ON THE COVER: THE LUXE ROUTE
How India’s capital city is the gateway for luxury brands into the country
As I arrived 15 minutes early at New Delhi’s Indira Gandhi Domestic Terminal 1-C on my GoAir flight, some swift baggage collection, a friendly ambience and plush terminals — all made my return to the city hasslefree. This is a busy airport though. While Indigo, SpiceJet and GoAir flights depart from Terminal 1-D and arrive at Terminal 1-C, Air India, Jet Airways and JetKonnect flights depart and arrive at Terminal 3, the swanky new building that opened its doors in July 2010.
Passengers looking to transfer to international flights can hop on to the complimentary shuttle bus service provided by the airport. While the changes at the airport reflect development in the city, not everything is perfect. My journey from the airport to the hotel that would usually take about 30 minutes, took much longer due to peak business hour traffic.
Delhi has transformed since the last time I visited, but then it has always been a city of change from 300 B.C Mauryan period through Mughal dynasties to colonial British Delhi. What has remained constant is Delhi’s vision of itself as the preferred financial, business and political centre of India. A
crossroads between a rich cultural heritage and a strong business foundation, it has immaculately adapted itself, and today holds all the elements of an advanced Indian metropolis. Since the Commonwealth Games in 2010, Delhi has undergone quite a facelift. Perhaps it was only my faulty memory, but it now seems to have wider roads, greener footpaths and better managed traffic. On my ride to the hotel, I also noticed a whole lot of the Indian Army influence that gives Delhi the feel of a true north Indian city. Also, an unabashed vow to cleanliness can be observed at almost every corner of the capital.
The changes began long before the Commonwealth Games, of course. Back in 2002, the public transportation system underwent an overhaul that revolutionised the way the city travels. Home to India’s second rapid transportation system after Kolkata, New Delhi opened its doors to the Metro. Today almost 2.4 million commuters ride this efficient system that connects Delhi, Gurgaon, Noida and Ghaziabad. More traditional options include taxis, buses and of course the infamous rickshaws (three wheeled and cycle) that are fairly easy to hail in and around central Delhi. Being a circularly planned city, getting around is relatively easy thanks to the number of highways and freeways that connect various areas and colonies as they are called here. Larger distances are covered in shorter durations, although commuters who travel to Gurgaon daily for business face bumper-to-bumper peak hour traffic jams.
When global recession hit India as much as it did anywhere else in the world, Delhi fought its way through the financial catastrophe and showed consistent economic development in the past few years. The annual compound growth (between 2004-05 to 201314) of Delhi’s GSDP is recorded at 16.76 per cent compared to the national average of 4.5 per cent. The service sector contributes significantly encompassing almost 87.73 per cent of the sectoral composition (2013-14). Industries across real estate, hotels, restaurants, banking, insurance, wholesale and retail trade are flourishing in the capital since the last two decades.
Over the years, a foundation for a solid Indian retail test-market was laid out effortlessly. Brands recognised Delhi as a mature and viable bazaar to sustain their foreign set-ups. The government started permitting multi-brand Foreign Direct Investments (FDIs) and the business conditions in Delhi supported smoother processes for their expansion. As per a study conducted by a real estate research firm CBRE, luxury business retailers accounted for the highest proportion (26 per cent) of the new entrants to the capital, followed by specialist fashion (18 per cent) and restaurants (13 per cent). Delhi became a hotspot for global retailers who manoeuvred their way into the country through this city.
The Delhi luxury story is an unassuming one that has more than meets the eye. Vasant Kunj, an area within the south-western part of the city, beats to the glamour of DLF Emporio, Delhi’s uber luxury mall. Walking past
a plethora of labels that can’t be found in any other city in India, I delved into Delhi’s entrenched connection with luxury. The Indian luxury brands’ business strategy is a calculated move taking into account a number of demographic and economic dynamics of the city that favour this expansion. Brands evaluating metropolises on a number of parameters for their Indian debut realise Delhi fits the bill in more than one way.
“Real-estate opportunities in Delhi are quite inviting for luxury brands,” says Nikhil Mehra, COO of Genesis Luxury, a company that’s brought labels such as Jimmy Choo, Canali, Burberry and Armani to India. Space availability across malls is one of the key reasons brands pick Delhi over Mumbai or Kolkata. “Delhi is also home to India’s only real luxury mall, the DLF Emporio, which makes it the obvious and viable choice for international luxe brands,” adds Mehra. In terms of brand persona, retailers find the overall real-estate climate in the capital the most suitable for their entrance. With regard to government policies, Mehra says that status-quo is being maintained for quite a while and the FDI regulations have not eased off further.
A highly cash-rich environment, Delhi’s luxury industry merely mirrors the market it thrives in. The per capita annual income in the capital – ₹ 2.01 lakh in 2012-13 – is three times the national average and highest in the country. It is estimated that 25 per cent of India’s prosperous population resides in Delhi with an ever increasing base of ultra highnetworth households (HNHs). The purchasing power of people is higher and luxury brands are looked upon as investments. “It’s a cultural difference of how wealth is displayed here,” says Abhay Gupta, CEO of Luxury Connect, a company that brought to India the likes of Versace and Corneliani. “The folks are more experimental and the socioeconomic environment aids the higher sale productivity of luxury brands,” he adds.
The Delhi consumer is wired differently and the way luxury is consumed in the capital differs from the other metropolises of India. “The customers here are highly brand identity driven. The ability and urge to spend here is more,” says Mehra. “Luxury brands cater to two types of customers in Delhi, while one is young and aspirational, the other is experienced, well-travelled and exposed to luxe products.” In the luxury space here, there is something for everybody. “While shoes and accessories work well with women, watches and clothing work better with men,” he elaborates. “Concierge services too are gaining momentum as the Delhi customer is leaning more towards the experience rather than the product itself.”
Apart from the malls, luxury brands are also venturing into the high-streets in South Delhi due to lower rentals. Indian luxe brands are mushrooming up in areas such as Khan Market, Haus Khaz Village, the Crescent at the Qutub and Defence Colony. You are more
likely to spot a Tarun Tahiliani or Rohit Bal store rather than say, a Fendi store in one of Delhi’s swanky high-streets. Rentals are much lower and Indian luxury labels are more experimental in terms of visibility. High-street stores are also easily accessible to the affluent population that resides within proximity. Kitsch, a retail store that stocks exclusive luxe products from brands such as Alexander McQueen, Diane von Fürstenberg and Charlotte Olympia has also shifted to Defence Colony from DLF Emporio to join the bandwagon.
Supportive real-estate within a cultural climate that welcomes luxury with open arms; and we have a winner. Brands such as Villeroy & Boch and Bulgari that had previously exited India have found their way back despite legal hindrances thanks to Delhi’s favourable business conditions.
As the city expands in terms of infrastructure, it further widens its horizons to other luxury brands that are still trying to figure out the right waters to test in India.
While India rides on the wave of development with the new government, Delhi leads the way for the rest of the country. With its iconic grandeur, lucrative industries and favourable trade climate, to say that the capital is a prototype for a progressive Indian business city isn’t an over-estimation. Before I knew it, it was time to depart on my GoAir flight which was delayed by almost an hour this time. The delay failed to tarnish my altered perception towards the city as I left calculating my next visit. Safe to say I can’t wait to experience Delhi’s unashamed splendour once again. ■