Tiffany & Co. is entering India after years eyeing the market’s rising middle class shoppers. The jeweler’s top executive says the time is finally right.
“That’s a big market, not only for the number of people, but also because it’s a very fast-growing middle class that we know is a driver of growth in luxury,” Chief Executive Officer Alessandro Bogliolo said in an interview Wednesday. “I think it’s the appropriate time now.”
India is the world’s second-biggest gold jewelry market, and sales of gold and diamond jewelry are expected to grow annually by as much as 7 per cent in the next three to five years, according to the nation’s Gem & Jewellery Export Promotion Council. Much of the retail business comes from small local shops that sell traditional ornaments.
Tiffany will start with two stores — one in New Delhi and another in Mumbai — that will carry the same assortment of silver and gold bracelets, necklaces and rings available in other markets, along with higher-end items with gemstones. Tiffany’s goal is to sell jewelry to members of the emerging middle class that are global travelers familiar with the label’s most popular designs and Western style, Mr Bogliolo said.
“India is a market with a huge local tradition for jewelry but our offering is not to compete with local designers, but more to bring the international appeal of the brand,” he said.
Around the world, Tiffany has refocused its efforts on increasing sales in local markets, rather than relying on tourist flows that have become erratic over the past several quarters. Weak tourist spending in the US has taken a toll on the company, driven by a strengthening dollar and trade tensions between the US and China. Meanwhile, in Hong Kong, street protests have disrupted stores and hindered sales.
Tiffany’s entry into India will be a joint-venture with Reliance Brands, the conglomerate owned by India’s richest man Mukesh Ambani. Reliance has forged partnerships with numerous international luxury brands with ambitions in India, including Coach, Michael Kors, Burberry, Bottega Veneta and Hugo Boss. Mr Bogliolo said it’s the most important retail operator in the country.
It took so long for Tiffany to come to India because it sells only through its own stores, rather than in local jewelry shops and dealers. It has 325 directly-owned retail locations around the world.
Mr Bogliolo said the retail environment in India has been “quite volatile” over the past decade or so, but in recent years the market has become a clear-enough destination for luxury shopping for Tiffany to spend the cash and take the leap.
“There is a certain critical mass that’s needed to open a Tiffany store,” he said. “It’s quite an important investment in inventory, because of all the diamonds.”
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