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Favre Leuba is one of the oldest Swiss watch brands together with Swatch Group’s Blancpain. Everyone knows Blancpain but few remember Favre Leuba which had its heyday in the 1960s and 1970s. The descendants of the Favre family sold it in the 1980s, it belonged to LVMH in the 1990s and afterwards successive shareholders never managed to properly resuscitate the brand and make it reach its full potential.

Today a new chapter is opening for Favre Leuba under the controlling ownership of the KDDL group that runs India’s largest watch retailer Ethos. In a sign of the seriousness given to the relaunch, the new owners hired industry veteran of Patrik Hoffmann, former CEO of Ulysse Nardin. Hoffmann presented the newly revived Favre Leuba watch collection at the Geneva Watch Days earlier this month. It included vintage models from the 1960s and 1970s as well as new designs.

Industry watchers may regard Favre Leuba as yet another revival like Gerald Genta and Daniel Roth led by LVMH scion Jean Arnault or Universal Geneve spearheaded by Breitling CEO Georges Kern. But Favre Leuba presents a unique twist. It’s the first historic Swiss watch brand using India as the launchpad of its return. It will open its first mono-brand boutique not in Geneva or Zurich but in Mumbai or Delhi in the next few months. Starting in November, the brand’s first batch of watches will hit multi-brand stores around the world and sell online as well.

Focusing on India makes sense. Not only because Favre Leuba’s biggest shareholder is Indian group KDDL. The brand has historically had a big presence in India. It was the first Swiss watch brand to enter India in 1865 and it remained popular until the 1970s. Young people may not remember the name but those in their 40s and 50s will. Their father or grandfather owned a Favre Leuba and some of them are probably still wearing it.

POTENTIAL

“Two or three years ago, people did not realize the potential of India, now the whole world is talking about it,” Hoffmann told Miss Tweed at the Geneva Watch Days. As growth in China slows down and luxury spending has collapsed, particularly for high-end fashion and watches, India still presents a growth opportunity. The country’s GDP is expected to increase more than 7 per cent annually, outpacing forecasts of 5 percent growth in China. India is set to become the world’s third-largest economy and consumer market by 2027.

India has a strong culture of wealth and it is developing rapidly. As new wealth is growing, the potential buyer base is expanding beyond Indian aristocracy and established old business families. Luxury enthusiasts include young entrepreneurs, investors and high-profile executives. Now is the time to double up on India.

In recent months, many luxury brands have opened or enlarged existing boutiques. In November, Kering’s Brioni opened its first ever shop in India at the Chanakya luxury shopping mall in New Delhi.

In April, Hermès opened its third boutique at the glitzy Jio World Plaza, inaugurated last year in Mumbai. Many big brands including Richemont’s Cartier, Kering’s Gucci, Balenciaga, Saint Laurent and Bottega Veneta, as well as LVMH’s Bulgari and Tiffany & Co and Louis Vuitton also opened a shop there.

Mumbai counts the third-largest population of millionaires after New York and Shanghai. It’s the place to be for luxury brands. Jio World Plaza is the brainchild of Isha Ambani, daughter of India’s richest man Mukesh Ambani, who is chairman and managing director of the Reliance Industries empire. This year, Ambani held for his youngest son Anant the most extravagant wedding in recent history, lasting several months and attended by world leaders, CEOs, celebrities and Bollywood megastars.

The celebrations, estimated to have cost more than a $1 billion, included a three-day pre-wedding bash in the Western Indian coastal town of Jamnagar in March—which featured a private concert by Rihanna—and another ceremony in Mumbai with a Justin Bieber live performance. There was a party on a boat off Portofino. Guests were flown in private jets and the nearby Genoa airport was taken over for a week. The boat roamed about cities around the Mediterranean, holding parties with celebrities in every stop from Barcelona to Palermo, Rome and Cannes.

A video went viral showing some 10 witnesses and close friends receiving a Perpetual Calendar Audemars Piguet Royal Oak watch costing more than €100,000.

The over-the-top wedding is often cited as a good example of India’s voracious appetite for luxury. “India is becoming a global luxury destination and the Ambani wedding was a step in that direction,” explains Indian designer Rahul Mishra, the first Indian designer to show during Couture Week in Paris. Mishra dressed many people who attended the Ambani wedding including Facebook founder Mark Zuckerberg. “The Ambani wedding was great for the Indian economy,” Mishra told Miss Tweed, adding he knew many people, particularly craftsmen and small businesses who got work thanks to the event.

“Over the past ten years, the perception of India has changed dramatically and Indian brands are now encouraged to grow,” Mishra said. This week, Mishra will unveil in London a collection he designed for the Italian leather goods maker Tod’s. Like Tod’s, other western brands are tying up with Indian designers to widen their reach. In March, Estée Lauder launched a lipstick designed by Indian designer Sabyasachi Mukherjee. Sabyasachi, a major name in Indian fashion, is expected to see his brand’s revenue pass the €100 million mark this year, local industry sources say. Last year, Dior staged its first fashion show in Mumbai during which it celebrated India’s traditions of embroidery and craftsmanship. It has also launched a Lady Dior bag with an elephant on it targeting Indian consumers. Galeries Lafayette is planing to open two department stores in India, one in New Delhi in 2025 and one in Mumbai in 2026.

EXPONENTIAL GROWTH

The number of millionaires and affluent middle-class people in India is growing exponentially. This year, it overtook China as the biggest population in the world. It is expected to count 1.5 billion people by 2030. It’s also a young, connected population with a high birth rate.

“We will see significant growth in the luxury space in India over the next five to ten years,” Euan Rellie, co-founder of investment bank boutique BDA Partners predicted at the Luxury at the Summit by Miss Tweed in Val d’Isère in April. “Today is India’s moment. You’re going to see a strong acceleration of India culturally, politically and even militarily. India is a nuclear power now and is the fourth-biggest defense spender in the world.”

Richemont’s Van Cleef & Arpels is looking to enter India in the next two years, according to Indian luxury industry sources. Meanwhile, Cartier already has two boutiques and has plans for more, they say. Cartier has a person in charge of the Indian diaspora around the world, which is mainly concentrated in the Middle East, the U.S. West Coast and Great Britain. Cartier has understood that Indians travelling and shopping abroad represent a strategic clientele. The French jeweler regularly organizes events just for them. “The smart brands are those brands who know how to engage with the Indian consumer globally,” said Rellie from BDA Partners.

Last week, independent watchmaker Breitling opened a boutique in Bangalore, its second in the country and it has plans for two more.

Kering’s Saint Laurent, Bottega Veneta and Gucci are also expanding in the country and looking for the best spots in malls. Same for LVMH’s brands. Louis Vuitton has three boutiques in India, Dior has only one. When asked about India, Chanel told Miss Tweed it had five standalone boutiques in India including four in the New Delhi region and one in Mumbai. However, only one sells fashion, the others sell only perfume and beauty products.

“At Chanel we are always reviewing markets around the world where we want to further develop,” the brand said in an email. “However, we don’t have any specific updates to share at this time.”

India’s potential for luxury lies more in watches, jewellery, handbags and shoes than ready-to-wear though appetite for that category is growing fast, Indian specialists say.

The growth rate of jewellery brands such as Bulgari, Cartier and Tiffany & Co is in the high double digits in India, local industry sources say. However, they start from a low base. While Swiss watch exports to India are now 1-2 percent, compared with more than 30 percent to China, some industry experts predict India could represent up to 10 percent in ten years’ time.

CHINA VERSUS INDIA

In India, the affluent middle class is rising fast, but for the moment it’s not as big as China’s. It may never be. Consumers are not as eager to spend as were the young Chinese 10 to 20 years ago when they became millionaires overnight with mobile applications and real estate deals, luxury experts say. “The Indians love their heritage, their jewellery, their silks, saris and perfumes,” points out Bénédicte Épinay, managing director of the French luxury association Comité Colbert. “They do not have a huge urge to westernize themselves like the Chinese twenty years ago, but the middle class is becoming increasingly open to adopting Western luxury brands and culture.” In response to luxury brand’s growing interest in India, Comité Colbert is organizing a conference in Paris in early October during which the Boston Consulting Group (BCG) will present a study on luxury in India. Chanel CEO Leena Nair, of Indian descent, will speak via a video link.

In contrast with China’s socialist values, India has a cultural understanding of luxury, owing to the legacy of maharajas and the tradition of lavish weddings, India experts say. It is socially accepted in India to flaunt your wealth and success. By contrast, China has been cracking down on people showing off their lavish lifestyle on social media as part of a wider campaign to show restraint and the communist party’s efforts to achieve “common prosperity.”

“We are really at the beginning of luxury brands entering India,” explains Pierre-François Marteau from BCG in Paris. “It’s been a slow start”. For more than two decades, luxury brands have been looking at India. But there was too much red tape, corruption and too few malls or chic areas where they could open a boutique. Also, import duties remain above 20 percent and rates vary depending on which region products are sold, making exports even more complicated.

In March, India signed an agreement with the European Free Trade Association (EFTA) whose members are Iceland, Liechtenstein, Norway, and Switzerland. It plans to phase out the current tax of more than 20 percent to zero over the next seven years. This will make Swiss watches much more affordable in India. Currently, retailers take a margin cut to compensate but prices are on average still 5-10 percent higher than in Switzerland.

While there is much enthusiasm about India, the country’s luxury market is never going to be as big as China’s, experts predict. “In terms of size, India cannot be the new China,” explains Marteau. “If India represents a top 10 market in five to 10 years, brands will be happy, I think.”

India is not equipped yet with the same infrastructure as China in terms of public roads, digital links, high streets and malls, but things are changing rapidly.

Today in India, there are about five malls who can welcome top luxury brands, but that number is set to rise as new malls are being built or refurbished and not only in the two big shopping meccas that are New Delhi and Mumbai but also in other regions such as Bangalore, Calcutta and Chennai, cities full of affluent shoppers eager to spend money on luxury goods.

The Indian luxury party only got started. Luxury brands cannot afford to ignore it.