Be it a family holiday to exotic locations in Europe or US, sporting branded jewellery, driving around in top-end SUVs, going out for a fine dining in five star hotels, India's luxury life style market has remained largely affected by the economic slowdown in 2013 and touched around $8.5 billion, according to a recent paper by the industry body Assocham.
“A young demographic profile, growing number of millionaires and billionaires and aspirational integration with the globe are all among the driving factors for the luxury markets which see a big potential in India. Since the high-end products and life styles are not price elastic, they don’t get much affected by the slowdown, says D S Rawat, Secretary General, Assocham.
Assocham's recent paper on “Luxury Industry in 2013-14” reveals that the despite continued global economic slowdown, the luxury market in India has touched around $8.5 billion with growth rate of 25-30% in 2013 as against $6.5 bln in 2012 and estimated to cross $14 bln during the course of next three years.
The sectors such as five star hotels and fine-dining, electronic gadgets, luxury personal care, and jewellery performed well in the year of 2013 and are expected to grow by 30-35 per cent over the next three years. Big ticket spends such as on luxury cars mainly SUV are likely to continue, growing upwards of 15-20 per cent over the next three years, driven by consumption in smaller towns and cities.
While releasing the paper the industry body said the luxury market is poised to expand three-fold in next three years and the number of millionaires expected to multiply in another four years.
“With increasing brand awareness among the youth and purchasing power of the upper class also in Tier-II & III cities in India where luxury cars, jewellery and exotic holidays and destination weddings are no strangers”, said Mr Rawat.
The chamber paper segregated the luxury sector into products: apparel and accessories, pens, home décor, watches, wines & spirits and jewellery, services: spas, concierge service, travel & tourism, fine dining and hotels and assets: yachts, fine art, automobiles.
The Associated Chamber of commerce and Industry of India (ASSOCHAM) further stated that 2014 will be a good year for the Indian luxury market though the country will be facing general elections and not much economic reforms may take place. The market will take off due to a good economical context and the increase of consumers' spending pattern and the craze increasing for branded products especially amongst the youth.
“Luxury jewellery, electronics, SUV cars and fine dining have grown beyond expectations, while apparel, accessories, wines and spirits have continued their strong growth in 2013, according to the ASSOCHAM assessment. Consumption of branded wine is likely to register over 30% increase in the metro cities.
The combined effects of economic growth, globalization, and internet/social media diffusion have created boom in the luxury industry. However, as the dominant luxury consumers have changed, their consumption habits are also expected to evolve over time.
Some of the significant players across various verticals who performed well in 2013 included - GUCCI, Christian Dior, Louis Vuitton, Ocean Style Yachting, Canali India, L’Oreal Luxe India, LVMH India, Judith Leiber, The Phenix Mills, The SPA Group, Geetanjali Group, The Bauers, Starwood Asia Pacific Hotels & Resorts, Da Milano Leathers, Reliance Brands, Hidesign and others.