Indian luxury and lifestyle brands are about to have an international boost through Delhi-based private-equity fund Brands and Beyond.
It is looking to invest US$70 million to take 12 to 14 Indian brands to the global stage over the next three years.
Backed by families from Europe, India and Singapore, the fund has chosen India as its base after five years of market research.
“India’s luxury market is still small and there is a lot of potential in Indian brands,” says Brands and Beyond founder/MD François Arpels. “International markets are big and structured, and growth is much easier. We want to take Indian brands international.”
Arpels is also on the advisory board of global skincare brand Skin Inc and Taiwanese jewellery designer brand Cindy Chao.
The fund is looking to invest in luxury brands across categories such as beauty, ready-to-wear, accessories and jewellery, which Arpels describes as “non-ethnic” but in keeping with Indian design and aesthetics.
“Indian brands can capitalise on the wealth of the nation in crafts. We are looking at such 100 per cent ‘made in India’ brands,” he says.
Arpels says luxury brands in India lack infrastructure. “There is no typical high street in India. Also, real estate costs are high, which poses difficulties for global luxury brands.”
KPMG partner Rajat Wahi, who is also head for consumer markets at the consultancy, says there is a big opportunity to invest in Indian brands and take them to international markets.
“The cost will be high but there is an opportunity to make these brands transcend India and go on to become aspirational for Europeans, Italians and other nationalities.”
Estimated to be worth $14 billion in 2015, the Indian luxury market is expected to grow at a compound annual growth rate (CAGR) of 14 to 15 per cent, according to data from KPMG. The market grew at a CAGR of 20 per cent between 2012 and 2015, with the slowdown being attributed to demonetisation of high-value currency notes and a crackdown on black money.