Reduce import duties on luxury products, pleads fashion brand KenzoDecember 11th, 2008 - 11:48 am ICT by IANS
New Delhi, Dec 11 (IANS) Steep import duties mean luxury fashion products are priced 15 percent higher in India than in their country of origin and a reduction in rates will actually increase government revenue from their sales, says the international commercial director of leading fashion brand Kenzo.”We pay around 45 percent taxes to import our goods to India and this affects the retail pricing of the product. The pricing of these items is almost 15 percent higher than what you will get it for in Europe,” Jean Keller told IANS in an interview.
“The laws here are very stringent and it would be nice if the government did something about this,” he added.
“Look at it this way,” Keller explained, “if import duties are lowered, the prices will come down and sales will increase, leading to even more goods being brought in.
“The higher the sales, the higher will be the revenue to the government by way of sales and other taxes,” Keller added.
The high duties apart, the fact that there is a flourishing market in India for foreign luxury goods can be gauged from the fact that brands like Kenzo are looking to ramp up their presence in the country despite the global financial meltdown.
Owned by LVMH, one of the biggest luxury groups in the world, Kenzo has ready-to-wear, accessories and home furnishing lines. For the moment, it has introduced only its men’s wear and accessories sections and plans to shortly introduce a women’s wear line.
“Men are easy to understand whereas women are always a bit fussy about their clothes. So, it is a challenge for us to meet their expectations and we will do our research to match to their style and tastes (before introducing the line),” Keller explained.
“We will launch the women’s line here in another two years. It will comprise mainly of long evening gowns, dresses, skirts and jerseys,” he added.
In 2005, Keller had come to India for the HT Luxury Summit but it took him almost three years to introduce the Kenzo brand here.
According to him, the brand had done its homework of calculating the number of millionaires and billionaires that India has and only after loads of mathematical calculations did it launch here in September.
Kenzo has two stores in India - one in the plush DLF Emporio Mall in Vasant Kunj and the other in Mumbai’s JW Marriott Hotel.
Elaborating on the sales aspect of these two different settings, Keller stated: “Delhi’s clientele is very different from that of Mumbai, as in the former you have more entrepreneurs whereas many Bollywood celebrities and foreigners throng to the Mumbai outlet.”
“Delhi is more like a commercial destination because in a luxury mall like Emporio, people come in for serious shopping whereas in a hotel, after pampering themselves with spas and massages, people drop in to check out the product. In both cases, the response is fantastic,” he added.
Talking about his expansion plans Keller said he was in no hurry, as finding a perfect location was of utmost importance.
“The real estate market in India is definitely expensive but that does not mean that we compromise with our location as we are one of the pioneers in luxury segment and our focus is to find a luxurious place for our brand expansion,” he said.
In another two years, the company is planning to double its stores in Delhi and Mumbai and then foray into cities like Bangalore, Chennai, Hyderabad and Ludhania.
The men’s range is priced between Rs.7,000 and Rs.150,000.