Companies
From watches to bejewelled lighters, India catches the fancy of luxe labels
Summary
China's deepening slowdown is forcing the world's costliest brands to look towards its southern neighbour, home to 849,000 US dollar millionaires, according to the UBS Global Wealth Report 2023.
India's expanding base of uber-rich consumers and China's deepening economic slowdown have prompted global purveyors of opulent lifestyle to make a beeline for the fast-growing South Asian nation that's on course to becoming the world's third-largest economy.
Swiss luxury watchmaker Gerald Charles SA's chief executive Federico Ziviani was in Mumbai on 13 September to mark his company's entry into India, in partnership with Himachal Pradesh-based Ethos Ltd, which operates more than 60 high-end watch boutiques across the country.
The family-owned watch company, which counts Indian cricket team captain Rohit Sharma among its fans, is known for its exclusivity. It crafts only 1,600 exquisite timepieces annually.
Ziviani is confident that India will have a big enough market for the bespoke, handcrafted watches, which sell for ₹21-50 lakh.
As are other upscale brands.
As India's annual festival season looms, a bevy of new luxury and bridge-to-luxury brands are on the prowl for the country's affluent consumers.
New luxury market
China's deepening slowdown is forcing the world's more premium brands to look towards its southern neighbour, home to 849,000 US dollar millionaires, according to the UBS Global Wealth Report 2023.
Last week, just around the time Gerald Charles was launching, Titan Co. Ltd-owned Helios Watch Store brought in Italian bridge-to-luxury watch brand U-Boat to India.
In just the first seven months of 2024, watches worth Swiss Franc 139.5 million (about ₹1,375 crore) were imported into India—20% and 41% more than in the same periods of 2023 and 2022, showed data from the Federation of the Swiss Watch Association.
To be sure, some of this increase in value could be a result of the rupee weakening against the Swiss Franc. One Swiss Franc is now ₹99.5, compared with ₹77.8 in 2022.
U-Boat's founder, Italo Fontana, who was in Delhi for the launch, told Mint that the business is now focusing on geographies like India and West Asia because of tepid demand in China.
In October, French accessory brand S.T. Dupont will launch in Mumbai and Delhi.
Also Read: Luxury brands Hublot, Baccarat, others pull out all stops for an Indian festival
Existing brands, too, are looking for more space and presence in India, whose luxury goods market is expected to reach about $30 billion by 2030, according to management consulting firm Deloitte India.
On 17 September, luxury watch brand Franck Muller launched its first mono-brand boutique in Delhi’s plush DLF Emporio mall.
“Luxury watches in the range of ₹3.5-8 lakh have become highly giftable. This could be why many watch brands that already had a presence in India by way of shop-in-shop models through local retailers are expanding with their own flagship/exclusive outlets," Pushpa Bector, senior executive director and business head of DLF Retail, told Mint.
“There is a lot of interest from women and men looking to wear bejewelled watches as statement pieces. This is also driving up sales in general for the category," she added.
Also Read: Rolex to Hublot: Indians find more time for Swiss luxury
It's not surprising that Ethos announced a partnership with another Swiss watchmaker, Hautlence, on 18 September.
Ethos has witnessed strong growth since its listing in 2022. It earned ₹998 crore in 2023-24, over 25% more than in 2022-23. Net profit rose to ₹82.8 crore in FY24, 37% more than FY23's ₹60.1 crore.
Several other watch brands, including Breitling, Breguet, Jacob & Co., Rolex, and Franck Muller, have opened or are in the process of opening their flagship stores at DLF's two luxury malls in India's national capital.
Products are ready to ship from France for S.T. Dupont, which makes high-end bags, watches, lighters and other accessories. Its bejewelled lighter can set you back by as much as €125,000, or ₹1.1 crore, and its Tiger pen by €88,000, or ₹81 lakh.
This will be S.T. Dupont's second entry into India; the first was about a decade ago, in 2015, when the luxury market was still nascent.
“This time, we will not be rushing," said Sara Taha, S.T. Dupont's area manager for the Middle East, Turkey and India. “India is a key market in the luxury industry, which we unfortunately had to leave several years ago. We have now found the right partner to make our return. We will provide our existing loyal customers and prospective customers a tailored service," she added.
Also Read: Rise of the uber-rich drives luxury brands in India
The company is making its way into India with Delhi-based Luxury Ampersand Frolics, which offers consultancy services to luxury brands.
Raahuul Kapoor, Ampersand's founder, said they had seen a continuous increase in cigar sales, along with the demand for accessories. “Price seems to be less of a barrier this year in luxury consumption, and quality seems to be back in focus," he said.
Expanding middle class
India's GDP grew 8.2% in FY24. As the country's economy grows, so does its middle-class and consumer spending. Deloitte economists estimate that one in four Indian households currently belongs to the upper middle-income ($4,000 to 8,500 per household) and high-income ($40,000 and higher) segments. It is expected that by 2030, one in two households will be in those two segments.
This is supported by the UBS Global Wealth Report from 2023, which shows that, on average, wealth per adult in India rose by 8.7% per year since 2000 and reached $16,500 at the end of 2022.
Earnings of some of the luxe labels operating in the country bear testimony to the same.
Also Read: New face of luxury: Younger generation leads in high-end shopping
Louis Vuitton India Retail Pvt. Ltd, the Indian unit of Paris-based LVMH, clocked over ₹719 crore in sales in FY23, up 33% from FY22. Its net profit rose 37% to ₹140 crore, up from ₹102.4 crore in FY22.
Rival Hermès, which runs its India business through a local partner under Hermes India Retail and Distributors, reported 42% higher sales at ₹249.4 crore in FY23, against FY22's ₹175.4 crore. Its profit stood at ₹54.3 crore, up 31% from the previous year’s ₹41.4 crore.
Similarly, Christian Dior, which retails under Christian Dior Trading India Pvt. Ltd, reported a 20% year-on-year rise in revenue to ₹183.22 crore in FY23 over FY22's ₹152.6 crore. However, its profit fell to ₹32.13 crore from ₹35.59 crore in the previous year due to high expenses.
