The “Luxury” You Cannot Ignore

A growing economy opens doors to wide arrays of choices for its citizens with the global attention that it attracts. With increasing incomes & brand awareness initiatives trends are fast changing from buying basics towards rising indulgence in luxury.

The Indian luxury market has grown at 20%, reaching a market size of $2 billion. A study by Wealth-X estimates that there are:
• 8,200 ultra-high net worth individuals (UHNW) in India with a combined fortune of $945 billion.
• Also there are 115 billionaires in India worth a combined wealth of $195 billion.
• And atleast 4 ,960 Non-Resident Indian (NRI) UHNW individuals with a combined worth of about $465 billion

Apart from these numbers the growing focus of the luxury brands towards the BRICS nations as their next big market is expanding the base of luxury assets in the country. Also, this growth is not concentrated in metros; a case in the point can be evidenced from the fact that 15 out of the 18 new showrooms in the last one year have been added in non-metros.
However, at 1 per cent of the global luxury market the India market still has long way to explore the luxury market to the fullest. The growth is still not smooth sailing for luxury market which has various roadblocks to overcome
• The 100% FDI in luxury retails requires the compliance of 30% local sourcing, a clause which many players find difficult to comply with
• Import duties are high
• There are not enough quality real estate available
• Indian consumers are still price conscious

But the brands are still holding grounds & exploring various investment options. The country which is growing as the fastest growing economy is still very naive to the luxury market. A few initiatives can boost the sector further
• Educating or creating awareness among the masses is certainly essential
• Creating opportunities for consumers to experience the product
• Reaching new consumers while retaining the loyalty of existing ones is critical
• Customization also helps
• Using the right mix of media to reach out the target audience is required.

With a changing trends in the income & spending habits the potential for this industry can no longer be ignored.