Call it the coming of age of organised and branded retail in India. Swiss luxury goods and fashion group LVMH Moet Hennessy Louis Vuitton is preparing to ride the retail boom in India, and intends to invest in setting up company-owned boutique retail chains for premium brands like Tag Heuer and Zenith in the country.
The group has already initiated talks with leading retail companies in India to set up joint ventures to enter single brand retailing in the country. The FDI norms today permit overseas firms to own up to 51% stake in single brand retail ventures.
"Tag Heuer has been present in the country for nearly three years now and has become the tyhird largest premium watch brand here. Our aim to bcome the number one brand and we feel investments in the retail market in India will help us achieve this," said LVMH group head (Asia Pacific) Ravi Thakran.
The firm has already earmarked an investment of close to Rs 25 crore for establishing a chain of Tag Heuer boutique retail outlets across the country next year. This would also mark a big strategy shift for the company, which today operates through six standalone franchsee outlets.
"Lack of retail infrastructure is hampering growth today and we want to invest in the retail sector here to maximise growth," Thakran said.
The group, he said, is also planning to introduce two other luxury brands in India — Zenith (watches) and Fendi (fashion). "While LVMH will again look at investing in setting up single brand retail chain for Zenith watches, we will take the franchisee route for Fendi," Thakran said.
Both Zenith and Fendi would also make their India debut in early 2007, he said. "We are in talks with a few retail chains for setting up joint ventures in India under the current 51:49 investment norm. These ventures would be in place soon," Thakran added.
Zenith today sells premium watches that range between Rs 1.5 lakh and a few crores. The firm plans to introduce the entire range in India through these single brand outlets, but the mainstream watches here would be in the range of Rs 1.5 lakh to Rs 5 lakh. Some products in the Rs 20 lakh and Rs 1 crore range would also be displayed and sold in the country, he said.
"India is today at the cusp of a big change, and we are betting on this changing customer behaviour. We feel the market for such premum products is on the rise in India and we want to be well entrenched in the market to take full benefit of the potential here. With these brands, we want to target the niche masses in India, where we find a clear demand for luxury products," Thakran further said.
The retail market was put in fire after Bharti Airtel's deal with world's biggest retailer Wal-Mart. According experts, other global biggies, who do not want to be left behind, are trying out every option to enter the lucrative India retail industry. Since the organise retail is a small segment, foreign players see big potential for growth here.
Source : Times Of India, 3rd Dec '06
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