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Western Brands Eye India's $3.0 Billion Luxury Goods Market

Luxury brands are eager to take advantage of India’s new wealth. But the road to success is strewn with political and cultural obstacles.

Indians prefer jewellry over luxury brands
Indians prefer jewellry over luxury brands
Julien Bouissou

NEW DELHI - Advertising campaigns for luxury brands in India usually feature Bollywood actors or fashion models. Mahatma Gandhi, the embodiment of monastic life, barefooted and draped in white cloth, was for a longtime off limits. But in 2009, the German company Montblanc engraved the silhouette of India's most famous political and spiritual leader onto the nib of a limited edition pen. It retailed at $25,000.

After years of austerity, has India finally converted to luxury? The country now has some 126,000 millionaires, and this number increases each year. But very little is known about them. Their habits and consumption patterns were at the heart of a conference on luxury at the end of March in Mumbai, organized by Mint newspaper in partnership with a group of Italian brands.

The local market, estimated to be worth three billion dollars, could become the fifth biggest in the world by 2025, says Laxman Narasimhim, director of the McKinsey consulting group in India. The forecast is an optimistic one, because while Indians are turning to luxury, the presence of big brands in India remains limited.

Louis Vuitton has 35 stores in China, against only three in India. Just recently, a LVMH manager visiting the country noted, in despair, that potential customers living in northern Mumbai would be better off flying to Dubai rather than spending three hours in the traffic jams to buy a bag in the Louis Vuitton store in south of the city.

In India, the development of the luxury sector is stymied by the lack of infrastructure. There is no equivalent of Rue de la Paix in Paris or Fifth Avenue in New York. Luxury brands have no choice but to open stores inside famous hotels or shopping centers protected by security guards. The products sold there are more expensive than elsewhere because of tariffs and tax.

The Internet might save the day

"Contrary to what happened in Western countries, the luxury industry in India could best develop on the Internet," suggests Amit Dutta, director of the Luxury Hues consulting firm. India's large cities do not have the monopoly over the market: it is the small town of Jalandhar in northwestern state of Punjab where the highest number of Rolls-Royce per inhabitant is sold.

In India, the brands have not yet cannibalized the luxury market. The jewelry market accounts for 30 percent of spending, in comparison with nine percent on average for the rest of the world. Half of the jewelry is purchased for weddings.

"The luxury industry here is only just beginning," says Dutta. "Rich Indians didn't want to flaunt their wealth for fear of tax adjustments, for example. But little by little customers, and especially the newly rich, aren't scared of ostentation and have started to use luxury as a symbol of social success."

The only question is whether luxury brands are recognized as a symbol of success by the more affluent. "This is not yet the case," says Santosh Desai, director of the Future Brands marketing firm. "India has many other social markers beyond consumption." A Ferrari or a Mercedes is thus considered a far safer bet than a discrete luxury item.

Thanks to the media, brand awareness has lately been improving. More and more magazine supplements dedicated to luxury have been published, and explained in a very didactic way how to appreciate a good whiskey or cigar. Vogue magazine even organizes workshops on how to dress.

But foreign luxury companies are holding back from launching into the Indian market, put off by the fact they are not allowed to own their retail outlets 100 percent. The maximum limit for foreign ownership is currently 51 percent. Indian partners are known to prefer concentrating on driving up sales rather than investing in a brand that could be one day out of their reach.

Vogue tried some years ago to popularize the concept of luxury throughout the country – and in the process make its readers feel less guilty- by publishing pictures of toothless villagers wearing luxury clothes. The images sparked a scandal, just like the sale of Montblanc pens bearing the image of Gandhi. India may be getting richer by the day, but its spirit remains closer to that of the modern Mahatma than to its legendary maharajah kings.

Read the original article in French

Photo - Eric Vernier

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FOCUS: Russia-Ukraine War

Wagner Group 2.0: Why Russia's Mercenary System Is Here To Stay

Many had predicted that the death last month of Wagner Group chief Yevgeny Prigozhin meant the demise of the mercenary outfit. Yet signs in recent days say the private military outfit is active again in Ukraine, a reminder of the Kremlin's interest in continuing a private fighting formula that has worked all around the world.

Photograph of a Wagner soldier in the city of Artyomovsk, holding a rifle.

Ukraine, Donetsk Region - March 24, 2023: A Wagner Group soldier guards an area in the city of Artyomovsk (Bakhmut).

Cameron Manley


“Let’s not forget that there is no Wagner Group anymore,” Kremlin spokesman Dmitry Peskov had declared. “Such an organization, in our eyes, does not exist.”

The August 25 statement from came less than two days after the death of Yevgeny Prigozhin, leader of the infamous Russian mercenary outfit, as questions swirled about Wagner's fate after its crucial role in the war in Ukraine and other Russian military missions around the world.

Stay up-to-date with the latest on the Russia-Ukraine war, with our exclusive international coverage.

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How could an independent military outfit survive after its charismatic founder's death? It seemed highly unlikely that President Vladimir Putin would allow the survival of a group after had launched a short-lived coup attempt in late June that most outside observers believe led to Prigozhin's private airplane being shot down by Russian forces on August 23.

"Wagner is over,” said the Kremlin critic and Russian political commentator Maksim Katz. “The group can’t keep going. There’s the possibility that they could continue in parts or with Defense Ministry contracts, but the group only worked with an unofficial agreement between Putin and Prigozhin.”

Yet barely a month later, and there are already multiple signs that the Wagner phoenix is rising from the ashes.

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