The issues that can be noted in the Indian luxury market with respect to the intent of AA to expand into India are not that different from what any other country would impose. Some of these issues as noted by Reddy (2008) in the Indian Luxury market are:
The customer knowledge on most luxury products is still dormant. American Apparel will have to bring the customers up to date on some of their products before they can hope to make sales
The demand is fragmented. There are clusters of demand in Mumbai and Delhi and rural wealth in some areas of Punjab, Gujarat etc. “But targeting this wealth is difficult as none of these markets are mature enough for a retail presence, neither do they have distribution points like multi-brand stores or specialty stores that the brands can use to promote themselves.” (Reddy, 2008, p.1)
There are supply side challenges to as there is a lack of real estate in some prime metropolitan areas.
There are concerns of distribution opportunities. So even if demands are created for American Apparel then distribution delivery charges might nullify opportunities
When people who travel have opportunities to pick up products abroad, they don’t need American Apparel selling the same product at a higher rate here. So American Apparel cannot make a profit expansion here without increasing demands.
The law and social aspects do not allow nor entertain the use of exotic skin products. This means that American Apparel will have to restrict some of its products and create niche marketing is necessary
In marketing some form of traditional style has to be emphasized, otherwise consumers might not buy it.
The proportion of counterfeits being bought in India is quite high as noted in a KPMG report (KPMG, 2014).