NEW DELHI -- As India's booming middle class shops, travels and eats out like never before, international glossy magazines are racing to the subcontinent to cash in on an advertising boom.
Lured by a growing pool of deep-pocketed readers and advertisers anxious to reach out to India's 300 million-strong middle class, some 10 foreign consumer magazines have launched Indian editions in the past two years, and close to 20 more are expected to start publishing in India in 2007.
Indian versions of Maxim, Marie Claire and Good Housekeeping are already on magazine racks; Vogue and others have announced plans to publish here. Even Playboy and Penthouse have indicated interest in coming to India, though they are still working to devise tamer layouts to suit India's more conservative society.
With advertising and profit growth slowing in their home countries in the developed world, big-name publications need new markets.
"Compared to developed markets like the U.S. and U.K. that are showing single-digit [annual revenue] growth in the entertainment and media sector, India has close to a 19% growth rate and a large, untapped market," says Smita Jha, a consultant at PricewaterhouseCoopers Pvt. Ltd. in New Delhi. "Moving to emerging markets like India becomes a natural progression for publishers wanting to expand."
Advertisers overall spent more than 130 billion rupees ($2.93 billion) in India in 2005, according to estimates by PwC, compared with 118 billion rupees the year before. Although magazine advertising accounted for less than 20% of the 63 billion rupees spent on print advertising in India in 2005 (much of the rest went to newspapers), analysts still expect magazine advertising to grow at a double-digit-percentage annual pace for the next five years at least, says PwC's Ms. Jha.
As in other countries, not all the trends are positive. Overall magazine readership in India is declining as television and the Internet establish themselves. With TV, radio and the Internet competing for advertisers, magazines could face more pressure in the future.
Still, most analysts believe the newest slate of high-end magazines will continue to attract advertisers for the next several years, making India a relatively bright spot on the global publishing map. International brands operating in India will prefer to advertise their products in magazines, analysts believe, due to their cachet and popularity among middle-class and affluent Indians. It is also more cost-effective to advertise in magazines than on TV.
India's economy is growing more than 8% a year. Indians spend about $14.4 billion a year on luxury goods, according to Technopak, an Indian research consultancy. With more Indians becoming fashion- and design-conscious, they represent a crucial new target audience for luxury brands.
A host of global brands with hefty advertising budgets are already showing up in India. A recent issue of the Indian edition of France-based luxury and lifestyle magazine L'Officiel -- one of the first such foreign titles to come to India five years ago -- included ads from brands like Chanel, Versace, Piaget, Ebel, Chopard, Breguet, Dior, Harry Winston, Canali and Burberry. There are also ads from many high-end Indian fashion designers.
A monthly print run of just about 45,000 copies of L'Officiel hasn't lessened interest from advertisers. Half the 300-odd pages of the magazine are ads.
"For Indians, luxury is money and wealth is indulgence and they are willing to spend," says Superna Motwane, editor in chief of L'Officiel India.
Maxim, a London-based men's lifestyle magazine that recently completed its first year in India, said it was able to sell all its advertising for the first year before it even launched there. "Name the industry, and they are our advertisers," says Piyush Sharma, chief executive officer and associate publisher of New Delhi-based Maxim India.
In India, only about 15 magazines now dominate the ad market, attracting some 80% of the money spent on magazine advertising. According to a study conducted by PwC, revenue in India's print-media industry is expected to grow at a rate of 12% a year over the next five years.
While most international publications are printed under license agreements with Indian publishers, -- partly to take advantage of existing distribution networks -- Condé Nast Publications recently decided to launch Vogue in India on its own.
"It shows our seriousness toward the Indian market that is showing double-digit growth," says Alex Kuruvilla, managing director of Condé Nast Publications India. The magazine is slated to hit stands this autumn.
In addition to the luxury brands that already have a presence in India, as a number of other luxury brands, including Gucci and Giorgio Armani, are slated to open their first stores by 2008.
"All these brands will look out for a cost-effective medium to reach their...target audience, and we will be here to provide that," says Mr. Sharma of Maxim India.
Write to Binny Sabharwal at binny.sabharwal@wsj.com
