For Luxury, Is India the Next China?
China is undergoing a historic transformation, and its “capitalist smackdown” has alarmed global brands, particularly in a time when supply chain chaos has created even more uncertainty. And while leaving China for good is unrealistic, looking to India as a strategic way to expand could be a winning strategy for luxury brands.
For years, analysts have projected the rise of India as a global superpower, and not even the COVID-19 pandemic has thwarted faith in the country’s long-term economic growth and stock market potential.
In a global strategy report published this September by Goldman Sachs, the American investment firm said India’s stock market could grow to more than $5 trillion to become the fifth-largest in the world by 2024. Additionally, direct foreign investment, political stability, and more highly-skilled workforce development have helped India accelerate its economic prosperity.
But until recently, the luxury industry has not taken advantage of India’s transformation, nor did it position the country as a great equalizer to China to reduce the industry’s dependency on the Middle Kingdom. Meanwhile, some heritage brands like Louis Vuitton, Hermès, and Gucci have strengthened customer relationships and increased their profits and sales in India. But not all luxury brands managed to develop and replicate these winning market entry strategies.
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