Following the COVID-19 pandemic, people are increasingly venturing out and spending significantly on luxury goods and experiences. It’s not surprising that, according to various estimates, India’s luxury market is poised for rapid growth, leading global brands to focus more on India.
But why is this happening? Let’s delve into why the Indian luxury market is growing rapidly and why it’s essential for investors to take note.
What’s Happening?
The landscape of luxury is changing. Previously, luxury meant European brands and their classic styles. But things are evolving. Awareness of luxury among Indian youth is increasing, and they prefer brands that understand their tastes and traditions.
According to Firstpost, a new class is emerging in India. It’s estimated that by 2027, the number of millionaires in India will increase by 69%, with over 19,000 ultra-high-net-worth individuals whose wealth exceeds $30 million. Not only that, but young people also play a significant role in this transformation. Millennials and Gen Z are rapidly advancing in the luxury market.
Why is the Indian Luxury Market Growing Rapidly?
Increase in the number of wealthy individuals: Reports suggest that the number of wealthy individuals in India is growing rapidly. According to a report by Goldman Sachs released on January 15, 2024, while in 2015, there were only 24 million people in India earning more than $10,000 annually, in 2023, this number increased to 60 million. This means that now, 4.1% of India’s population earns this much, leading to a shift towards premium products.
New businesses, strong middle class: Numerous new businesses are opening in India every year, creating not only employment but also increasing people’s income. Additionally, the middle class is steadily growing, with more disposable income than ever before.
Demand for luxury in smaller cities: Initially, luxury goods were sold only in major cities, but now there’s an increasing demand for them in smaller cities too. Luxury products are easily accessible in these cities through online shopping.
Role of Generation Z and Millennials
Previously, luxury meant only big houses and expensive cars. But now the story is changing. Younger generations in India, such as Generation Z and Millennials, are increasingly attracted to luxury items. For them, luxury isn’t just about cars or houses; it’s also about high-end fashion.
After the pandemic, Indians are more interested in spending on experiences than on property. Additionally, the ‘YOLO; effect, which suggests “you only live once,” is inspiring people to spend more on luxury products like watches, cosmetics, and fashion.
What Does it Mean for Investors?
The luxury market in India is growing rapidly, presenting several opportunities for investors. Some key sectors include:
Fashion: According to Statista, the revenue of the luxury fashion market in India is estimated to reach $1.56 billion by 2024. With the increasing demand for luxury brands, this could be an attractive sector for investors.
Jewellery: The revenue of India’s luxury jewellery market is estimated to reach $1.70 billion by 2024, according to Statista.
Hospitality: There is increasing demand for luxury hotels in India, making it a sector worth tracking for investors interested in the housing market.
Automobile: The sales of luxury cars in India are increasing, making it an attractive area for investors.
What’s Next?
India is one of the fastest-growing luxury markets in the world. According to a report by Bain & Company, India’s luxury market could reach $200 billion by 2030, which is approximately 3.5 times its current size!
That’s it for today. We hope you’ve found this article informative. Remember to spread the word among your friends. Until we meet again, stay curious!
*The article is for information purposes only. This is not an investment advice.
*Disclaimer: Teji Mandi Disclaimer
