NEW DELHI // Laleh Busheri used to take two trips a year to New York's high-end shopping district on Fifth Avenue, well known as one of the most expensive shopping destinations in the world. But not any more. Now Ms Busheri, an editor in Mumbai for the lifestyle magazine Preview Asia, can find every luxury item she wants in her home city. In the past couple of years, makers of luxury goods have flocked to India.
"Instead of going to Bloomingdales, you can now go to Palladium [in Mumbai]," she said. "There's no dearth of luxury brands there." Brands such as Cartier, Christian Dior, Louis Vuitton, Armani and Versace are among the retailers that have entered India in the past two years to chase the country's growing class of super rich. Asia is fast emerging as the world's largest market for luxury brands, accounting for as much as half of the total US$80 billion (Dh293.84bn) global luxury industry.
Data from Luxurion World 2009, a trade event focused on the luxury market that was held in Mumbai last November, showed that India's luxury market is worth about $4.35bn and should grow to $30bn by 2015. "The luxury retail sector in India is at an all-time high," said Mark Stepen, a consultant with the India Retail Forum who specialises in retail brand management. "This will be the next hub of luxury goods consumption."
The World Wealth Report 2008, produced by the international IT and management consultancy Capgemini, said that India had 167,000 millionaires and that the number was growing steadily. The number of Indians with more than $1 million in net assets grew by a roaring 22 per cent in 2008 on the previous year, despite the recession. Additionally, 141,000 Indians belong to the so-called "super rich" category, earning more than 10m rupees (Dh797,286) a year.
A 2008 survey by the global management consultancy AT Kearney said Indians spent as much as $2.9bn on private jets, luxury homes, cars, yachts and art. They spent $953m more on luxury services and $377m on other high-end goods. The luxury boom has debunked the myth that India is a rapidly growing market only for fast-moving consumer goods because of its conspicuously consuming middle class; that middle class accounts for less than 30 per cent of India's 1.2 billion people.
The country's "super rich" are a monied class largely comprising entrepreneurs, wealthy farmers and political middlemen whose fortunes depend on the domestic economy, which grew at 7 per cent even during the slowdown. "Recession or no recession, there is no arguing the fact that there are Indian consumers with very fat pockets," Mr Stepen said. His research shows that Lladro, a Spanish company dealing in exclusive porcelain figurines, grew by 75 per cent in the past financial year, while international brands such as Swarovski and Art d'Inox, dealing in crystals and home lifestyle products respectively, have grown by 25 per cent each.
New Delhi's plush Emporio mall, which houses high-end luxury brands such as Louis Vuitton, Versace, Cartier, Dior and Jimmy Choo, opened during the slowdown in 2008. Emporio, a multimillion-dollar investment by DLF, India's biggest property firm, is one of the grandest malls in India. Its glass doors swing open into large oval atriums decorated with crystal chandeliers, fountains and pillars. The fittings on the three floors are burnished wood, etched glass and brass.
Prem Dewan, the brand head for Versace Collection, which owns two stores in Emporio, says the investment has been totally justified, although some of India's newly rich have cut back spending. Versace Collection's business slowed by as much as 20 per cent, he said. But as the economy returns to growth, the recovery in business is swift, he says. In the past two months alone, business has grown by 15 to 20 per cent, and the company is considering expanding.
"For luxury retailers, the sky is the limit in India," Mr Dewan said. @Email:firstname.lastname@example.org