NEW DELHI: Luxury goods makers are generally optimistic about their future in India, but finding appropriate retail space remains problematic, according to industry experts.
"The critical issue is the lack of right retail spaces and environment," Darshan Mehta, president and CEO of Reliance Brands, an importer of luxury fashion, told Livemint.
"If luxury sector growth in India has to escalate, it has to look beyond same-store sales and set up new stores at the right places. That's how it grew in China," he added.
A report published by Reliance Brands earlier this year and cited by Livemint claimed that there were only three malls in India as a whole that could be thought of as luxury shopping destinations, as they had the right mix of ambience, brands and location.
Mehta's comments were echoed by a property consultant. "We keep getting queries all the time, but the right opportunity and space is always a concern," said Pankaj Renjhen, managing director for retail services at Jones Lang LaSalle.
One consequence of this may be that the luxury goods sector takes a back seat to experiential luxury.
Amitabh Mall, a director at Boston Consulting Group, noted that the relaxation of foreign investment restrictions had "definitely heightened the interest of global brands in the Indian market" but this would take time to feed through. In the meantime, he suggested, hotels and spas would benefit.
Others take a different viewpoint. Jaideep Wahi, director of retail services at Cushman & Wakefield, a real estate consultancy, said there was no luxury market if services were excluded.
Wahi also argued that, for the Indian luxury consumer, choice was limited and that because of customs duty there was no price parity between India and overseas.
Data sourced from Livemint; additional content by Warc staff