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Business News/ Industry / Retail/  Rise of the uber-rich drives luxury brands in India

Rise of the uber-rich drives luxury brands in India

  • LVMH, Hermès and Christian Dior clocked sharply higher India sales in 2023, as connoisseurs of apparel, bags and accessories flocked to local stores

In 2023, a majority of Christian Dior’s business in India came from leather goods, with bags and shoes worth 102.1 crore sold.

Luxury brands LVMH, Hermès and Christian Dior clocked sharply higher India sales in 2023, as connoisseurs of apparel, bags and accessories flocked to local stores after the covid pandemic ruined foreign travel. Alongside, a clutch of luxury malls came up in top cities, designed to serve the wealthy and the well-travelled.

Luxury brands LVMH, Hermès and Christian Dior clocked sharply higher India sales in 2023, as connoisseurs of apparel, bags and accessories flocked to local stores after the covid pandemic ruined foreign travel. Alongside, a clutch of luxury malls came up in top cities, designed to serve the wealthy and the well-travelled.

Louis Vuitton India Retail Pvt. Ltd, the Indian unit of LVMH instantly recognizable with its LV monogram and Damier check patterns, clocked over 719 crore sales in FY23, up 33% from the previous year’s 539.28 crore . Net profit rose 37% to 140 crore, up from 102.4 crore in FY22. In FY20 and FY19, its net profit had stood at 25.3 crore and 16.1 crore, respectively, filings with the Registrar of Companies, accessed through business information platform Tofler showed.

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Louis Vuitton India Retail Pvt. Ltd, the Indian unit of LVMH instantly recognizable with its LV monogram and Damier check patterns, clocked over 719 crore sales in FY23, up 33% from the previous year’s 539.28 crore . Net profit rose 37% to 140 crore, up from 102.4 crore in FY22. In FY20 and FY19, its net profit had stood at 25.3 crore and 16.1 crore, respectively, filings with the Registrar of Companies, accessed through business information platform Tofler showed.

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 175.4 crore the previous year. It clocked a profit of 54.3 crore, up 31% from the previous year’s 41.4 crore. In FY19, it had recorded revenue from operations of 109.6 crore and a net profit of 18.7 crore. Hermès keeps a very limited production line, controls distribution, and sells exclusive bags like the Birkin and Kelly, all at steep price tags.

Similarly, Christian Dior, which retails under Christian Dior Trading India Pvt. Ltd, reported revenue of 183.22 crore in FY23, up 20% from the previous year’s 152.6 crore. However, profit fell to 32.13 crore from 35.59 crore in the previous year, as expenses rose. In contrast, the company had clocked a net loss of 26.7 crore in FY19. In 2023, a majority of its business came from leather goods, with the company selling 102.1 crore worth of bags and shoes. It sold ready-to-wear products of 21.7 crore and accessories worth 12.7 crore.

“Indian luxury is still running on the covid halo led by millennial and Gen Z buyers, a lot of whom are now buying in India and not just abroad," said Raahuul Kapoor, founding partner, Luxury Ampersand Frolics, a luxury retail company and consultancy. “Buyers are using these luxury brands to define themselves, though a lot of the money for these purchases is still coming from Gen X (the demographic cohort following the Baby Boomers and preceding millennials or the parents of these generations)," Kapoor said, adding that LV’s India success could have been helped by its online shopping vertical.

According to Euromonitor International, India’s luxury goods market is among the world’s fastest-growing, projected to reach $8.5 billion in 2023, up $2.5 billion from 2021. India has witnessed a remarkable rise in the number of ultra-high-net-worth Individuals—individuals with net assets exceeding $30 million. This affluent class possesses significant disposable income and a growing appetite for luxury goods and experiences.

“A lot of the sales are now happening from towns that were earlier not even considered by these brands. There has been rapid growth in the number of buyers, too. The evolved or the ‘old money’ rich, on the other hand, are moving to ‘quiet luxury’ where they want to showcase their brands less and less with fewer logos and monograms, for instance, brands like Stefano Ricci and Brunello Cucinelli, which are also experiencing 200 times the growth they were during covid," Kapoor of Luxury Ampersand Frolics added.

On 7 December, Mint reported that a dozen luxury brands were close to opening their first India stores, or looking to scale up their presence in the country, including Dolce & Gabbana, Golden Goose, Balenciaga and Jacquemus. The growth has also been aided by the rise of luxury malls in top cities.

ABOUT THE AUTHOR

Varuni Khosla

Varuni serves as a Senior Assistant Editor at Mint. Her responsibilities encompass crafting compelling narratives that take a deep dive into hospitality companies, the business of art, luxury brands, the intricacies of the business of sports, advertising and marketing landscapes, gaming insights, tourism and travel industry trends. She also covers alcohol commerce. She is skilled at communication, meticulous research, and insightful analysis keeping contemporary shifts and advancements within the lifestyle and business domains at the heart of her work.
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