This lust for expensive goods is a global phenomenon; has affected India too. Our country’s ultra-high net worth individuals (UHNIs) are choosing to spend their increasing disposable income on a wide variety of luxury goods and experiences. Research conducted by the Hurun Research Institute ranks self-made billionaires under the age of forty. India’s under 40 self-made young entrepreneurs had reportedly amassed wealth of over Rs. 1,000 crore by 2022. A large portion of this wealth is unabashedly being spent on the pleasures of life.
Suryajit Singh, scion of the erstwhile royal family of Kapurthala and Managing Partner at JMC, a global luxury brand management consultancy that provides commercial growth strategies to brands across industries, names two reasons for the increased spending on luxury goods. “It is both economic and psychological,” he says, explaining, “There was a pent-up demand from the Covid years, and a greater number of younger people are earning wealth through trading in cryptocurrency. Further, trends show that Gen-Z shop more often and at a younger age than millennials, often purchasing their first luxury item at the mere age of 15.”
Other reasons include increased prices of luxury goods by brands looking to increase their margins, and a larger pool of buyers as middle-class consumers also indulge in luxury spending owing to social media exposure. “Increased prices don’t necessarily affect the wealthy consumers. They are happy to pay any price for an item they want,” he shares. Perhaps this is the reason why his family’s luxury consultancy business is booming too. He says, “We are currently the busiest we have been since our foundation 40 years ago.” While more and more luxury brands across a variety of sectors are entering the competitive Indian market, Indian luxury brands also look to expand their presence globally.
Euromonitor International estimates that India’s luxury goods market is projected to be over Rs 50,000 crore by 2024 from around Rs. 46,000 crore in 2022. The luxury fashion market in India will cross Rs. 5.7-5.8 trillion by 2024, according to a 2021 estimate by Boston Consulting Group. According to UK-based estate agency Knight Frank’s 2022 edition of its ‘Wealth Report’, India ranked third in the highest number of billionaires globally in 2021. This number had increased by 11 percent from the previous year at an astounding rate of growth that was second only to the United States and China.
The growing spending appetite is also evident through the entry of coveted high-end brands like Valentino, Bulgari, LVMH, Chanel.... in the Indian market. To cement their position, these brands have been catering to the needs and desires of Indian consumers.
Hence, Bulgari launched a mangalsutra and Louis Vuitton offered a capsule collection of well-priced footwear to target the Indian wedding season. Even Swiss luxury watchmaker Franck Muller launched a limited edition timepiece with the Indian flag embedded in its body to mark India’s independence.
Varuna D Jani, Jewellery Designer and Adornologist who belongs to the famed Popley Eternal jewellers in Mumbai, talks about the implication of this increased spending on luxury, “I believe that modern consumers are shifting their focus from viewing jewellery as a mere commodity to seeking exclusivity and unique designs. People no longer wish to invest in items that are easily accessible.” Leaning on the example of the jewellery industry in particular, Jani points to the emergence of lab-made diamonds diminishing the ability for discerning customers to stand out from others. As a result, she says that well-crafted jewellery which offers exclusivity, and the feel of bespoke luxury has gained importance.
“People desire jewellery that is not confined to a locker but can be worn on multiple occasions, whether it transitions from contemporary to Indian styles or seamlessly moves from day to night. Practicality plays a crucial role in their approach, as they seek to indulge in purchases that bring them joy and can be cherished for a long time,”she adds.
Singh believes it is a sign that Indians no longer shy away from celebrating their hard-earned wealth. “They are also open to spend more money shopping in India (provided they have an elevated store experience and can access a good assortment of products) which provides more employment opportunities, improved infrastructure, and rental income for local real estate owners, while also opening up the chance for unique collaborations between international houses and India’s leading luxury brands,” he says.
(The author writes on lifestyle for various publications)
