The Boom of Luxury Market in India

The Boom of Luxury Market in India

This is a generation of millennials where people prefer pleasure and indulgence rather than just possessions. And that defines luxury. Luxury is anything that adds to pleasure or comfort and is more than just a necessity. According to Aditya Singh, Head, Jewellery Business Division, Tanishq Luxury is a pleasure that can be obtained rarely. Any pleasure obtained rarely incurs a considerable cost as that pleasure is the epitome of quality for the specific consumer. So, luxury is any expenditure that goes way beyond the necessary.

Luxury to different people can mean different things. To some, hiring a full-time domestic servant may be a luxury, and for others, a comfortable stay at a branded hotel may be a luxury.

In this article, however, we will talk about luxury goods from an economic point of view. We will also talk about luxury brands, the market scene in India, global brands in India, luxury management, and career prospects in the luxury segment.

What are luxury goods and luxury brands?

Luxury goods are often synonymous with superior goods and are generally considered goods at the highest end of the market in terms of quality and price. Haute culture clothing, accessories, and luggage are some examples of classic luxury goods. Luxury goods often indicate status and are called ‘positional goods’, indicating the owner’s position in society.

Some luxury goods may perform a function similar to ordinary goods but possess high levels of craftsmanship, advanced design, superior quality components, or other improvements. Luxury car brands like Porsche function the same way as other cars but boast of more excellent performance and comfort.

If any brand, most of its products are luxury goods, it is labeled as a luxury brand. They deliver a superior experience at two levels- product and experiential. At the product level, they satisfy the functional aspects like craftsmanship, precision, materials, unique design, extraordinary product capabilities, technology, and innovation. It appeals to consumers’ emotions and offers at the experiential level. For example, Rolex symbolizes heroic achievement, while Tiffany symbolizes love and beauty. Surprisingly, most luxury brands have a rich pedigree and extraordinary history.

With more than 50 brands under its hat, LVMH (Louis Vuitton Moet Hennessy) is the world’s largest luxury goods producer.

Understanding the Indian luxury market

To understand the luxury market in India, we need to consider the historical and heritage perspective of luxury in India. As Bernard Arnault rightly said, luxury is a business where you need to build on heritage. The concept of luxury in India or any country originated from the rich or the aristocrat, and the rich were mostly the kings and emperors. They could be rightly considered luxury icons or brand ambassadors of the historical past. Let’s look at the precious luxury goods ( specifically the jewels, clothes, and luxury facilities enjoyed by the Kings and the queens of India. For the Indian masses, they represented the epitome of luxury, and the Indian luxury psyche is primarily motivated by that even today.

Luxury jewelry in historical India

  • Sapphires or Golconda diamonds, Indian Royals have owned or worn it all. Let us look at some of the luxuries adorned by these royals.
  • Patiala Ruby Chocker– It was created by Cartier Paris in the year 1931 and carried six layers of rubies, diamonds, and pearls on its sides. The Maharani of Patiala. wore it
  • Diamond Crown– Maharaja of Kapurthala had an eye for grandeur, style, design, and presentation. It can be known from the crown made entirely of best quality diamonds, a pearl necklace, and a bejeweled diamond belt that the Maharaja used to wear.
  • Star of South Diamond Necklace– Maharani Sita Devi of Baroda wore this. It had 78.5 carat English Dresden diamond in it. It was a 3-tiered 128-carat diamond. The Gaekwad of Baroda, Mulhar Rao, brought it for 80,000 pounds or about 20 million INR
  • Kundan Har- Maharaja Prabhu Narayan Singh of Benaras wore this.   This was made with the most precious stones found in the country.
  • Patiala Necklace consisted of 2930 diamonds with the world’s 7th largest diamond, a 234-carat yellow diamond, as its centerpiece. It contained diamonds, topazes, rubies, zirconia, citrine, quartz, platinum, and Burmese rubies.
  • Diamond Serpech- This was won by Maharaja Duleep Singh of Lahore, the last Maharaja of the Sikh Empire. The Serpech had three plumes of many diamonds with an emerald as the centerpiece.

 

Luxury Clothing in historical India

The Maharajas used to wear garments made of silks, velvets, brocades with gold or silver embroideries, and artworks along with diamonds, pearls, and other precious stones embedded in the dress. They used to wear belts, turbans, or crowns with bejeweled diamonds and pearls. The queens used to wear sarees with gold embroideries and precious stones embedded in their falls.

Luxury Carriages in historical India

The luxury carriages used to be gold or silver plated chariots on four wheels which were spacious and lavish from the inside. Generally, well-bred royal horses were used to drive them. Elephants also served as carriages, with the head of the elephant and the seat enamored with jewels.

Comparison of modern luxury in the world and historical luxury in India

Modern luxury focuses more on comfort, speed, ease of usage, and prestige value. The historical saga of luxury in India focussed on pride and prestige value reflected by the crude showbiz of the richness more than ease of usage. Comfort was epitomic in the historical luxury in India.

The social changes that happened to redefine the luxury scenario in India

With the changing world conditions and massive social changes, mainly the growth of democracy, socialism, and communism affecting different parts of the world, the masses took over the world. The same occurred in India. First, it gained independence from the Indian kings and queens with the advent of the Britishers, and then it gained independence from the Britishers to finally carve their destinies. The Royals did not write Destiny. The masses wrote it, so the luxury perspective of destiny was to suffer a jolt. After 50 years of independence and stupendous economic growth, we have produced billionaires and demi- billionaires who can conceive the future of the luxury industry and market in India. There are more than 166 billionaires in India, and continually growing. Despite of all this, the luxury psyche of India is still rooted in heritage and kingly past.

If we consider the hierarchy of needs or motivation and base it on society in general, the billionaires of India lie within the specific category shown.

 

Reasons for the current growth of the luxury market in India

  • Growth of billionaires and semi-billionaires
  • Growing brand consciousness among people
  • Exposure of the population to different aspects of luxury through the internet and other mediums
  • Concerted efforts by luxury brands to increase the luxury market share in India
  • Indian tradition likes to provide meaning to objects. Luxury goods and brands get symbolized by this aspect of Indian culture ( like a big fat Indian wedding, festivals, and gifts) or resemblance of luxury goods with symbols like purity, strength, divinity, and such.

 

Check this Ad by Tanishq 

( Image source: Tanishq)

  • The growth of the luxury market in the Asian continent and surrounding countries. Asia accounts for 40+ percent of the global luxury sales volume, and there is a luxury brand craze
    sweeping countries like China, Japan, and Singapore (D‘Arpizio, Levato, Prete, Fabbro, & Montgolfi,2019).
  • Luxury brands are providing a new identity for the nouveau rich, which they are cherishing and yearning to maintain
  • Indian stars and celebrities are glorifying the luxury aspect

According to ASSOCHAM, the Indian luxury market is valued at $18.5+ billion and is expected to reach more than $100 Billion in the next 7-8 years. The revenue from the luxury goods market amounted to US $8 billion in 2022 and is expected to grow by 1.63% CAGR. Luxury watches and jewelry is the largest luxury segment in India.

 

The largest share of the luxury market in India is held by LVMH (15%), Estee Lauder ( 10%), Loreal ( 10%), Kering, Kalyan, PC Jewellers, Chanel, and Titan, each holding 5%. The luxury market is expected to grow by over 10 % in the next five years.

( Source:https://www.statista.com/outlook/cmo/luxury-goods/india#revenue)

India’s number of Ultra High Networth Individuals (UHNWI) is also growing impressively and, by 2025, is anticipated to account for 6% of the global billionaire population. Among the metropolitan cities in India, Mumbai and Delhi have the maximum number of UHNWI. Still, it is interesting to note that the Tier I and Tier II cities represent 45% of the total luxury market. The number of HNIs is estimated to grow to 950,000 by 2027, a 190% increase from 2018. ( Source: A REVIEW PAPER ON LUXURY APPAREL INDUSTRY IN INDIA; PRESENT SCENARIO ITS SCOPE AND CHALLENGES– By Ms. Sheena Gupta and Dr. Sougoto Banerjee)

Regarding luxury spending, India is ahead of Turkey, Thailand, and Argentina and is progressing faster than Singapore and Australia. As the world’s second-fastest growing economy, India is believed to be one of the most sought-after markets by luxury brands. Currently, India contributes around 1-2 % to the global luxury market, and in the last few years, the sale of luxury goods in India has grown faster compared to other countries. The revenue from the luxury market amounted to US $ 7.5 billion in 2022. The largest market segment is luxury watches and jewelry, with a US $2.2 billion market volume in 2022. The luxury leather and goods account for 0.8 bn US dollars (Source: Statista).

Global players have been targeting the Indian market for quite some time. Louis Vuitton was the first luxury brand to arrive in 2022. Reliance Brands Limited has partnerships with 60 brands, including tiffany, Burberry, Giorgio, Armani, and RBL.

Which are the global brands investing in India?

India, with its rich fashion history of bright colors, exotic saris, elegant embroidery, and stunning jewelry, has inspired designers worldwide. Hence, many international luxury brands are queuing up to woo Indian consumers because they recognize the potential of the market owing to the growing number of billionaires and the rise of the urban elite class.

The Indian luxury consumer base is advancing. With 100% FDI approval in single-brand retailing and 50% in multi-brand retailing, many international luxury brand companies are strategizing their business operations in the Indian market. Brands like Louis Vuitton, BMW, Audi, Mercedes, etc., who already have a presence in the Indian luxury segment, are looking at further expanding their business and increasing their investments.

In the Indian luxury apparel section, the current global players are Hermes, Louis Vuitton, Gucci, Chanel, Jimmy Choo, Burberry, Dior, Bvlgari, Christian Louboutin, Fendi, Giorgio Armani, Versace, DKNY, Diesel, TOD’s, Tom Ford, Roberto Cavalli, Forever 21, Mango, and many more.

Balenciaga and Valentino are opening their first stores in India recently.

Career prospects in the luxury segment

Due to its exponential growth, the luxury segment offers diverse and exciting employment opportunities for anyone well-versed in the luxury industry.  With the demand for luxury products increasing daily, businesses and educational institutions are eager to serve the luxury industry by providing them with a skilled workforce.

Some roles that the luxury industry can offer are

  • Luxury Brand Manager
  • Luxury Sales Advisor
  • Luxury Retail marketing Executives,
  • Visual Merchandisers
  • Customer Relationship Manager,
  • Store Manager
  • Store Director
  • Area Manager
  • Retail Head
  • Brand Head and Fashion Marketer

Why do an MBA in Luxury Management?

Luxury Management is all about conducting market research for target products, overseeing and organizing advertising campaigns, managing brand budgeting and resources, collaborating with luxury designers, and supervising marketing assignments.

India is the emerging hub of luxury, which demands professionals to manage the luxury business to provide the highest level of service to clients who want to own the best based on personal preference while maximizing the social currency. And who knows better about luxury than the French? The world’s luxury capital, Paris, is the birthplace of luxury brands like Christian Dior, Coco Chanel, Louis Vuitton, and Ives Saint Laurent.

MBA ESG, which hails from Paris, offers an MBA in Luxury Management that will equip future managers with superior insights and hands-on exposure in the luxury domain.

Join now to live and breathe luxury!

MBA ESG is committed to bringing excellence in the employable scenario of luxury and fashion sectors by producing management professionals who can lead these sectors and provide massive growth to luxury brands in the country and abroad. Join our MBA in Luxury Brand Management.

References

  1. https://eprajournals.com/jpanel/upload/825pm_10.Ms.%20Sheena%20Gupta%20-3455-1.pdf
  2. https://www.statista.com/outlook/cmo/luxury-goods/india#:~:text=Revenue%20in%20the%20Luxury%20Goods,US%242.21bn%20in%202022.
  3. https://www.vogue.in/fashion/content/a-deep-dive-into-the-growing-indian-luxury-market
  4. https://indianewengland.com/the-future-of-luxury-consumption-in-india/

Author: harshavardhan

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