Jumping On the Luxury Brand Wagon

Once the prerogative of the well-heeled crowd, luxury goods are fast gaining popularity in India as an increasing number of affluent as well as aspirational consumers make a beeline for international luxury brands. Be it bags, jewellery, watches, shoes or cars, this surging appetite for luxury goods and experiences has piqued the interest of leading international brands who are flocking to Indian shores in unprecedented numbers to tap into the country’s vast pool of young and wealthy population. According to Deloitte’s 2023 Global Powers of Luxury Goods report, India’s substantial contributions to the international luxury market in FY2022 surged to an astounding $347 billion.

Driven by technological advances and increasing emphasis on sustainability, the luxury goods market in India has witnessed significant transformation. The strategic integration of technology, especially GenAI, has enabled real-time support and personalized customer experiences. The technology has transformed customer experiences and redefined the concept of personalized luxury. According to a 2023 Bain & Co report, India’s luxury market is expected to triple over the coming six years and reach $90 billion owing to an expanding upper middle class, an increasing number of ultra-high-net-worth individuals, higher e-commerce penetration, and surging demand for luxury products among Gen Y and Alpha consumers. Earlier, consumers in the 40s and 50s dominated the luxury segment. However, today an increasing number of young, urban Indians are spending on high-end goods and experiences. Undoubtedly, a burgeoning middle class and rising disposable incomes are major factors behind luxury’s coming-of-age moment in India.

The world’s leading designer brands are arriving in India to tap into the country’s increasing retail space, better online experiences, and an increasing population of young professionals who want to live the high life. In 2023, several leading international fashion brands such as Brioni and Balenciaga forayed into the Indian market while existing luxury houses such as Louis Vuitton, Gucci and Valentino expanded their presence in the country. In addition to the rich and ultra-rich consumers, brands seek to reach digitally active consumers whose luxury splurges are no longer limited to shopping sojourns during trips abroad. Brands see India as the next big luxury destination and this is evident in the appointment of several Indian celebrities as the global brand ambassadors of top luxury houses – Priyanka Chopra is the face of Bvlgari, Deepika Padukone for Louis Vuitton, Alia Bhatt for Gucci, Katrina Kaif for Rado, and Ananya Pandey for Jimmy Choo. Digital entertainment, social media, access to luxury and rising incomes are driving a major shift in consumer buying preferences.

For more than a decade, India boasted a single luxury retail destination – DLF Emporio. Opening a luxury store in the country has historically been challenging owing to the lack of premium retail spaces, stringent retail regulations, and steep import duties. The scarcity of quality retail spaces will soon be history with the launch of the 750,000-sq ft Jio World Plaza in 2023, the opening of two Galeries Lafayette stores later this year, and as many as 20 new stores of luxury multi-brand chain The Collective across the country.

With the launch of Jio World Plaza in Mumbai and Bengaluru’s Phoenix Mall of Asia, the issue of limited luxury retail infrastructure has been tackled to a large extent. In addition, the advent of luxury e-commerce owing to platforms such as TataCLiQ and Ajio Luxe has also helped drive sales, particularly in Tier II and III cities where consumers have traditionally lacked access to premium products.

In the pre-pandemic world, Europe, the United States, China, and Middle East dominated the global luxury market. However, the COVID-19 pandemic dealt a severe blow to China and the markets in the US and Europe also started shrinking. This prompted luxury brands to seek new markets and as the world’s most populous country, India offered tremendous potential. In 2023, luxury retail sales in India rose by 3 per cent despite supply chain challenges, inflation, and serious headwinds due to the Russia-Ukraine war. According to a UBS and Credit Suisse report, the number of millionaires in India are estimated to grow by 69 per cent during 2022-2027. Therefore, there is tremendous potential for growth for businesses within the luxury segment. A Euromonitor International report states that India’s luxury market is likely to be among the fastest-growing across the world. The rising affluence of consumers in the country coupled with greater awareness and exposure to international trends has made the market conducive for growth and expansion.

Since the Indian market is culturally unique, luxury brands have also adopted the trend of “Indianisation” by launching exclusive collections to woo consumers in the country. Recently, Italian luxury brand Bvlgari introduced a gold bracelet for men inspired by the traditional Kada. The brand’s Mangalsutra offering was an instant hit and continues to be extremely popular. To celebrate India’s spirit of festivities, French luxury house Louis Vuitton launched the ‘Rani Pink’ festive shoe collection in 2022. While British fashion house Jimmy Choo introduced a Diwali capsule collection, Coach launched an exclusive collection of bags for Diwali.

Luxury brands have always been a hit with royalty and the jet set in India but in recent years, even middle-class consumers have begun to flaunt fashionable labels and aspire for quality products and services. A hefty price tag no longer deters aspirational Indians who now have the option of paying in straightforward monthly instalments. Today’s fashion-conscious consumers are not afraid to splurge on designer bags and shoes. As long as the products are premium and fashionable, no price is too high.