Saturday, 13 October 2012

Luxury Market - Follow up to Single Brand FDI Retail

I don't have the time to follow this story much, there are bigger issues I want to write about but since this story appeared on Mint and these issues were being covered by news channels I cannot help but draw a connection between the recent policy changes to allow 100% FDI in single brand retail and the media stories covering luxury retailers coupled with publicizing their demand for lower taxes to make luxury affordable.

It is interesting how the media machinery kicks in for what is essentially publicity for Luxury Brand retailers.
The story as it appeared on MINT is "India to overtake China on luxury market growth".

"Driven by an explosion in number of rich people" India will overtake China in luxury market growth. After getting the FDI approval and the local sourcing norms changed the 'Luxury Industry' now wants the tariffs to be reduced. I heard a luxury retailer say in a panel discussion on a news channel that they need more "government support". Even a secretary to a banker or corporations in China wears brands from  'head to toe'.

Another point of note in this story is that for the foreign retailers in India it is all about the middle class. How to get them to consume all they have to offer. Of course the government can always make us believe that all the reforms will benefit the poor in the long run. After all luxury goods producers employ the poor, don't they deserve lower taxes?

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