Young & luxurious: How new buyers are pushing luxe retail growth in India

• Luxury brands leased 0.6 million square feet of space in 2023, which is a 170% year-on-year growth.
• Exclusive high-end malls like Jio World Plaza in Mumbai and Mall of Asia in Bangalore act as facilitators.
• Apart from millennials and GenZs, Gen Alpha also has an affinity to luxury retailing — forming a new set of consumers.
  

Indians no longer have to fly abroad to buy Valentinos, Balenciaga, or shop at Tiffany & Co. — as these luxury brands have been establishing their presence across the country for the last few years. And, there are more to come. Brioni, Roberto Cavalli, and Dunhill are expected to enter India in 2024. Indians’ love for global luxury brands has been growing as much as their love for India, according to a report by CBRE.

The report, which mapped retail space leasing in India’s top eight states, says that as much as 0.6 million square feet of space was leased by them in 2023 — a 170% year-on-year growth. Their preferred format is high streets which have a 45% share in total space leased by luxury brands. It’s followed by malls at 40%, and individual stores make up the rest at 15%.

“This surge in leasing has been accompanied by the entry and expansion of various international luxury fashion, watch and jewellery brands across different locations,” says CBRE.

A few exclusive high-end malls have also opened recently like Jio World Plaza in Mumbai and Mall of Asia in Bangalore — facilitating the entry of more brands. Also, French upmarket retailer Galeries Lafayette is planning to enter India in a joint venture with Aditya Birla Retail.

The trend was put in high gear during the pandemic when global travel restricted the global shopping trips of affluent Indians. Consequently, international retailers ensured that their Indian customers had access to the current season trends. Also, they eliminated price disparity between Indian stores and their counterparts in other global cities — making a smooth entry.

Moreover, luxury offerings in metros also attract affluent consumers from tier II cities. This growth trajectory has prompted them to adopt an aggressive expansion approach by opening stores in cities such as Chandigarh and Ahmedabad.

The luxury sector, which saw a significant increase in leasing in 2023, shows a promising trend with the entry and expansion of international brands. This positive momentum is expected to continue, aligning with our anticipation for a similar trend in the years ahead,” said Anshuman Magazine, chairman & CEO of India, Southeast Asia, Middle East & Africa at CBRE.

Young wear Prada

More trends bode well for the growth of luxury sales in India. Luxe is catering to a younger and younger clientele. Millennials and GenZs collectively hold a significant market share in luxury sales. But there is a new and emerging generation of luxury brand lovers — Gen Alpha born between 2010-2024.

As per CBRE, the spending power of GenZ, and even Gen Alpha is projected to grow three times faster than other generations till 2030. This trend highlights a more precocious attitude towards luxury, with GenZ consumers becoming more conscious of luxury much earlier than even millennials.

It means teens are much more brand-conscious than ever and as that trend takes off, there will be more aspirations and buyers of such brands. “Luxury brands are aggressively chasing new avenues to attract both seasoned and aspiring luxury consumers,” says Magazine.

Social media has become a game changer when it comes to skyrocketing awareness. “For these generations, luxury isn’t about price; it’s a way to express themselves – a badge of social status, refined taste and individuality,” sums up CBRE.