Are Brics The Savior Of The Luxury Industry?

BRIC: Brazil, Russia, India and China, the four largest emerging markets, respectively.

An entrepreneur delegation from Italy is currently attending a two day discussion on luxury goods in Mumbai.

India and China, the two Asian powers, have a huge gap in the supply of luxury goods.

According to the association's statistics, only about 30% of the 500 luxury brands in the world are in the India market.

The comparison between China and India in the luxury market is amazing. The Italy luxury industry association hopes that India policymakers will pay attention to this.

Branchini, executive director of the association, said that the problem in India is not lack of potential demand.

(other members include leather goods producers such as Salvatore Ferragamo), jewellery manufacturer Bo Miret (Pomellato), and interior design company Alaixys (Alessi).

Emanuel Ungaro, a French dress designer, also attended the event in a high-profile manner.

Although they know very well that some Indians are very rich, they can buy internationally.

In the end, what restraining the development of luxury industry in India?

Many of them are related to complaints that foreign retail companies are concerned about India consumers, namely, high tariffs and foreign direct investment cap.

Luxury retailers are also urging the India government to have 100% ownership of India's company, rather than having to operate with a India partner and get only 51% of the ownership.

In addition, these retailers also hope that the India government can reduce tariffs.

The federal import tax on luxury goods in India is about 30% to 40%.

Regulatory hurdles and many wealthy India rich can go shopping overseas, which often make luxury brands complain about making money in India.

Branchini explained that for many companies, business in India is mainly for brand advocacy.

India is short of the high-end shopping places where major brands can set up high-end boutiques. This is another problem that restricts the development of luxury goods market in India.

No matter New Delhi, Mumbai or Bangalore, there is no place like Fifth Avenue in New York, Bond Street in Mumbai, or RueSaint-Honor in Paris.

On the contrary, luxury goods in India are "hidden" in five star hotels, international airports or rare high-end shopping malls.

It can be added that although opening a Fifth Avenue in New Delhi is a distant dream, the asphalt free road and crisscross cables will be a good and encouraging start. These infrastructures are not only conducive to the creation of fashionable shops.

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However, there is another possibility that consumers in India do not like Western luxury goods, at least not yet.

Don't forget, India has a long history of customizing high-end products (think of those headstones, embroidered silk and gorgeous wedding dresses).

In his speech, Versace said that it is no easy task to conquer India, especially the luxury industry in India, because the high-end consumers in India have hundreds of years of aesthetic tradition, which have shaped their taste.

However, as long as the marketing method is appropriate, the taste can be changed.

As the Italy luxury industry association suggests in its report, expanding the scope of the dazzling fashion magazines may help.

Bollywood seems to be trying to do its part.

In 2010, the heroine of the Bollywood film Aisha (Aisha), wearing specially designed clothes, spent a lot of time shopping in luxury stores on the screen, which gave some audiences more impression than the plot itself.

The luxury industry's attention to India and other markets is hardly surprising.

It is estimated that in less than five years, emerging market share of global luxury goods sales will reach 50%.

The luxury industry realized the importance of emerging markets during the global downturn. Commentators could not help sighing: BRICs has saved the luxury industry.

The BRICs are the four largest emerging markets in Brazil, Russia, India and China.

More specifically, it should be the BRIC countries except India that have saved the luxury industry.

For a major economy like India, which is the second largest economy in the world, its international luxury market is still surprisingly small.

India's luxury market has not been able to develop as rapidly as the luxury market in China and other countries.

Sales of luxury goods in China have made remarkable achievements.

Gianni, Versace's co chief executive and SantoVersace, chairman of the Italy Luxury Goods Association (FondazioneAltagamma), described the India luxury market as a short distance runner on the starting line in a speech prepared for Friday's meeting, but tied with heavy shackles on her feet. (Versace)

The association is a lobby group for luxury trade in Italy.

Data from the Italy luxury industry association show that China's luxury goods sales account for 10% of global luxury goods sales, while India accounts for less than 1%, while the value of India's luxury goods market is around 1 billion 300 million dollars.

The Italy business delegation to Mumbai was organized by the association.