'India lacks retail space, but long-term vision might help'
What do you think of India as a growing market for luxury goods?
Chanel’s interest in India started a few years back and our operations more recently. What is really striking now is the huge consumer confidence. Luxury spending has risen by 40 per cent annually with an estimated consumer target audience of around 2 million households. For a long time, Indian clients have been global consumers, shopping in London, Paris or New York.
What are your plans for India?
We started with a Chanel boutique at The Imperial, New Delhi, in March 2005 and we have had a growing clientele since then. Besides the Chanel Boutique at The Imperial, fragrance and beauty products are now available at various counters across Mumbai, Chennai and Bangalore. We are also actively working on a boutique project in Mumbai.
What is it that you think that India lacks in terms of luxury retail?
For the moment, India lacks retail space with a complete luxury environment and services. Retail is rapidly evolving and there are two interesting projects for luxury malls, scheduled to open in early 2008 in Delhi and Mumbai. Luxury retail environment should also be developed in airports.
What are the investments you will be making here?
Media and marketing investments have been engaged since 2005 and they will be sustained over the coming years. Our objective is to continue to expand the business in India and to make Chanel products known to Indian consumers. Not only the famous No 5 embodied by Nicole Kidman, but the whole range of Chanel products.
What are your views on the existing duty structure in India?
The existing duties in India are too high. More specifically, the countervailing duties based on the Maximum Retail Price are hampering the development of the business for fragrances and beauty as well as watches. What we propose is to either increase the abatement or put a ceiling on the MRP after which the countervailing duties could be levied on Cost Insurance Freight Basis. You have to know that luxury customers know a lot about prices and even if they are willing to pay a lot for extraordinary products, they want to pay the right price.
India does not have a High Street...
Since the concept of the ‘High Street’ does not exist in India yet, well-located and well-managed shopping malls could be the next best option. There is no lack of heritage in cities like Delhi or Mumbai. With longterm vision these areas might be able to transform some streets into luxury destinations.