India's luxury promise hits a wall: not enough malls to shop in

Mumbai/Paris: In India's rapidly growing economy, millions of newly affluent consumers are fuelling demand for bags and accessories from the likes of Louis Vuitton, Chanel and Dior. But getting to a store can be a problem - there aren't that many of them.

With nearly 1.5 billion people and an economy growing more than 6 per cent, India ⁠is expanding faster than China, the luxury industry's growth engine for over a decade.

That said, top brands are struggling to expand amid a severe shortage of high-quality retail space. India only has ⁠three true luxury malls: two in New Delhi - the Emporio and the Chanakya, owned by real estate developer DLF, and the Jio World ‌Plaza in Mumbai, owned by the Reliance conglomerate.

"We have regular requests from ​the parent companies - from LVMH Group, from Kering, from Richemont - to give them more space for the brands they want to get into India," said Saurabh Bharara, head of luxury malls at DLF.

"We have top 15 brands that are ready to enter India, if we give them space tomorrow," he said, but added there was "zero availability" right now.

DLF is planning an expansion of the Emporio, which will double its leasable space of 160,000 square feet but will likely only be operational by the end of 2028.

LVMH, Kering and Richemont declined to comment.

Economic momentum, more wealthy people

India now ranks fourth globally ​in the number of individuals with wealth above $100 million, behind ⁠the U.S., China and Japan, according to Knight Frank's Wealth Report 2025.

It also has a rapidly growing middle class. Yet, India's luxury goods market was estimated at just $12.1 billion last year, less than 3% of China's, according to Euromonitor data reviewed by Reuters.

So while India holds the potential for greater luxury sales that could offset slowing momentum in other key regions, that promise may go unrealised until more malls are built.

"Quality real estate is the single largest stumbling block," said R. Satyajit, CEO of international brands at Aditya ⁠Birla Fashion and Retail. The firm ‌opened a franchise of France's famed department store Galeries Lafayette in Mumbai in November, affording some 200 foreign brands an entry into India.

Four luxury-focused malls, including the expansion of the Emporio, are being planned, although all are expected to take some years before opening. Of the other three, ‌one will be in Mumbai, another in Hyderabad, and one in Gurgaon, part of the National Capital Region near New Delhi.

That's given hope to the likes of Chanel's managing director, Amit Goyal, who said although "there are currently only a few luxury ⁠malls in the country, several promising projects are in development," adding that a store in Mumbai is a near-term priority for the brand.

Some high-end labels have set up shop in less exclusive but still premium malls. Encouraged by what it calls a young confident Indian ‌Gen-Z population, luxury sneaker brand Golden Goose has opened three stores in two years - in New Delhi, Bangalore and Mumbai.

Some brands have no stories in India

The shortage of high-end mall space has resulted in some notable gaps in India's luxury market. Several leading brands like Patek Philippe and Loro Piana, for ‌example, have no physical stores in India.

Prada has no fashion stores and only one beauty store, while Chanel has just one fashion store and seven fragrance and beauty boutiques.

In ‌China, by contrast, Prada has 14 fashion stores while Chanel has 18. It's not uncommon for some brands to have 40-50 stores in China, Louis Vuitton and Gucci among them.

Even if a label is willing to forgo ultra-high-end spaces characterised by large column-free stores, high ceilings and ample parking, options remain limited.

India has only about 110 million square feet of grade-A mall stock, compared with over 400 million in China and ⁠around 700 million in the United ⁠States, said property consultancy Anarock.

Opening branded stores on high streets is not seen as an attractive business proposition, given Indian cities' problems with cleanliness and pollution.

Given the hurdles, some brands prefer to enter India through franchise agreements with the retail arms of conglomerates Reliance, Aditya Birla Group and Tata Group, which act as gateways to the market, providing store networks and capital.

Balenciaga, Tod's and Stella McCartney entered through Reliance Brands, while Jio World Plaza gave Louis Vuitton a Mumbai presence beyond hotels for the first time.

The other hurdles

Meanwhile, developers face a chicken-and-egg problem.

Securing funding can be a struggle without firm commitments from brands. But these "do not flow in until such a time as the project is near completion," notes Rajneesh Mahajan, CEO of Inorbit Malls, part of property firm K. Raheja Corp, which is developing a luxury mall in Hyderabad.

Luxury players must also grapple with import duties of 35–40% that have traditionally pushed wealthy ​Indian shoppers towards Paris, Dubai and Singapore.

Some brands are content to take their time.

Prada family scion Lorenzo Bertelli, for example, told Reuters in December that India is the ​only real potential new market the group is currently analysing, but a decision ​on when and where to enter, which would also involve offices for corporate operations, could take three to five years.

"So when you want to open one store, you also have a plan, not just for one store, but for more ​than one store because you have a lot of other cost attached to it," he said.

(Reporting by Dhwani Pandya in Mumbai and Helen Reid in Paris; Additional reporting by Praveen Paramasivam in Chennai and Casey Hall in Shanghai; Editing by Lisa Jucca and Edwina Gibbs)