As the luxury market adapts to shifting global dynamics, Bulgari, the prominent jeweler owned by LVMH Moët Hennessy Louis Vuitton, is turning its attention towards India. This strategic shift comes in response to declining luxury demand in China, prompted by a sluggish economic recovery.
Jean-Christophe Babin, Bulgari’s CEO, recently articulated the brand’s commitment to expanding its presence in India during an interview with Bloomberg TV. Currently, the brand operates 13 boutiques and official retailers across the nation, a figure that represents the potential for substantial growth within this emerging market.
India’s demographic advantages are significant. With a young and affluent population that is increasingly drawn to luxury goods, the country could soon become one of the world’s top five or eight markets for luxury brands. Babin noted, “We see more luxury to come in the coming months or years, which will propel India, if not in the top three, but probably to the top five or top eight markets worldwide.” This vision highlights not only the optimism surrounding India’s potential but also the brand’s intention to capitalize on changing consumer behaviors.
In stark contrast, global luxury companies, including LVMH and Kering SA, have reported declining sales in China during the first nine months of 2024, directly related to the country’s persistent economic challenges. The fallout from a housing crisis has dominated China’s economic landscape, pushing many luxury brands to re-evaluate their strategies.
Considering the current landscape, Bulgari seeks to enhance its e-commerce capabilities in China over the next two years. Babin indicated that rather than opening new physical stores, the brand plans to tap into the growing market of luxury clients in smaller Chinese cities through improved online shopping experiences. This shift recognizes the slowed absorption of excess real estate and manufacturing capacity, suggesting that the road to economic recovery may be longer than initially anticipated.
Additionally, geopolitical tensions pose risks to the luxury sector. For instance, Donald Trump’s recent statements regarding potential tariffs on Chinese goods have introduced further uncertainty. Nevertheless, Babin remains confident that most luxury imports to China come from European nations, mitigating the direct impact of such tariffs on Bulgari’s operations.
While the luxury market shows signs of cooling, Babin argued that the current downturn is temporary. He explained that this year’s relative weakness is partly due to comparisons with an exceptionally strong 2023, which saw heightened demand fueled by consumer savings accumulated during COVID-19 lockdowns. This perspective allows Bulgari to position itself for future growth rather than react defensively to transitory challenges.
Bulgari’s performance indicates resilience in this shifting landscape. Babin reported “more than double-digit growth,” primarily driven by clients seeking natural upselling opportunities. This success underscores the effectiveness of a tailored approach in luxury retail, focusing on enhanced customer experiences alongside product offerings.
In conclusion, as China experiences economic turbulence, India emerges as a beacon of opportunity for luxury brands like Bulgari. By investing in e-commerce and leveraging India’s unique demographic landscape, Bulgari is proactively navigating the complexities of today’s global market. With a clear vision for future growth, the brand reinforces its commitment to international expansion and positions itself as a key player in India’s burgeoning luxury sector.
