India’s Reliance building luxury mall inside $1b

Indian tycoon Mukesh Ambani is betting a shopping palace within a $1 billion Mumbai business showcase will tap into surging demand for Western luxury goods, installing his Reliance empire as a portal through which most of the biggest brands must pass.

Though still small for a country of its size, India’s luxury market is set to nearly double in size to nearly $5 billion within five years, Euromonitor estimates. Targeting that growth, Reliance is building a mall with dozens of outlets for powerhouse brands from Louis Vuitton to Gucci, documents reviewed by Reuters show.

The ritzy mall, Jio World Plaza, is the centrepiece of Reliance’s bid to lure uber-rich Indians eyeing expensive bags or shoes. Luxury dominance would come on top of its number one position in India’s nearly $900 billion retail market, where it faces intense competition in e-commerce and supermarkets from the likes of Amazon (AMZN.O) and Walmart (WMT.N).

Three people with direct knowledge of Reliance’s strategy said the push is aimed at leveraging foreign brand partnerships and being ahead of retail rivals in luxury offerings.

The total cost of developing the Jio World Centre - a giant commercial and cultural hub in Mumbai’s Bandra Kurla business district that houses the luxury mall - is upwards of $1 billion, a person with knowledge of the matter said.

The hefty investment by Reliance, with a market value of $238 billion, shows the drive of Ambani’s family to expand in luxury - especially his 30-year-old daughter Isha, closely involved in directing the push.

“Global brands want to be here (India), Reliance is trying to drive that boom and act as a catalyst,” said a second person with knowledge of Reliance’s strategy.

The sources declined to be identified because they’re not authorised to disclose Reliance’s strategy publicly.