What:  India's retail landscape transformation attracts high-end brands like Birkenstock, capitalizing on the country's economic growth and evolving consumer preferences.

Why it is important: India's burgeoning economy and expanding middle class are creating unprecedented opportunities for luxury brands, signaling a shift in global retail focus from China to India.

Birkenstock's inaugural flagship store in India marks a significant milestone in the country's evolving luxury retail landscape. This strategic expansion aligns with India's rapid economic growth and its increasing attractiveness for global brands. Kearney's 2023 Global Retail Development Index™ has ranked India as the most attractive emerging country for retail expansion, while BCG projects the Indian retail market to grow at 9-10% annually, reaching USD 2 trillion by 2033.

The rise of affluent consumers in India is a key driver for luxury brands' interest. Goldman Sachs forecasts the number of upwardly mobile consumers in India to surge from 60 million in 2023 to 100 million by 2027. This demographic shift is accompanied by a transformation in consumer behavior, with a growing preference for brand names and prestige products.

India's retail infrastructure is evolving to meet this demand, as evidenced by the 46% increase in retail space leasing across eight major cities in 2023. The opening of luxury malls like Jio World Plaza in Mumbai has provided the necessary ecosystem for high-end brands to establish their presence. This development has attracted numerous international luxury labels, including Balenciaga and Valentino, marking their debut in the Indian market.

IADS note: The entry of brands like SMCP (Sandro and Maje) through partnerships with local retail giants such as Reliance further underscores India's potential as a luxury retail destination. As the country's economy continues to outpace major global markets, it presents a compelling opportunity for luxury brands to diversify their global footprint and tap into a new, dynamic consumer base.

Is India the new China?