultancy said there were 1.6 million families who could spend up to 9,000 dollars on items including fashion goods and jewellery.

Xavier Bertrand, managing director for Chanel in India, said the company had recorded sales growth of "between 40 and 50 percent" last year, and will next week open its fifth Indian store in the southern high-tech hub of Bangalore.

"What makes India unique is a young population that also aspires more and more to luxury products," Bertrand told AFP, adding that he expected to see similar growth figures for the next three to four years.

Part of the change is cultural, with many of the young, who have come of age during the economic liberalisation of the 1990s, eschewing the independence struggle-inspired "buy Indian" ethos of their parents and grandparents.

"I would like to call it traditional modernism," said Shimul Mehta Vyas, head of India's top fashion school, the National Institute of Design, at a pre-conference event.

"On the one hand we still uphold our traditional culture but on the other hand we aspire to be global consumers."

But the retailers said it is sometimes difficult to find the right location for their stores.

Currently many companies sell in five-star hotels, with some venturing out to top malls, but stay away from the "high street," with most markets even in urban India a chaotic scene of crowded small shops on potholed roads.

"There is a lack of selective retail environments," said Vernet, whose company has two shops in India, both in top hotels.

"If it was not for that obstacle we probably would have a few more stores in India."

But unlike lower-end global American brands such as McDonald's -- which in India serves spicy concoctions of mashed potato and cottage cheese for the largely vegetarian population -- the French say they will not "Indianise."

"What we propose is Chanel style, whether you like it or not. If you don't like it, don't buy it," Chanel chairman Francoise Montenay, who also heads the board of the Comite Colbert, told AFP.

Copyright AFP

Subject: French news

 

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