India is becoming an alternative to China in more ways than one – an investment destination for western allocators to a sourcing avenue for companies in the west. Now the crack down on luxury spending in China, the world’s fastest growing luxury market over the last decade by far, is coinciding with a nascent boom in Indian luxury spending. Whilst mainstream consumption in India appears to be slowing down of late, much like the rest of the world, India is also witnessing the so-called ‘K-shaped’ recovery thanks to growing wealth and income inequality. However, that is only partly the driver of the boom in luxury. It is not just the uber-rich. It is also the young India aspiring to live the good life.
“What defines luxury, though? It depends on who you ask. A Michael Kors wallet bought online for ₹11,000 by a Bhubaneswar-based marketing executive after months of saving is as much a flex at her workplace as a Lady Dior worth over ₹1 lakh purchased by a designer on a whim at a Delhi store.
“Luxury brands are strategically focusing on millennials and Gen Z as the primary target audience due to their inclination towards aspirational spending,” says Pallavi Arora, research associate at Euromonitor. Of the 1.4 billion people in the country, close to 20 million have enough cash to splurge. The number of households with an annual income exceeding ₹37 lakh is likely to triple within the next four years. Arora offers the numbers: 15.5 million in 2028, from 5.1 million households in 2023.
Even those in a lower income bracket aren’t shy to live the high life. A decade ago, wealthy consumers in their 40s and 50s used to splurge on cars, cosmetics, clothes and accessories. Today, as per a Mint report, published in December, Indians in their 20s and 30s with an annual pay of ₹8-15 lakh, are happy to buy a ₹10,000 Coach bracelet. Small wonder then the Indian luxury market is expanding.”
Whilst social media driven status posturing has been a driver, there are other factors – a pandemic driven realisation to live it up for today:
“These young decided to splurge more after coming out of the pandemic, says Pushpa Bector, concurring with conclusions of several global reports. The senior executive director of DLF Retail, a retail arm of real estate firm DLF, which is behind luxury malls Emporio and The Chanakya, says, “Once the malls opened (after covid restrictions were lifted in India), we started seeing new sets of consumers. One set included those who were coming to the mall for the first time, and the second were the ones who used to buy luxury only while travelling abroad. During the pandemic, when international shipping was closed, these buyers became comfortable with buying here.”
Singh belongs to the first set. He started his Delhi mall trips three years ago. Before the pandemic, his designer-wear shopping was restricted to perhaps one bag or a sweatshirt during the once-a-year family trip to Canada. “While we were stuck at home, I realised how pointless it is to keep saving or waiting a whole year for a 10-20% discount,” he says. “What if something happened to me?”
That’s Neha Walia’s mantra as well. In 2023, she bought a ₹1.25 lakh iPhone 15 on monthly instalments and a pair of Louboutins for herself, and a Gucci cardholder for her mother from Mumbai’s Jio World Plaza as a New Year gift.
“I had to limit eating out for six months,” says Walia, 34, who earns ₹1.5-2 lakh a month as a freelance graphic artist. “I don’t want to do five-year planning to buy what I like or keep dreaming about things I desire. I wear Zara, H&M too, but I want a nice statement bag to go along with it.” Five years ago, while working at an advertising firm, she was earning around ₹50,000 a month. “Honestly, if someone had told me then to buy a phone over a lakh or shoes over ₹10,000, I would have laughed. Today, they don’t seem as much. I don’t know why.””
And second, a supply side factor – the creation of retail space worthy of luxury brands:
“One of the highlights of 2023 was the opening of the Jio World Plaza in Mumbai, second in popularity as a luxury retail destination only to Delhi’s 16-year-old Emporio. The 750,000 sq. ft Jio plaza is home to the largest Cartier and Louis Vuitton stores in the country, and is the first India address for Saint Laurent and Balenciaga.”
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