LVMH, Gucci to expand in India with new outlets in Reliance’s luxury mall
Luxury brands such as Gucci, Cartier, and Louis Vuitton are capitalizing on India’s robust economic growth and the rapid increase in the number of millionaires by signing leases for stores in Mukesh Ambani’s new Mumbai mall. This upscale shopping destination, known as the Jio World Plaza, is expected to open this year and is situated within Reliance Industries’ impressive $1 billion business and cultural hub located in Mumbai’s bustling business district.
While Reliance Industries has been somewhat discreet about revealing details concerning the mall’s tenants, lease documents obtained by real estate analytics firm CRE Matrix have shed light on the presence of Burberry Group, as well as various brands owned by luxury conglomerates like LVMH, Kering, and Richemont, among others. These prestigious brands have committed to renting retail spaces in the mall and, intriguingly, have agreed to share a percentage of their monthly net revenue with Reliance, presumably as part of their lease arrangements.
The move by these luxury brands to establish a presence in the Jio World Plaza underscores their recognition of India’s growing affluence and the increasing demand for high-end products and experiences among the country’s burgeoning affluent class. As India’s economy continues to expand and more individuals achieve millionaire status, the luxury market in the country is becoming increasingly lucrative.
This development is not only significant for luxury brands but also for Reliance Industries, which is diversifying its business portfolio to encompass various sectors, including retail. By attracting internationally renowned luxury brands, Reliance is positioning itself as a prominent player in the Indian retail landscape and aiming to cater to the growing aspirations of affluent consumers in the country.
Overall, this expansion of luxury brands into the Jio World Plaza reflects the broader trend of luxury consumption on the rise in India, fueled by economic growth and a rising affluent population, while simultaneously showcasing the increasing attractiveness of India as a key market for global luxury players.
The lineup of brands committing to leases in Mukesh Ambani’s Jio World Plaza mall in Mumbai is indeed impressive. It includes renowned jewellers Cartier and Bulgari, prestigious fashion houses Louis Vuitton, Dior, and Gucci, esteemed watch brand IWC Schaffhausen, and luxury luggage maker Rimowa, which is set to open its first outlet in India as part of this expansion.
This development highlights the increasing appeal of India’s luxury market to globally recognized luxury brands. Historically, luxury brands in India often faced challenges in finding quality retail spaces, which led many to establish their initial presence within luxury hotels. However, this new wave of commitment to dedicated retail spaces demonstrates a shift towards seeking a more significant and permanent foothold in the Indian market.
The fact that Reliance Industries, Burberry Group, LVMH, Kering, and Richemont have remained silent regarding these developments suggests that the details of these agreements may be part of a broader strategy. Luxury brands are recognizing the growing demand for their products and experiences among India’s affluent and aspirational consumers. As India’s economy continues to expand and the number of millionaires rises, luxury brands are eager to establish a meaningful and lasting presence in the country’s retail landscape.
This move is not only significant for luxury brands but also for India’s retail sector, which is evolving to cater to the evolving preferences and aspirations of consumers. The presence of these prestigious brands in the Jio World Plaza is poised to create a unique luxury shopping experience in Mumbai, further enhancing the city’s reputation as a hub for luxury and high-end retail.
Overall, this development underscores the growing importance of India as a key market for global luxury players and reflects the changing dynamics of the luxury retail landscape in the country.
Louis Vuitton’s store in the Jio World Plaza will be a remarkable 700 square meters (around 7,500 square feet) in size, making it the most spacious among the brand’s four outlets in India. Cartier, on the other hand, will be opening its second store in the country, underlining the growing demand for luxury jewelry and timepieces. For Dior, the Jio World Plaza will mark its third outlet in India, emphasizing the brand’s commitment to expanding its footprint in the country’s burgeoning luxury fashion market.
To maintain the mall’s luxury appeal and attract a comprehensive roster of high-end brands, certain lease agreements have been structured with clauses that offer incentives. For example, the agreement with Dior includes a provision that allows for a 25% reduction in rent if at least four out of ten luxury brands, including Gucci, Cartier, Bulgari, and Tiffany, do not open their own outlets within the mall within six months. This approach aims to ensure a curated and premium shopping experience within the Jio World Plaza, aligning with the aspirations of India’s affluent and aspirational consumers.
India, with its vast population of 1.4 billion people, boasts the world’s largest populace. Despite the enormity of its population, the country’s per capita income stands at a modest $2,300. However, it’s noteworthy that India is also home to a rapidly growing number of individuals with significant wealth. There are more than 800,000 dollar millionaires in India who are increasingly indulging in luxury purchases, ranging from opulent homes to high-end SUVs.
Projections by real estate consultants Knight Frank paint a promising picture for India’s wealth landscape. They estimate that by 2026, India will be home to a staggering 1.4 million millionaires, reflecting a remarkable 77% increase compared to the figures from 2021. This substantial growth is attributed to the country’s strengthening economy and the expanding wealth of its affluent class.
This surge in prosperity in India stands in contrast to the economic slowdown observed in China, a trend that has persisted for several years. In China, a strong appetite for designer products had been a significant driver of sales growth for luxury brands. However, this dynamic is shifting, and the Chinese luxury market is projected to grow at a somewhat slower but still impressive average rate of 11.5% in the four years leading up to 2026. By that year, China’s personal luxury market is expected to reach $107 billion, according to data from Euromonitor.
In India, the personal luxury market is set to witness substantial growth, with estimates suggesting an annual expansion of nearly 12% between 2022 and 2026, ultimately reaching nearly $5 billion. This growth trajectory is reflective of the rising affluence in the country and the increasing aspirations of consumers who seek luxury experiences and products.
In summary, India’s economic growth is propelling a significant increase in the number of millionaires, with a corresponding surge in luxury consumption. This growth in prosperity and luxury spending in India presents a substantial opportunity for luxury brands and underscores India’s emergence as a key market in the global luxury industry. Meanwhile, in China, while the luxury market continues to expand, the pace of growth is moderating as the economy evolves.
