The Indian luxury market grew at a robust 20% last year, hitting $5.75 billion, according to a report by CII and AT Kearney.
”Jewellery is an evergreen segment in India” said Neleesh Hundekari, Principal at AT Kearney. He added that electronics, including home entertainment systems, fine dining, and luxury cars also posted stronger growth, while real estate and yachts were flat. Car dealerships now have 50 percent of their dealerships outside the major metros.
Price points for luxury brands are more comparable to those of Singapore, for example, making it more practical for consumers to buy in India, rather than when they travel abroad.
The report noted that while consumers in India are adapting international trends, there is still a huge untapped market in the country - small medium sized business owners. These consumers have the capacity to buy luxury products, but tend to stick to few brands, making education essential for luxury retailers.
Luxury brands still remain concerned about the obstacles that hinder exponential growth, including limited FDI investment, high infrastructure and custom duty costs. Although these factors make it harder for luxury brands to do business in the country, they also realize that the country has enormous future potential. By 2015, it is expected that the size of the luxury market will rise to $14.72 billion.