LVMH and Gucci Unveil Plans to Flourish in India via Reliance's Luxury Mall

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LVMH and Gucci Unveil Plans to Flourish in India via Reliance's Luxury Mall
16 Sep 2023
4 min read


News Synopsis

Leading luxury brands, including Gucci, Cartier, and Louis Vuitton, are making strategic moves to establish new stores in Mukesh Ambani's upcoming luxury mall, Jio World Plaza, situated within Reliance Industries' $1 billion business and cultural hub in Mumbai's bustling business district.

A Thriving Luxury Market in India

The expansion into Jio World Plaza reflects the growing interest of luxury brands and Reliance Industries in tapping into India's flourishing luxury market, driven by robust economic growth and a surge in the number of millionaires in the country.

Diverse Tenant Portfolio

While specific details about the mall's tenants remain undisclosed by Reliance, lease agreements obtained from real estate analytics firm CRE Matrix reveal that several prestigious brands owned by LVMH, Kering, and Richemont have secured retail spaces in the mall.

Notable brands include iconic jewellers Cartier and Bulgari, renowned fashion houses Louis Vuitton and Dior, high-end watchmaker IWC Schaffhausen, and luxury luggage manufacturer Rimowa, which is poised to open its debut Indian outlet.

Revenue-Sharing Agreements

As part of their agreements, these luxury brands have committed to sharing a percentage of their monthly net revenue with Reliance, ranging from 4% to 12%. The exact terms and conditions of these arrangements were not disclosed, and Reliance, along with the mentioned brands, has not commented on this matter.

A New Era for Luxury Retail in India

Traditionally, luxury brands in India faced challenges in securing premium retail spaces, often resorting to establishing their initial outlets within luxury hotels. However, this shift towards Jio World Plaza signifies a desire for more prominent and meaningful brand presence within the Indian luxury retail landscape.

Spacious Louis Vuitton Outlet

Louis Vuitton's store in Jio World Plaza is set to be an expansive 700 square meters (7,500 square feet) in size, making it the most spacious among the brand's four outlets in India. Cartier will be opening its second store in the country, while for Dior, this will mark its third outlet.

Ensuring Luxury Appeal

To maintain the mall's luxury appeal, some lease agreements, such as Dior's, incorporate clauses allowing for a 25% reduction in rent if at least four out of ten specified luxury brands, including Gucci, Cartier, Bulgari, and Tiffany, do not establish their outlets in the mall within six months.

India's Rising Affluence

Despite a per capita income of approximately $2,300, India boasts over 800,000 dollar millionaires who actively invest in various luxury segments, from opulent residences to high-end SUVs. Knight Frank predicts that India will witness a surge in millionaires, reaching 1.4 million by 2026, marking a 77% increase compared to 2021.

A Lucrative Luxury Market

Euromonitor estimates the personal luxury market in India to grow at nearly 12% annually from 2022 to 2026, reaching nearly $5 billion. This growth underscores India's emergence as a key luxury market, in stark contrast to China's slowing economy, which had previously driven significant sales growth for luxury brands.

China's Luxury Market Comparison

While India's luxury market is on a robust growth trajectory, China's personal luxury market is expected to expand at an average rate of 11.5% between 2022 and 2026, reaching $107 billion, according to Euromonitor data. This juxtaposition highlights India's potential as an increasingly influential player in the global luxury industry.

TWN In-Focus