Foreign labels such as Moschino, Christian Dior, Salvatore Ferragamo, Burberry and Versace have opened their first stores in the country in the last 12 months, joining established boutiques like Louis Vuitton, Chanel and Bulgari, and beauty brands MAC Cosmetics and Revlon.
By the end of this year, new outlets will be launched for Fendi and Ermenegildo Zegna. A slew of designer labels — from Gucci to Giorgio Armani and Paul Smith — have said they hope to open in India in 2007, and executives from companies including Tod's and Saks Fifth Avenue have made exploratory trips to the subcontinent in recent months.
They are all chasing a market that is booming. A study by consultant Bain & Co. for the Italian group Altagamma estimated the Indian luxury goods market grew 25 percent last year, second only to China in its rate of growth.
And while China is attracting more buzz, India is increasingly a focus for industry executives. In fact, Altagamma today will hold a conference in Milan, "The Experience of Excellence in India," with presentations by senior Indian government officials as well as by Francesco Trapani, chief executive officer of Bulgari; Maria Cristina Buccellati; Ermenegildo Zegna, and Michele Norsa, chief executive of Ferragamo and former ceo of Valentino Fashion Group.
For now, the question isn't whether India can support such a huge rise in luxury retailing — a strong interest in foreign brands and a growing middle class of about 300 million almost guarantee that it will be a leading luxury market in the future — but whether the country is running out of retail space.
"Location is the biggest problem [for luxury brands in India] right now," said Marielou Phillips, a spokeswoman for Chanel in India. The brand's own experience is a good example: Since opening in the Imperial hotel in New Delhi last year, Chanel has been searching for another Mumbai location, but has been unable to find a suitable space.
"It's very difficult to find the perfect environment," Phillips said. "Luxury brands are currently limited to five-star hotels. The number of options is small."