Global luxury brands such as Gucci, Cartier, and Louis Vuitton, among others, have signed leases for retail spaces in a new Mumbai mall developed by Asia’s richest Mukesh Ambani, as the brands and Reliance Industries look to tap lucrative prospects presented by India’s robust economic growth and the swift increase in the number of millionaires.
Jio World Plaza is likely to open this year, Reuters said citing an unnamed source. The new mall is situated within Reliance Industries’ extensive $1 billion business and cultural complex in Mumbai’s bustling business district.
More than a dozen luxury consumer goods brands are entering the country ahead of the festive season, as they look to attract consumers in a market riding on the growing affluence of Indians with higher incomes, spurring greater discretionary spending even in small towns.
While a K-shaped economic recovery in India is also seen to be a strong trend, according to several economists, the Asian economy has beaten almost all countries in terms of rising wealth. Remember India is home for some of the world’s richest including Mukesh Ambani and Gautam Adani.
For the first time since the global financial crisis of 2008, global household wealth in 2022, measured in US dollars, registered a collective decline both in nominal and real terms, encompassing aggregate and per-adult figures. Significantly, wealth per adult also saw its second-largest reduction since the turn of the century.
Lease agreements obtained from real estate analytics firm CRE Matrix reveal that Burberry Group, along with various brands under the umbrellas of LVMH, Kering, and Richemont, have committed to renting retail spaces within the mall. Additionally, these brands have agreed to share a percentage of their monthly net revenue with Reliance, ranging from 4% to 12%.
India’s 1.4 billion population, the world’s biggest, has a per capita income of just $2,300, but the country is also home to more than 800,000 dollar millionaires who are splashing out on everything from luxury homes to expensive SUVs.
At almost 700 square metres (7,500 square feet), Louis Vuitton’s Jio World Plaza store will be the most spacious of its four outlets in India. Cartier’s store will be its second in the country and for Dior, it will be the third.
Some lease agreements like that of Dior include a clause that entitles it to a 25% rent reduction if at least four of 10 luxury brands including Gucci, Cartier, Bulgari and Tiffany don’t open their own outlets in the mall within six months
Despite the sheer size of the market, India’s local luxury market lags behind many other emerging markets. Fashion and jewellery are very much dominated by local brands.
Jio World Plaza Mall, Mumbai (Reliance)
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