Why India is not the next China

Aditya Birla Fashion and Retail Limited (ABFRL) is the country's leading fashion conglomerate, with a revenue of around 1.37 billion euros ($1.49 billion) in 2023. Over the past two decades, it has succeeded in strengthening the presence of luxury and bridge-to-luxury brands beyond the country's main metropolises. This is thanks not only to its multi-brand store, The Collective, home to such popular brands as Ralph Lauren, Hackett London, Ted Baker, and Moschino, but also to the development of a portfolio of luxury brands in which it has acquired majority stakes. These include leading Indian luxury brands, as well as a 50/50 investment with Christian Louboutin in India.

The Group is now preparing for the entry of India's first foreign luxury department store, Galeries Lafayette, scheduled to open in Mumbai in December, on a 90'000 sq ft (8361.2 m²) site in one of the city's most expensive areas. It will be followed by another store in New Delhi in 2025. ABFRL also plans to develop Galeries Lafayette in under-represented yet promising luxury markets in India, such as Hyderabad.

In an exclusive interview with Luxury Tribune, Sathyajit Radhakrishnan, CEO of ABFRL International Business, reveals the reality of the Indian luxury market and the best ways to approach it.

Why did ABFRL choose to bring a department store - Galeries Lafayette, to India and not partner directly with luxury brands eager to expand in India?

Indian consumers need a ladder or a bridge-to-luxury to move up in their buying habits as they grow economically. One does not go from buying a fast fashion brand to buying an uber luxury brand right away. This is why we created The Collective in 2009, a bridge-to-luxury and luxury multi-brand store that houses names such as Ralph Lauren, Ted Baker, Karl Lagerfeld to name a few. We partnered with Galeries Lafayette to bring more multi-brand luxury department stores to India. We believe these stores are more inclusive and democratic, but at the same time, they are exclusive in terms of the kind of merchandising they have. Sometimes, single-brand stores can be intimidating to the second tier of customers who have not interacted with that single brand before and don’t know what to expect in its store. At Galeries Lafayette in India, we will bring nearly 100 brands in categories of luxury beauty and accessories like handbags, footwear, and then fashion, which will include Indian designers. We aim to motivate Indian consumers to increase their consumption of luxury goods with Galeries Lafayette.

What are your plans to make India’s first luxury department store a success and encourage more to follow?

Selling Iuxury to India requires local expertise which is why we will decide what will sell in the Galeries Lafayette stores in India but with a guiding hand from Galeries Lafayette HQ. The first store will open around the end of 2024. We have already recruited some suitable experts for Galleries Lafayette in India to understand the sensibilities of Indian consumers in advance. We are exploring the opening of concept stores of Galeries Lafayette beyond Delhi and Mumbai by making the brand aware of the possibilities in other parts of India. We will have an e-commerce channel as well for it.

Why has the interest of Luxury brands to enter India suddenly surged in the last 5 years?