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Luxury Retail Market
Luxury Retail Market
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Luxury market in India Expected CAGR
(2008-13)
2007
100% = Euro 3.5 bn
Luxury Retail Growth
Luxury Services
(Spas, Luxury hotels,...) Billion Euro
30% 25%
21% 2.4
33%
Luxury
Retail
17%
25% 0.8
Luxury 0.6
Assets (Cars, 62%
luxury homes,
Yatchs)
18% 2007 2008E 2013E
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Population by Income class; Millions of people CAGR 2007-12
•Primary consumers
of luxury goods
1,203 1.3%
•Exposed and aware
of the world-class
3.7 13% living
1,117
1,115
Luxuriented 2.0
( > USD 100K) 1.8 21.5 15% •Current focus on
9.3 10.7 luxury assets and…
Future Potential
(USD > 50K) •…aspirational
brands (Guess,
Tommy Hilfiger)
Others 1,178 1%
1,104 1,104 •Moving towards
(< USD 50K)
‘Bridge Segment’ in
luxury retail
Source: EIU, NCAER, Market reports, News clippings, Value Partners Estimates
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NOT EXHAUSTIVE
17**
8*
$ $ "
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Fashion Weeks
• Two big fashionista gatherings
- Wills Lifestyle India Fashion Week
- Lakme India Fashion Week
Indian Designers
• Increasing visibility in the global fashion arena
- Rina Dhaka’s creations appeared in Marie Claire
and Vanity Fair
- Anamika Khanna,Manish Arora showcase their
work at the Paris Fashion Week
Sabyasachi Manish Arora Tarun Tahiliani Rina Dhaka
Mukherjee
Fashion Magazines
• Play an important role in generating awareness
of luxury products from a global perspective
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Attitude • “Old money” consumers with inherited wealth are already luxuriented and
are increasingly showing a “European attitude” towards luxury
towards
- Subtle / ‘Brand Invisibility’ : luxury is about “knowing, not showing”
luxury goods - Exclusive designs and brands; afficionados of Prêt-à-Porter brands
$ #$ % &
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Protected areas Shopping areas New urban areas
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• Primary luxury retail • Do not offer the ambience • Recent phenomenon with
destination in India: 80-90% and exclusivity desired by malls opening in Delhi
of luxury retail POS the luxury customer (Emporio) and Bangalore (UB
• Restrictive environment • Some multi-brand stores City)
with limited footfalls and (Thanks, Kimaya, …) present • New malls planned in
visual impact in Mumbai and Delhi Mumbai and Delhi
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EXAMPLES IN
! $ $ #
! MUMBAI
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!
( $ !
Promiment “Luxury streets” globally Prominent High streets in India
5th Avenue, Colaba
New York Causeway,
Mumbai
• Destination for luxury customers: modern • Uninviting for the luxury customer: cluttered,
ambience and atmosphere, good climate, “mixing overcrowded, “mixing with commoners”,
with elite” unsuitable climate conditions (hot and humid !)
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! $ $ $ $
& ) '
UB City, Bangalore DLF Emporio, Delhi
‘Collection Mall’ Boss store in
Exterior DLF Emporio
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( MONO BRAND
STORES IN
! MUMBAI HOTELS
Euros, % of revenues
Europe India
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! $
$ $ & '
Delhi Cities Luxury ready cities
Luxury ready by 2010-11
•80-100 mono-brand stores
Luxury ready by 2015-20
) #
$ $ $
Key Success Factors Description
• Treat the market as a long term opportunity and not as “the flavour
of the month”
Have a long term - - Be prepared to bear losses in the short-run and continue
Commitment / investing
investment view
• Strong organizational commitment by assigning a senior manager
to work with established local team
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