NEW DELHI — After receiving clearance from the Indian government this month for single-brand retail, Swarovski will look at consolidated and increased growth in the Indian market.
Swarovski plans to invest 750 million rupees, or $11.4 million at current exchange, in India over the next three years. This will be not just to expand its store count, but also to develop designs that can inspire its global product range, said Francis Belin, the company’s senior vice president of the Asia-Pacific region.
“Operationally, this announcement enables us to invest in the market; make the brand accessible, and offer an international shopping experience to all our consumers,” Belin said.
Swarovski already has 40 franchised stand-alone stores across India, and a presence in more than 30 multibrand doors. The company opened a factory in Pune in 2000 and its first store in India in 2005, and now has revenues of about 1.2 billion rupees, or $18.3 million, a year in the country.
The overall annual turnover of the company is $3 billion. Swarovski has a presence in more than 170 countries, with 2,500 stores.
In the future, Swarovski will have a mix of franchised and company-owned stores, fitting in with its global strategy, Sukanya Dutta Roy, managing director, consumer goods business of Swarovski India Pvt Ltd., explained. She said that the growth would depend on upcoming malls, and the right locations, which are expected to be slow in the coming year. “We’re very clear which direction we want to move in, and there’s a lot of back-end work to make that happen. We will look at the larger stores that need more investment, and more installations ourselves. Meanwhile, we have very successful franchisees,” she said.
Opening stores in the different states of India would also need separate registrations, which could take six to seven months.
Swarovski has other new initiatives in India. Earlier this year, a collection was designed and launched for India, with more than 50 pieces of jewelry inspired by Indian design. The fine jewelry market in India is pegged at about 30 billion rupees, or about $459 million. The fashion jewelry market is estimated to be about 150 billion rupees, or $2.29 billion, and has been growing at 15 percent a year, according to industry estimates. The younger population has been gravitating toward more fashion jewelry, changing from the traditional Indian obsession with gold and silver jewelry.
The company’s application for single-brand retail was put in almost two years ago, soon after the Indian government gave clearance for 100 percent foreign direct investment in single-brand retail after years of arguments and delays. The regulations for FDI in single-brand retail stipulate a mandatory sourcing of 30 percent from India. “That is not a problem for us, we already source from India,” said Dutta. Swarovski’s factory in Pune is in a special economic zone and is not included in this sourcing requirement.
The clearance from the Indian government came through just as Swarovski unveiled a million crystal art installation at the Palladium Mall, Mumbai, for the festival of Diwali, which heralds the festive season in India.
“It is the first time Swarovski has done something like this in a local market. It was like a milestone for the brand,” said Dutta, explaining that it was appropriate that the chandelier be launched for Diwali, which is also called the festival of lights. Many Bollywood stars showed up for the event earlier this month, posing with the 37-foot-tall chandelier.