Mumbai: Indian tycoon Mukesh Ambani is betting a shopping palace within a $1 billion Mumbai business showcase will tap into surging demand for Western luxury goods, installing his Reliance empire as a portal through which most of the biggest brands must pass.
Though still small for a country of its size, India’s luxury market is set to nearly double in size to nearly $5 billion within five years, Euromonitor estimates. Targeting that growth, Reliance is building a mall with dozens of outlets for powerhouse brands from Louis Vuitton to Gucci, documents reviewed by Reuters show.
The ritzy mall, Jio World Plaza, is the centrepiece of Reliance’s bid to lure uber-rich Indians eyeing expensive bags or shoes. Luxury dominance would come on top of its number one position in India’s nearly $900 billion retail market, where it faces intense competition in e-commerce and supermarkets from the likes of Amazon and Walmart.
Three people with direct knowledge of Reliance’s strategy said the push is aimed at leveraging foreign brand partnerships and being ahead of retail rivals in luxury offerings.
The total cost of developing the Jio World Centre - a giant commercial and cultural hub in Mumbai’s Bandra Kurla business district that houses the luxury mall - is upwards of $1 billion, a person with knowledge of the matter said.
“Global brands want to be here (India), Reliance is trying to drive that boom and act as a catalyst,” said a second person with knowledge of Reliance’s strategy.
The sources declined to be identified because they’re not authorised to disclose Reliance’s strategy publicly.
Reliance did not respond to Reuters’ requests for comment.
The mall, spread across four floors and the size of 10 soccer fields, will come complete with marble floors and golden guardrails, the documents show. After COVID-19 disruptions delayed raw material imports, the mall will likely to open early next year, sources said.
A floorplan in a Reliance document reviewed by Reuters shows some 30 brands as confirmed in recent weeks for the upper ground floor of the mall, including LVMH’s Louis Vuitton, Tiffany and Dior. Also present will be LVMH rival Kering’s Gucci, Balenciaga and Bottega Veneta, along with Versace, Richemont’s Cartier and Hermes.
The document doesn’t disclose financial details, nor whether the brand line-up might be subject to change. None of the brands responded to requests for comment.
The Jio World Plaza outlets represent significant India expansion for many brands. Company websites show, for example, Louis Vuitton has just three stores in India, despite opening its first outlet two decades ago, while Versace has just one.
Louis Vuitton’s outlet in the mall will be its biggest in India at 7,376 square feet, the document shows.
Anarock Property Consultants’ Pankaj Renjhen said India’s luxury market is so small that many foreign brands prefer partnering with Reliance to keep costs in check and capitalise on its grip - and understanding - of India’s retail market.
Euromonitor estimates the size of India’s personal luxury market was $2.6 billion last year, but set to grow 12% a year to reach $4.7 billion by 2026. By comparison, the market in China, where Louis Vuitton has around 60 outlets and Versace 40, will be up to $107 billion by 2026 from $58 billion last year.
Foreign brands for years have been hamstrung by issues including a limited number of stores in India, which “creates a chicken and egg problem,” said Luca Solca, senior luxury goods analyst at Bernstein.