New Delhi: Ask luxury sector experts about growth in India last year and the number varies widely between 6% and 20%, depending on who you speak with.

Darshan Mehta, president and CEO at Reliance Brands Ltd, doesn’t want to hazard a guess.

“You must remember that the rupee depreciated 20% to 23% last year. Since all luxury is imported, some of this cost would have been passed on to the consumer," he said.

Reliance Brands is a subsidiary of Reliance Industries Ltd that retails top fashion labels such as Ermenegildo Zegna, an Italian luxury label specializing in men’s clothing, and Paul and Shark, also an Italian sportswear brand, in India.

Last year was erratic, said Dinaz Madhukar, vice-president at Delhi luxury mall DLF Emporio. “There were no major trends."

However, most marketing departments are bullish on India’s luxury sector, thanks to changes in government regulation and the youthful demographic profile of consumers.

Sanjay Kapoor, managing director at Genesis Luxury, estimates the Indian luxury goods market is at about €1 billion (around 7,000 crore) and is set to grow by 20% in five years. “This is an encouraging future for luxury brands in India and those planning to enter," said Kapoor. Genesis represents luxury brands such as Jimmy Choo, Burberry and Canali.

Of the 50 global leading luxury brands, 19 are present in India, said a Reliance Brands report. “India’s demographic profile and high disposable incomes, growing middle class, increasing individual wealth and

According to Mehta, there are no reversals when it comes to luxury.

“In luxury, you can only trade up," he said, adding that the India growth story is embedded in the very young, aspirational consumer.

Kapoor of Genesis agreed. “Luxury purchases are starting much younger, at high school levels... In fact India is one of the youngest consumer subsets in the world."

The report divides the luxury consumers into three categories: old money aristocracy, new money affluence and the professional elite. The first segment encompasses individuals with family wealth inherited over generations. Such consumers could be landowners, industrialists or royalty. The new money consumers could include entrepreneurs, sports persons and film stars. The professional elite group comprises CEOs, top-notch lawyers, doctors and investment bankers, among others.

Besides the aspirational consumer, relaxation in foreign direct investment in single brand retail may drive this market too.

According to Amitabh Mall, partner and director at Boston Consulting Group, the relaxation of norms in single brand retail “has definitely heightened the interest of global brands in the Indian market".

While the early entrants are exploring options to own their businesses in the country, those waiting in the wings are considering launching in India.

Mall said that although queries from European, American and even Asian brands are flowing in, “overnight conversion" is unlikely. In his view, experiential luxury is on the rise, making the market attractive to hotels, spas, salons and residences that cater to this segment.

Kapoor said his company was in talks with several international brands in the luxury and premium segment that are interested in coming to India. Mint reported on 23 January that Prada was one of these exploring an India entry.

Meanwhile, Prive Luxury, which operates the luxury wear multi-brand boutique Les Petits at DLF Emporio, is introducing the Young Versace range for children up to eight.

The boutique also stocks other global brands such as I Pinco Pallino, Fendi Kids, Miss Blumarine, Baby Dior and Simonetta.

Some of the existing brands may be looking to open more stores.

Timmy Sarna, managing director, DLF Brands, which brought Italian luxury label Salvatore Ferragamo to India in 2008, said the company was looking to add four-five stores given the right locations.

“There is definitely enough demand in the market," he said. Ferragamo has four stores in the country.

For Genesis, the new cities on the radar are Chennai and Kolkata. It opened a Jimmy Choo and a Canali store in Chennai at the new Bergamo Mall.

Critics argue that more stores does not mean that the brands are doing well.

According to Jaideep Wahi, director, retail services, at real estate consultancy Cushman and Wakefield, if services are excluded, there is no real luxury market.

The Indian luxury consumer faces two main challenges: there is no price parity between India and overseas owing to customs duty and the choice is limited.

Besides this, on the demand side, brands may not be doing enough to create awareness and India is still a very small part of the global portfolio, he said.

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