NEW YORK -- American jewelry retailer Tiffany & Co. is linking up with Reliance Industries, the conglomerate run by Asia's richest man Mukesh Ambani, to charge into India, with an eye on the country's booming luxury scene.
Through a joint venture announced Wednesday, Tiffany and Reliance Brands -- the group's retail unit -- plan to open shops in Delhi as early as this year and Mumbai in 2020. Reliance Brands, whose partnership portfolio includes the likes of Burberry and Giorgio Armani, operates over 470 stores and 340 shop-in-shops in India.
The tie-up reflects an increasing interest among international luxury brands in the Indian luxury market, buoyed by the country's emerging affluent class.
"Tiffany's emergence in these Indian commerce centers with their growing luxury consumer base presents a unique opportunity," said Philippe Galtie, executive vice president of global sales at Tiffany, in a statement.
The American company operates over 80 stores in Asia Pacific, including 34 in mainland China. But recent Chinese tariffs on U.S. jewelry imports are denting its profits there. Ongoing trade tensions have also led to a decrease in Chinese travels to the U.S., which traditionally accounted for a large portion of American luxury brands' sales in their home markets.
A weak yuan, which broke below 7 against the dollar this week, will also likely curb spending.
Meanwhile in India, the luxury market "continues to experience a high growth rate," consultancy Deloitte said in an April report.
"There is significant investment in boutique stores by luxury brands in luxury malls or hotels or by forming a joint venture with a local distributor," as a way to overcome market entry challenges including recruiting quality staff and real estate expenditure, the Deloitte report continued.
Even with Reliance Brands' retail experience and resources, Tiffany's still has to compete with other existing players in the Indian luxury market.
In the year ending June 30, 2018, three companies in Deloitte's fastest growing 20 luxury companies were Indian jewelers -- Tata Group-owned Titan Company, PC Jeweller and Joyalukkas India -- all with revenues exceeding $1 billion.