Rise of Luxury Market in India

An interesting news piece caught my attention today – “India’s billionaire growth will beat global and regional average”. This is heartening, to say the least. Upon some further research, I found that India is already at the # 3 rank globally in the list of billionaires which is not bad at all. Those who like numbers – there are estimated over 2000 billionaires in the world today (mostly in the US) estimated to grow by 50% by the year 2027. India’s share shall grow from 5.2% to 10.0% during this period.

The life of rich and famous is undeniably ostentatious…..not every billionaire is a Warren Buffet. Where they live, what they eat, wear and where they spend their time and with whom, how they travel is distinctly luxurious. Growing numbers of such people is music to the ears of Global Marketing Managers of high street brands of the world. India alone has seen a meteoric rise of luxury products in the last few years. Some sources say that cumulatively the luxury market in India is close to USD 30 billion. From cars to cosmetics, hotels to restaurants, electronics to liquor, jewellery to furniture – there is a long list of brands that offer high end or luxury products or services. And, more or less, everyone seems to be doing well….

Steady strong economic growth, rapid urbanisation and higher disposable incomes, has helped propel growth of luxury goods. Increasing retail presence of luxury players across the country and higher numbers of brands entering the country has resulted in strong performance of luxury goods. On the down side, lack of suitable infrastructure, high tax rates (for sin goods), commercial rental costs and parallel growing market of counterfeits are going to give some headache to brand managers of luxury products, at least for some time.

India is no longer just a price conscious market….it is also moving towards being a brand conscious market. These hundred plus billionaires (assuming they live in India) and scores of millionaires wouldn’t dabble in anything if it is perceived as a luxury brand.

When it comes to making an entry in the Indian market, a franchise or a joint-venture model is the usual route taken by overseas luxury brands. A recent survey of 300 renowned global retailers in India, found that most international retailers opt for opening their stores in major metropolitan cities, such as New Delhi (79%) or Mumbai (68%), before gradually expanding to other tier-I locations, like Bangalore, Chennai, Kolkata, Hyderabad and Pune. So, it is possible that the next chapter of India’s luxury-goods scene will be written in smaller towns and cities beyond the metros.

Global brands that have flown over India better take notice now. Indian luxury market is not a blip on the screen, it is here to stay and grown. Governments might change, policies might differ but the growth trajectory shall be in one way one…..and that is up. With major economies far from booming, the only market that provides multiple benefits of growth in luxury segment, increase of billionaires, steady political climate is India. So, procrastinate at your risk…..

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