Indian luxury market to cross US$ 18.3 billion in 2016; to break all records: ASSOCHAM

Indian luxury market to cross US$ 18.3 billion in 2016; to break all records: ASSOCHAM

Rising brand awareness and increasing purchasing power of Indian consumers to help widen Indian luxury market exponentially in 2016. Luxury market is expected to cross US$18.3 billion in 2016 from the current level of USD14.7 billion growing with a compound annual growth rate (CAGR) of about 25%, reveals a latest study by ASSOCHAM. The sectors such as five star hotels and fine-dining, electronic gadgets, luxury personal care and jewellery performed well in the year of 2015 and are expected to grow by 30-35 per cent over the next three years. The survey segregated the luxury sector into products: apparel and accessories, pens, home décor, jewellery, watches, wines & spirits; Services: spas, concierge service, travel & tourism, fine dining and hotels; Assets: yachts, fine art and automobiles.

The survey was conducted in Delhi, Mumbai, Kolkata, Chennai, Ahmedabad, Hyderabad, Pune, Chandigarh, Dehradun, etc. where Delhi ranks first in spending most on luxury brands followed by Mumbai, Ahmedabad, Pune and Bengaluru. The size of the High Income group (HIG) consumers continue to grow and spend over 40% of their income on luxury brands whereas the middle income group (MIG) consumers spend 8-10% of income on luxury products, the survey reveals. Globally too, consumer spending is on a rise, expected to reach US$ 40 trillion by 2020 with an unprecedented growth of USD 12 trillion in a decade, according to the report.

“Luxury jewellery, electronics, SUV cars and fine dining have grown beyond expectations, while apparel, accessories, wines and spirits have continued their strong growth in 2016. Even the slowdown in the economy has not affected the spending patterns of HIG, with many of them stating that maintaining their lifestyle is an extremely important facet of their social life.” the report said. Among the consumers, women tend to make purchasing decisions around cosmetics, perfumes, spa treatments, clothes, footwear, bags and jewellery while, men mostly decide on purchases related to alcohol, watches and automobiles, said the survey.