LVMH, Gucci, and other renowned luxury brands are preparing to open new stores in a luxury mall owned by Indian business magnate Mukesh Ambani’s Reliance Industries. The Jio World Plaza, located in Mumbai’s bustling business district, is set to open its doors later this year. While the specific details of the mall’s tenants have not been disclosed by Reliance, lease documents obtained by real estate analytics firm CRE Matrix reveal that prominent brands such as Cartier, Bulgari, Louis Vuitton, Dior, and Gucci, among others, have committed to renting shops in the mall. These brands have also agreed to share a percentage of their monthly net revenue with Reliance, demonstrating their trust in the potential success of this venture.
This move comes as luxury companies recognize the potential profitability stemming from India’s strong economic growth and increasing number of millionaires. In the past, luxury brands faced challenges in finding suitable retail spaces in India, often resorting to opening their first outlets in luxury hotels. However, they are now seeking a more significant and impactful presence in the market.
The Jio World Plaza will feature Louis Vuitton’s most expansive outlet in India, covering an impressive area of nearly 700 square meters (7,500 square feet). This will be one of Cartier’s two stores in the country and Dior’s third. In order to maintain the mall’s exclusivity, lease agreements for brands like Dior include a clause that allows for a 25% rent reduction if at least four out of ten luxury brands, such as Gucci, Cartier, Bulgari, and Tiffany, fail to open their own outlets within six months.
With a population of 1.4 billion, India boasts the largest number of inhabitants in the world. Although the country’s per capita income stands at $2,300, it is also home to over 800,000 millionaires who are increasingly indulging in luxury purchases, including high-end vehicles and luxurious homes. According to real estate consultants Knight Frank, India is expected to have 1.4 million millionaires by 2026, representing a remarkable 77% increase from 2021, largely driven by the country’s thriving economy.
While luxury firms have witnessed remarkable sales growth in China in recent years, the country’s slowing economy contrasts with the promising Indian market. Euromonitor estimates that India’s personal luxury market will experience an annual expansion of nearly 12% from 2022 to 2026, reaching a value of nearly $5 billion. In contrast, China’s personal luxury market is projected to grow by an average of 11.5% during the same period, amounting to $107 billion.
As the demand for luxury goods continues to surge in India, global luxury brands are actively investing in the country to seize opportunities for growth and expansion. The new outlets in Reliance’s luxury mall will provide these brands with a strategic foothold in one of the world’s fastest-growing consumer markets. With a thriving economy and a burgeoning population of affluent consumers, India presents a highly lucrative opportunity for luxury firms to establish a robust presence and capitalize on the country’s wealthy demographic.
Useful links:
1. Reliance Industries Official Website
2. Knight Frank India
