Fashion brands see India as their next big opportunity as China prospects dim

The insight: India is becoming a more attractive destination for fashion brands as they try to tap into the country’s growing affluent population and reduce their reliance on China.

• One in 5 fashion executives called India a focus market for 2025, per​​ a survey by BoF and McKinsey.
• Two-thirds (67%) see India as a promising market for growth, compared with just 27% for China.

The opportunity: It’s easy to see India’s appeal to retailers—the country’s middle class is currently 430 million people strong, making it bigger than the middle classes of the US and Western Europe combined, per McKinsey.

India also has the fastest-growing population of ultra-high-net-worth individuals in the world. The number of these consumers, who have assets worth more than $30 million, is expected to grow 50% between 2023 and 2028, making the country a particularly lucrative opportunity for luxury brands.

• India’s luxury market is expected to grow between 15% and 25% annually for the next seven years, per Barclays.
• Brands including Hermès, Christian Dior, and Burberry have snapped up prime retail space to capitalize on demand; Bulgari plans to nearly double its footprint to over 20 stores across 12 cities.
• While India has a long way to go before it can rival China’s importance as a luxury market, it is vaulting quickly up the ranks: Bulgari CEO Jean-Christophe Babin expects the country to be in the “top five or top eight [markets] worldwide,” he told Bloomberg.

Our take: For all its opportunities, India also offers retailers a distinct challenge.

The country contains “many Indias,” Myntra CEO Nandita Sinha noted to BoF—meaning brands have to be attuned to its diverse population and avoid a one-size-fits-all approach to reaching shoppers.

• That means respecting local traditions—such as by incorporating elements of traditional wear (which dominates India’s apparel sales) into their offerings.
• At the same time, interest in Western fashion is growing as younger consumers look globally for inspiration.

Retailers also have to contend with the difficulties of finding high-quality retail space, as well as the challenges—and expense—of last-mile delivery.

Go further: Check out our Asia-Pacific Ecommerce Forecast 2024and our latestLuxury Ecommerce 2024 report.

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