(Bloomberg) -- Iconic American jeweler Tiffany & Co. is partnering with Mukesh Ambani's conglomerate to gain a foothold in the lucrative Indian market.
The New York-based jeweler plans to form a joint venture with a retail unit of billionaire Ambani's Reliance Industries Ltd. to open stores in Delhi and Mumbai by 2020, according to a statement Wednesday. Tiffany is targeting the world's second-biggest gold jewelry market where some consumers are moving away from the traditional Indian ornaments.
“There is a consumer in India who wants designs with western sensibility just the same as in the case of clothes where some western brands are doing well,” said Colin Shah, vice chairman of the nation's Gem & Jewellery Export Promotion Council.
The announcement comes two months after Tiffany said U.S. sales to Chinese tourists fell by more than 25% last quarter as visitors dropped in a fallout of the escalating trade tensions between the world's two biggest economies. For Tiffany, India presents a natural hedge, where sales of gold and diamond jewelry are expected to grow at an annual rate of as much as 7% in the next three to five years, according to Shah.
Sales growth in China is estimated to be either neutral or slightly negative from earlier projections of an increase of as much as 3%, according to Alrosa PJSC, the world's biggest diamond producer. Duties on jewelry imported from the U.S. into China were raised to 25% from 10% from June 1.
Read: The Tiny Deals Behind Mukesh Ambani's Bid to Take on Amazon
In India, Tiffany may also benefit from Ambani's ambitions to set up an e-commerce platform in India to rival Amazon.com Inc. For that, he's been forming partnerships with global brands and also acquiring smaller companies to build the model. In May, his group agreed to purchase British toy-store chain Hamleys.
To contact the reporters on this story: P R Sanjai in Mumbai at psanjai@bloomberg.net;Swansy Afonso in Mumbai at safonso2@bloomberg.net
To contact the editors responsible for this story: Sam Nagarajan at samnagarajan@bloomberg.net, ;Phoebe Sedgman at psedgman2@bloomberg.net, Bhuma Shrivastava
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