India's luxury market is undergoing a dynamic transformation, driven by a rise in high-net-worth individuals, a growing middle class, and increased disposable incomes. Global brands are increasingly targeting India for expansion, especially as opportunities in China diminish. The luxury sector is projected to grow from $8 billion to $14 billion by 2032, with strong demand across various categories. As brands adapt to Indian tastes and reach smaller cities, the market is set for significant growth, making India a key player in global luxury retail.
India's luxury market is experiencing an exciting transformation, fueled by a surge in high-net-worth individuals (HNIs), a burgeoning middle class, and increasing disposable incomes. Global luxury brands are setting their sights on India, recognizing it as a key player in the expansion of premium products. As wealth grows and aspirations rise, India is emerging as a crucial market for luxury retailers, a trend that has accelerated in the wake of the pandemic.
A significant shift is occurring as global brands seek to diversify their markets. With an economic slowdown in China, luxury giants are looking beyond traditional markets, and India is quickly becoming a favored destination. "India is one of our fastest growing markets though our presence is currently concentrated in Delhi and Mumbai. Over the next decade, we anticipate India to become one of the most promising markets for the luxury industry, particularly for fine watches," stated Jean-Marc Pontroue, CEO of Panerai.
To engage more consumers in India, especially given the limited availability of luxury real estate, brands like Bvlgari are tapping into the online marketplace. Recently, Bvlgari launched its first digital boutique in India in collaboration with Tata CLiQ Luxury. "The luxury market has grown a lot over the last decade and, driven by China, the boom has been extraordinary," remarked Bvlgari’s CEO Jean Christophe Babin. He believes India holds immense potential as it evolves into a significant market for luxury brands.
This "China+1" strategy is gaining traction among Western companies as they diversify operations to mitigate risks associated with geopolitical tensions and post-COVID challenges. India, with its growing wealth and vast population, is seen as an ideal locale to reach an expanding consumer base. Demand for luxury products in India is on a steady rise, with the luxury segment demonstrating consistent growth since the pandemic.
Anurag Mathur, a partner at Bain & Company, noted, "In terms of the depth of luxury buying, India is still more than a decade behind China, but the reconstitution of consumption in China and the rising population of HNIs in India have certainly piqued brands' interest to pursue India in a big way."
The premiumization trend is evident across various sectors, particularly in e-commerce. Zeba Khan, Amazon India’s director of fashion and beauty, highlighted that "sales of gold and diamond jewellery, including lab-grown diamonds, are seeing five times increase over last year, while sales of premium watches have grown six times over the previous year." This trend extends to the automobile sector, where manufacturers are experiencing an uptick in demand for high-end features.
Not only are established brands investing heavily in India’s luxury market, but new players are also entering the fray. Swiss watchmaker Charriol, Italian brands Aquazzura and Golden Goose, and British textile company Christy are among the latest entrants. Coralie Charriol, CEO and creative director at Charriol, expressed optimism, stating, "Indians are travelling more and for us, it is the right time to start in India."
India's economic boom is reflected in the increasing number of billionaires residing in the country. According to the 2024 Hurun India Rich List, India now boasts 334 billionaires, an increase of 75 from the previous year. This wealth growth is driving demand for luxury goods not just in major cities like Mumbai and Delhi, but also in emerging markets such as Hyderabad, Ahmedabad, and Chandigarh.
The luxury retail market in India is valued at approximately $8 billion, with projections indicating growth to $14 billion by 2032, according to analysts at BCG. Rado, a prominent watchmaker, has reported record sales in 2024, with CEO Adrian Bosshard attributing success to "our high-tech ceramic products and qualitative distribution network."
Luxury brands are also adapting their offerings to resonate with Indian consumers, introducing exclusive collections and festive packaging. Swiss chocolate brand Laderach has seen a 15% year-on-year growth since its launch in India in 2023. "Luxury brands are also tailoring their products to suit Indian preferences," noted spokesperson Sanskriti Gupta.
Real estate developers like DLF are witnessing heightened interest from international luxury brands eager to engage with India's youthful, digitally-savvy audience. Pushpa Bector, senior executive director at DLF Retail, commented, “Retail spaces like DLF Emporio and The Chanakya have set the stage for this influx, and we are actively engaging with several luxury players planning their India foray.”
Platforms such as Ajio Luxe and Tata Cliq Luxury are instrumental in helping global brands reach smaller cities and towns. Namit Puri, India leader of consumer goods practice at BCG, observed that "rising affluence and aspiration in cities like Hyderabad, Ahmedabad, and Chandigarh are expanding the market beyond traditional metros."
Looking ahead, analysts expect India's luxury retail market to continue outpacing the general retail sector. Deloitte India’s Anand Ramanathan shared, "While the overall local retail market is expected to double its growth by 2030, luxury retail is projected to grow six times," highlighting the increasing enthusiasm for high-end products.
As India’s affluent class continues to grow, global luxury brands are positioning themselves for long-term success in the country. The emergence of a younger, wealthier, and more aspirational population presents a golden opportunity for luxury brands to expand their reach beyond major cities, embracing a pan-India approach.
With rising wealth, increased spending on premium goods, and global brands eager to invest, India's luxury market is on the brink of a significant boom. The coming years promise to establish India as a formidable player in the global luxury retail landscape, as both international and domestic brands capitalize on the growing affluence of Indian consumers.
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