India

India's luxury market booms as High Streets lead the charge with over 600,000 sq. ft. leased in 2023

PNT Reporter | Last Updated : 20th Mar, 2024

Synopsis

Luxury retail in India is booming, with a surge in high-end brand leasing activity nationwide. CBRE and PHD Chamber of Commerce report a doubling of leasing activity on high streets in 2023, reaching over 0.3 million sq. ft., while malls saw tripled activity, leasing over 0.24 million sq. ft. Standalone stores also flourished, leasing over 0.1 million sq. ft., reflecting a 200% year-over-year growth. Fuelled by a burgeoning middle and upper class, luxury retail is expanding beyond major metros like Delhi and Mumbai, reaching new cities like Chandigarh and Ahmedabad. Despite the rise of online shopping, physical flagship stores remain crucial, leveraging technology to enhance customer experiences.

Luxury is on the rise in India, with a growing number of people seeking high-end goods. A new report by CBRE and PHD Chamber of Commerce and Industry shows a rise in luxury brand leasing activity across the country.

Luxury brands are increasingly choosing high streets, and prominent shopping areas with an established retail presence, for their stores. Leasing activity in high streets grew over 100% in 2023 compared to the previous year, with brands leasing over 0.3 million sq. ft. of space. Luxury stores in malls also saw significant growth, with leasing activity tripling in 2023, reaching over 0.24 million sq. ft. Standalone stores, where a single brand occupies the entire building, also experienced a strong increase, leasing over 0.1 million sq. ft. in 2023, reflecting a growth of over 200% year-over-year.

This growth is fuelled by India's expanding middle and upper class. With a rising disposable income exceeding 170% growth year-over-year in luxury retail leasing overall, there's a clear desire for sophisticated lifestyles. Social media exposure to luxury brands has also played a role in increasing awareness and demand.

While luxury retail is concentrated in major metro cities like Delhi (NCR region boasting nearly 80% of international luxury brands) and Mumbai, the trend is spreading to other cities. Luxury brands are expanding to new metro locations and even exploring tier-II cities like Chandigarh and Ahmedabad to cater to affluent consumers from surrounding areas who previously travelled to metros for luxury shopping, like those in Gujarat and Maharashtra who visit Mumbai.

Despite the rise of online shopping, physical stores remain important for luxury brands. Flagship stores provide a unique shopping experience, allowing brands to showcase their values and create an immersive environment that connects with customers. This is different from the generic experience offered by online marketplaces.

Luxury retailers are adopting new technologies like augmented reality (AR) and artificial intelligence (AI) to enhance the in-store experience. This creates a seamless omnichannel journey that combines the physical store with digital elements, further engaging customers and solidifying the brand image.

With its growing consumer base and a strong inclination towards luxury goods, India's luxury retail market is expected to continue expanding in the coming years. This will reshape the retail landscape and position India as a major hub for global luxury brands, attracting not only discerning domestic consumers but also international luxury brands eager to capitalize on this booming market.

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India

India's luxury market booms as High Streets lead the charge with over 600,000 sq. ft. leased in 2023

Synopsis

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