Infra inadequacy key barrier to domestic luxury industry growth: Survey
A whopping 95 per cent of the chief executive officers (CEOs) representing the global luxury industry opined that lack of adequate infrastructure is the key barrier confronting the growth of luxury industry in India, a survey revealed today.
"The lack of premium retail infrastructure in India is impacting both expansion plans along with bottom-line margins of the global luxury industry due to higher rentals, thereby leading to a demand-supply mismatch," the survey said.
The survey, titled 'India Luxury Top Management Survey 2012', was jointly conducted by industry body Assocham and Yes Bank.
Domestic market for high-end products and services is estimated at over eight billion dollars and is currently growing at annual rate of about 20 per cent. It is likely to cross 14 billion dollars during the course of next three years on the back of rising per-capita income and evolving consumer trends.
"Finding the right quality infrastructure space has been the biggest impediment for global luxury firms," asserted the CEOs.
"Lack of quality infrastructure is a huge bugbear for luxury brands in India, thereby forcing them to go slow in their expansion plans and steep rentals together with high duties further impede the growth and development of the sector." Besides, inordinate high duties, varying tax structures, bureaucratic delays, red-tapism, exchange rate volatility, imposition of caveats, political and regulatory landscape are other significant challenges being faced by the luxury industry, highlighted the CEOs.