Hermès Flagship, Mumbai | Source: skyscrapercity.com

In our second article this week focused on India, we investigate the barriers impeding the growth of India’s international luxury goods market, which go beyond the recently lifted restrictions on foreign direct investment.

MUMBAI, India — “By the end of 2015, emerging markets should account for more than 50 percent of luxury sales,” Antoine Colonna, a luxury analyst at the asset manager Carmignac Gestion in Paris, told The Wall Street Journal in the spring of 2011. “This isn’t evolution. It’s revolution,” she continued.

But in India, the revolution has yet to take hold. Despite having the world’s second-fastest growing major economy and a rapidly expanding population of high net worth individuals, the country’s market for international luxury goods, worth around $1.3 billion, remains surprisingly small. In fact, while China currently accounts for an estimated 10 percent of the global luxury market, India makes up a mere 1 to 2 percent.

So why has India’s market for international luxury goods failed to take off?

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Bandana Tewari | Photo: Johan Sandberg for Industrie Magazine

PARIS, France — Bandana Tewari has made a name for herself as one of the fashion industry’s smartest commentators. As fashion features director of Vogue India, she has quickly become the go-to source for anyone who wants to learn about the country’s rapidly evolving luxury market. Recently, she was named to Industrie magazine’s Fashion Media A-list, alongside other leading fashion commentators including Cathy Horyn, Tim Blanks and Suzy Menkes.

So, I am delighted to reveal that Bandana Tewari will pen a regular column for The Business of Fashion, offering her unique perspective on the Indian luxury market, starting with this interview originally conducted for Industrie.

I sat down with Bandana in between shows during Paris Fashion Week in September to talk about India’s fast growing fashion market, tailoring luxury products to Indian sensibilities, the power of Bollywood and wearing Tarun Tahiliani saris with Manolo Blahniks.

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Front Row at Lakmé Fashion Week | Photo: BoF

MUMBAI, India – From the minute I landed in Bombay—as everyone here still calls it—the rapidly shifting nature of contemporary India was apparent. Instead of waiting in agonisingly long queues at the airport, I breezed through immigration, customs and bag collection in only 45 minutes. That’s faster than one can make it through most terminals at Heathrow or JFK these days.

Outside the airport, cranes building a new terminal towered over those waiting with signs to pick up arriving international passengers with names like Padamsee and Singh, but also Takahashi and Levine, signs of the globalisation that is quickly transforming this city into an international melting pot.

The last time I attended a fashion week in India was five years ago, so when IMG kindly invited me to attend this season’s Lakmé Fashion Week, I was curious to see how things had changed. With GDP growth racing along at a blistering 8 percent per year, and a growing sense of national pride, there were bound to be changes in India’s fashion business landscape as well.

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DLF Emporio, New Delhi | Source: DLF

MUMBAI, India — According to Forbes, India has the fastest-growing population of millionaires in the world. But for Western luxury brands operating in the country, grabbing a piece of the market has proven more difficult than anticipated and many are in the process of re-conceiving their India strategies.

Part of the problem is that Western luxury brands don’t seem to understand Indian consumers. When they first entered India, they created splashy advertising campaigns targeting the old money elite. But the results were poor, largely because this customer segment consists of frequent international travelers who overwhelmingly prefer the experience of purchasing Western luxury goods abroad, where brands offer them wider choice, better service and more competitive pricing than what’s currently available inside India.

In response, brands are starting to refocus on new pockets of wealth emerging in regional hubs across the country. But a private report on luxury in India produced by management consultants AT Kearney and The Economic Times revealed that the newly affluent lack sufficient knowledge and awareness of luxury brands to drive significant sales. Furthermore, the current strategy of establishing a large retail footprint supported by traditional mass marketing is not working.

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A piece from the Battle Royal collection by littleshilpa

We’re wrapping up BoF India Fashion Week with the wonderful story of Shilpa Chavan, a Bombay milliner whose sophisticated urban headdresses have caught the attention of Style.com and ended up at the AlSabah Art & Design Gallery in Kuwait.

MUMBAI, India — There’s no doubt that India is a treasure chest of craft and creativity. Indeed, these were the two words most heard at the recently concluded IHT conference in New Delhi, after the two words in the program title: “Sustainable Luxury”.

While the images conjured up by the word craft are often of weavers in villages or hand embroiderers in factories, to prove that contemporary craft is alive and kicking in urban India, meet Shilpa Chavan—the maverick milliner of Mumbai and proprietor of littleshilpa, her nickname and brand.

Littleshilpa is a case in point of incredible Indian creativity in need of a bit of strategic guidance and fashion business savvy. But in the subcontinent’s burgeoning fashion industry, executives with grounded commercial experience are few and far between. And so the question becomes, how does India commercialise its craft and creativity?

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