NEW DELHI: The Indian outsourcing story, hitherto limited to IT/ITeS, just got a brand edge. Well, make it a price warrior 'luxury' brand. The world's largest luxury goods marketer, Paris-based $17-billion Moët Hennessy Louis Vuitton (LVMH) is eyeing India in order to take on competition in its third biggest market, Japan.
The French luxury behemoth, which is in the process of picking a 20% equity stake in Puducherry-based leather goods manufacturer, Hidesign, plans to position the Indian brand against its nearest competitor, an American handbag & accessories brand - Coach - in the Japanese market, especially in the departmental store format.
Hidesign, will act as the affordable luxury brand from the LVMH stable and give the Japanese consumer a cheaper offering which Louis Vuitton hasn't been able to crack as yet.
Although, the details of the stake is still to be ascertained, the partnership would enable Hidesign, with a turnover of around Rs 100-crore, to get inroads into the international market being part of the venerable LVMH group. Talking to ET, Hidesign president Dilip Kapur said, "Our partnership with Louis Vuitton is at the operational, marketing and design front but all decision making will be ours. In addition to the equity stake, there is an understanding of mutual aid between the two brands." When contacted by ET, LVMH's India representative Tikka Shatrujit Singh said: "The deal (with Hidesign) is still under negotiation." He refused to elaborate any further on it.
Louis Vuitton is also opening its first manufacturing unit outside of France and Italy in Puducherry spread over 38 acres next to a planned Hidesign unit. The Hidesign project as its being called by the French luxury group, will entail in the MoU a non-competing clause with Hidesign.
Coach, the New York-based manufacturer of handbags and fine accessories, entered the Japanese market in 1988. Its eponymous brand occupies a unique price positioning, bang in the middle of European luxury brands and domestic brands, and is retailed as 'an accessible luxury' brand while a Louis Vuitton has a high-end luxury tag. With Hidesign in its stable, the French luxury giant, will be able to fight out the battle in the departmental stores space through the Indian brand. In fact, in 2005, Coach had accused Louis Vuitton of putting pressure on several Japanese department stores to unfairly deprive Coach of floor space.
Besides, entering the Japan market, Hidesign will now focus on a more stylish image at the retail front, as it opens its Luxe Renaissance stores across India and oversees. "We are now taking the next step as far as retail presence is concerned with a focus on our image. The old format stores with a stress on leather will be history," said Mr Kapur.
Plans are currently underway to open 11 of these Luxe Renaissance stores across Delhi, Chennai and Kolkata this financial year. Along with India, China is being looked at a huge market for the brand with six stores opening in the country. South Africa and Russia are the other two countries of where new Hidesign stores would be coming up.