For decades, India has reigned as the second largest consumer of gold with a rich history and a burgeoning appetite for jewellery. Yet, foreign jewellery brands that have captured noteworthy market share in other major jewellery markets have struggled to make inroads into India, both in terms of reach and sales – except for Bvlgari.
Bvlgari was among the first ever world-renowned luxury brands to acknowledge India’s luxury market potential by enrolling an Indian, Priyanka Chopra Jonas, as a global brand ambassador. The brand has made bold moves by bringing India-specific jewellery pieces to a country already inundated with quality choices from homegrown brands.
However, these strategic moves have paid off for the brand with its India special jewellery, selling out. The Roman jewellery brand owned by French conglomerate LVMH (Louis Vuitton Moët Hennessy) has relished over 100% growth in the last 18 months in India and is eager to grow further and faster.
In an exclusive interview with Shilpa Dhamija in Geneva, BVLGARI CEO JEAN-CHRISTOPHE BABIN speaks about his love for India and Bvlgari’s eagerness to grow despite challenges with India’s limited luxury retail infrastructure.
What makes India a unique market for global jewellery brands? How would you describe Bvlgari’s journey in India so far?
The unique thing about Indian consumers is that they manage the paradox of being Indians and global citizens at the same time. When Indians buy jewellery for important occasions such as weddings, they tend to pay a lot of respect to their own traditions. As a global luxury brand, we have to integrate this uniqueness of India’s consumer behaviour into our creations without changing our brand DNA.
Luckily our brand, which is Roman, has similarities with the jewellery preferences of Indians, such as contrasting colours. However, we have to go beyond the similarities to succeed in India. We are not only bringing our best work to India but also creating unique pieces specifically for the market. Something that has meaning for Indians, such as the Mangalsutra for women and the Kada for the gentlemen.
By bringing special India jewellery to the market, we have a better and faster chance to resonate with the emotions of the Indian consumers, than brands who impose their global jewellery here.
Historically, Bvlgari has been a more rose-gold brand than a yellow-gold brand. But because Indians like yellow gold, we are producing a lot of the main references of our jewellery in yellow gold for India.
To mark respect for the country, we have Priyanka Chopra Jonas as our global ambassador. She has been a friendof mine for 20 years. The Mangalsutra was her idea and we made it with her guidance.
India, like China, has long been a significant consumer of gold and jewellery. While global jewellery brands have rapidly expanded in China, why are they paying attention to India only now?
I have been pioneering the scope of growth in India much before China, ever since my days as the head of Tag Heuer watch brand, more than a decade ago. Back then, Tag Heuer was one of the leading watch brands in India. It was also easier to sell watches than jewellery because watches did not require Indianisation.
China has proven to be a huge market for the jewellery category but like any other market it will reach a plateau point. When that happens, it will not contribute to the brand or category growth as much as it did five years ago. Therefore, obviously the only other big growth opportunity is in India.
India has less than half a dozen luxury malls. How important is it for India to have more luxury malls to attract more foreign jewellery brands? Are highstreet shopping districts in India not viable spots for luxury stores?
Bvlgari has 140 years of experience in selling luxury. We know that eventually most of the luxury business is made in malls. If you look at high street areas like Fifth Avenue in New York or the New Bond Street in London, they are great locations, but the traffic is not huge, and they are thus not as productive as malls for luxury.
In China, a lot of the retail space was built within the last 25 years. It does not have traditional high street areas like Europe. In China luxury has been booming because of more malls.
In the US, where the cost of construction and manpower is much higher, malls are very profitable. Japanese department stores which are usually costly are also profitable. Whereas in India, the cost of constructing a mall and manpower is much cheaper. So, I don’t see why there can’t be more luxury malls in India as there is scope for them to be profitable.
Our boutiques perform well in India’s luxury malls, generating nearly 80% to 90% of the revenue that our luxury mall stores achieve in other markets.
Is India a profitable market for foreign jewellery brands like Bvlgari?
For us it is less profitable because we have more import taxes in India than other markets. But this is not the major issue for us. The major issue is the lack of luxury malls and locations in India. If I could, I would open 10 stores tomorrow in India, but I can perhaps only open three more. Maybe one in Hyderabad, Bangalore and maybe another one in Mumbai and Delhi. While in China, I can open many more.
In India and China, the distribution of wealth varies. In China, wealth is concentrated in a few cities. For example, Beijing and Shanghai represent 60% of luxury spending in mainland China. Whereas in India, wealth is more widely spread.
To cater to this widely spread wealthy population in India, we need more luxury malls in more cities to host more luxury stores. India has too many lifestyle malls. On the contrary there aren’t enough luxury malls. There needs to be a balance.
A widely spread wealthy population also means that we need to build on India’s luxury e-commerce to be able to reach these places.
What are Bvlgari’s expansion plans in India? Will we see any new products designed especially for the Indian market in 2024?
We have projects coming up in Bangalore and Hyderabad. But they are not enough.
As for the new products we are working on new things with Priyanka. Both our India special products – the Mangalsutra and the B.zero1 Kada are already out of stock.
Also, our Cabochon jewellery collection, which was earlier only made in rose and white gold, is now also made in yellow gold for the India market.
How does Bvlgari plan to expand its production capacity?
Bvlgari currently has Europe’s biggest jewellery manufacture, located in Valenza, Italy, spread across 160,000 square feet. We are adding two more units to it to make it the largest jewellery manufacture in the world. Here, we will also grow the strength of our master jewellers from 800 to 1600 by 2029.
We will also build a jewellery school in collaboration with some institutes because jewellery making is not taught so much in Italy.
In the last three years, we have revamped our three watch-related manufactures and are expanding them further to double or triple our capacity.
At the same time, we do not plan to double or triple our volume because we want to remain a very exclusive brand.
Does Bvlgari source diamonds and other gems from India for its products?
India is a major sourcing hub of finished gems for Bvlgari. If we are looking for gems for a piece that could cost €3 or €4 million, then we decide the cut and work together with the India cutting partner.
Other than India, which countries are emerging as promising markets for Bvlgari?
In the last 18 months we have grown more than 100% in India, not considering the growth seen in Jio World because it has just opened.
Business from the Chinese buyers continues to grow. The growth is less than pre-covid levels, but they continue
to grow; whether they are in the mainland or travelling.
Other markets with growth opportunities are Japan, South Korea, Philippines, Thailand, UAE, Saudi Arabia and the US.