The Indian luxury sector is a rapidly growing industry. Pegged to grow to approximately USD 18 billion this year, the market is increasingly encapsulating travel, art, real estate, cuisine and beverages, technology apart from the traditional areas of apparel, accessories, lifestyle, automobiles, gems and jewelry in its giant stride.
The Indian Luxury Consumer
The number of ultra HNIs grew to 146,600 in FY16. India’s number of billionaires and millionaires ranks number 4 and number 8 in the world respectively. The average age of an Indian ultra HNI is reducing, and nearly half of them are now less than 40 years old. Service areas such as fine dining, electronics, luxury travel, luxury personal care and jewelry saw increasing revenues and are expected to grow by 30-35% over the next three years. Spending on luxury cars continue to rise growing upwards at 18-20% over the next three years.
- Online shopping - With the rapid rise of online shopping for luxury brands in India, online luxury stores saw investments of US$35 billion in 2016, which are expected to double by 2020.
- Slowdown in China’s luxury sector - With the recent slowdown in the luxury sector in China(poised to become the world’s second largest luxury market by 2020), global markets have shifted their focus to players in India. India’s luxury sector is still in its emergent phase and will have many opportunities for future expansion and diversification.
- Government initiatives - The government, too, has taken progressive steps to make the process of entering the Indian market easier. Key among these is the Make in India, Digital India, and Smart Cities initiatives.
- Other factors - While these reforms are expected to help bring in more luxury brands to the country over the next few years, a young demography, strong economic fundamentals, and rising income levels serve to be the force multipliers responsible for the future growth of India’s luxury market.