The Future of Luxury in India
The term ‘Luxury’ defines creativity and research while maintaining your aura and interdependence. It is about making an identity worldwide with that swift label you own and make every consumer in the world envy the resource that you keep in your hand. Everyone is familiar with most of the luxury brands in the world like Louis Vuitton and Mercedes which have made a subtle mark all over the world and originate from the western world. The real question is, “What is the future of India’s luxury market?”
The retail sector contributes to about 10% of the GDP of India and gives employment to 18% of the working population. This industry is certainly estimated to grow to $1 trillion by 2020. The current Indian luxury market size is $18.5 Billion. The luxury sector has encompassed an impressive growth of 340% in the number of Indian Ultra High net worth.
Taking an overview of the ground reality till date, Mumbai & Delhi lead in the figures of Ultra High Net worth Individuals, with the great Indian middle class being the most important driver of luxury in India. There has also been a considerable rise in shopping malls coming up with luxury showrooms, accompanied by premium and super-premium stores. Products such as accessories have become the stairway to an elite aspiration for masses. It is this desire that has led to the exponential rise of the market for knock-offs and first copies. Luxury retailers clear a large chunk of inventory during the sale period which showcases how the awareness and importance of the luxury brands are rising.
What lies ahead is the growing automobile industry. It is growing at a rate of 15% Per Annum with 35,300 units and is estimated to grow to 87,300 units by 2020.
What is driving this growth? There are some new product launches across price points which enhance dealer network beyond the metropolitan areas. Due to this increased focus on localization of parts and availability of robust financing options, we see the market paving its way and coming out like a star, ruling the automobile market. As for apparels, accessories, and footwear, analysts have predicted that Italian luxury brand stores are set to open about 200 stores by 2020.
About 150,000 high net worth individuals, with a net worth of $600 million-$3.1 million and with earnings more than $1.5 million per household, have been fuelling this unprecedented growth across the top 10 cities in India. The good news is total luxury goods retail value in India is expected to grow by 63% (ahead of China on 59%) by 2018.
As the wise men say, “Nothing can be achieved without hardships and hurdles.” The Luxury sector has to overcome a lot of challenges such as counterfeits, lack of infrastructure and pricing. Despite such challenges, the future of luxury in India seems bright enough to make a mark amidst the Indian population and culture.
Written by- Ms. Pranjal Pravin, Post Graduate Program in Business Class of 2019
Bocconi is a Top Bschool offering Luxury Courses. Luxury management Courses in India are few. SDA Bocconi Asia Center is now launching Executive Program in Luxury – https://www.sdabocconiasiacenter.com/executive-education/executive-program-in-luxury
