A casual walk through India’s luxury malls was once an easy way to gauge how freely the country's rich were spending. Regardless of the broader economic conditions, boutiques were packed, and affluent shoppers queued up outside exclusive stores.
However, recent numbers suggest that the picture is becoming more uneven. While demand for ultra-luxury remains robust, several global fashion houses are beginning to see signs of moderation in India amid economic uncertainty and job insecurity. Brands like Gucci and Louis Vuitton, which rely more on aspirational consumers, saw their revenues fall as customers cut back amid economic uncertainty and higher prices.
The FY25 filings with the ministry of corporate affairs show that Gucci India’s revenue declined 17% to ₹265.4 crore, Christian Dior's slipped slightly to ₹257 crore from ₹265.7 crore in FY24, and Louis Vuitton's eased to ₹802.47 crore from ₹816.24 crore in FY24.
In contrast, the more upmarket Hermès India, which caters to ultra-rich buyers, continued to expand, with revenue rising to ₹427.9 crore from ₹322.2 crore and net profit increasing to ₹83.7 crore from ₹72.7 crore. Swiss watches also outperformed, with sales rising to about ₹3,500 crore from ₹3,244.6 crore in 2024, according to the Federation of the Swiss Watch Industry FH.
The divergence could be a sign of a broader market dynamic at play, say experts. Luxury cars, too, saw a slowdown, with Mercedes-Benz reporting declining sales after five years of growth. Economic uncertainty, inflation, and job insecurity led aspirational buyers to cut back on discretionary spending. Currency fluctuations and a weakening rupee made imported luxury goods more expensive, while high import tariffs widened price gaps between India and global luxury hubs, encouraging some buyers to shop overseas in cities such as Dubai and London.
Despite this, Delhi remained a stronghold for luxury brands. “Although some of these brands have expanded into other Indian markets, Delhi has remained a strong and stable market. Our malls, DLF Emporio and The Chanakya, in fact recorded growth in sales in all but one quarter of FY25. Any potential dip in overall luxury consumption may be attributed to macro-level disruption in Q1 FY25. In fact, this fiscal, we expect domestic demand for international luxury goods to rise, driven by narrowing home-country pricing gaps. This means luxury goods are now only 10-12% more expensive in India than their home countries, making local purchases increasingly attractive," Pushpa Bector, senior executive director and business head, DLF Retail, told Mint. The mall company houses most of the biggest luxury brands in the country.
There is also a subtle shift in what Indian consumers value. “Luxury houses like Hermès have done well year-on-year because their products are rooted in craftsmanship and permanence, while others driven by seasonal fashion cycles see more volatility. Fashion houses such as Gucci or Dior operate on rapid design cycles and visual signalling," said Raahuul Kapoor, co-founder of Delhi-based consultancy Luxury Ampersand Frolics. "But a growing set of consumers is moving toward what I would call ritual-driven luxury. Objects like cigars, collectible accessories, or maisons, say, a finely-made lighter or a writing instrument, speak to taste rather than simply purchasing power. For India’s emerging class of ultra-high-net-worth collectors and global travellers, these objects align closely with heritage, gifting, and intergenerational legacy.”
Kapoor's firm has brought brands such as French luxury manufacturer S.T. Dupont to India.
Analysts said that there is segment-level divergence in performance. “International luxury brands could be seeing slower growth because demand outside the wedding segment is moderating. International luxury brands have a much lesser share of the robust and dominant wedding market compared to Indian designer wear brands. The non-wedding market may now be more selective and price-sensitive,” said Neelesh Hundekari, Asia Pacific lead of the consumer and retail division at consultancy firm Kearney.
Kapoor of Ampersand added that accessible luxury brands like Gucci, Burberry, Louis Vuitton are reliant on aspirational consumers and are facing slower growth or decline in some cases but in contrast, ultra-luxury labels targeting high-net-worth individuals continue to grow, benefitting from a demand for heritage and craftsmanship.
Queries emailed to these luxury brands seeking comment remained unanswered till press time.