Post date: Apr 16, 2013 11:51:13 AM
Reuters Business Video Report - A fully loaded Aston Martin Vanquish - one of the latest objects of desire for India's uber-wealthy.
These people aren't daunted by hefty taxes, bumpy roads...or the occasional roadside companion.
Ultra-fast cars and champagne-popping parties are becoming the norm in a culture that is increasingly choosing to live the good life. LUXURY BRAND SHOPPER, ALPANA KIRLOSKAR,
"For a special occasion - you know going out for a party or a special occasion - you like to feel good, and you like to be happy. It gives you more confidence if you wear a branded item."
Bain & Co estimates that India's $6 billion luxury goods market is growing at 15-20% every year.
Not to mention that experts expect India to be the 5th largest consumer market by 2025 as the middle class and their incomes grow.
And that's music to the ears of luxury brands as slowing growth and a crackdown on conspicuous consumption dent spending in the crucial Chinese market.
Worries about Chinese demand have weighed on shares of luxury goods makers like Mulberry and Burberry among others.
So glamourous names like Bottega Veneta and Christian Dior are moving to expand their Indian footprint in a country with over 1.2 billion people and an estimated 120,000 high net worth individuals.
Hermes even produced a line of sarees exclusively for the Indian market that sold for up to 8400 dollars a pop.
Chanel's Karl Lagerfeld has also made efforts to woo India's big spenders with aParis-Bombay collection launched late last year.
But can Indians dethrone the Chinese as the new kings of bling? Not anytime soon, says Wealth-X CEO, Mykolas Rambus.
CEO, WEALTH-X, MYKOLAS RAMBUS,
"As best we can tell, the consensus looks like China's is about fifteen times larger-sized luxury market than India. So, much bigger. And it's going to take a long time to catch up."
Genesis Luxury, a distributor backed LVMH's private equity arm, has ambitious expansion plans but also sees serious challenges.
Brands in the Genesis portfolio include Jimmy Choo and Armani among others.
MANAGING DIRECTOR, GENESIS COLORS, SANJAY KAPOOR,
"We will open about twenty to twenty-five new stores this year across a series of brands. We have about 15-20 brands. The large challenge with a lot of brands that come to India is the availability of the right retail space or the right infrastructure. There is just not enough infrastructure available. As that improves over time, the few brands that have not come into India will come in, too."
REUTERS REPORTER, SAREENA DAYARAM,
"So India's wealthy will continue to spend freely, and more brands will come in. But the message is loud and clear - India's not about to replace China as the luxury promised land."