Luxury sales soar as affluent Indians splurge

The local arms of Louis Vuitton, Christian Dior and Hermes together sold ₹1,400 crore worth of clothes, bags and other merchandise in India in the year ended March 2024, according to their filings with the Registrar of Companies, accessed exclusively through the business information platform Tofler. The three companies generated sales equivalent to nearly two-thirds of entire India business of the Swiss watch industry, which sold timepieces worth ₹2,074.8 crore between January and October this year in the country.

“What we've noticed now is that while people generally are spending less often on their luxury goods purchases compared to previous years, they are buying more valuable items," said Raahuul Kapoor, founder of Delhi-based Luxury Ampersand Frolics, which offers consultancy services to luxury brands and brings its own brands to India. “The industry has seen growth because of consumption, but also due to price hikes that luxury businesses have taken overall."

Demand for luxury homes to designer apparel from wealthy Indians spiked in India after the pandemic even as inflation prompted most consumers to cutback on spending. Rising incomes and a younger population is expected to drive luxury spending. According to management consultant Deloitte India, India's luxury goods market is set to grow at a steady pace in the coming years to reach about $30 billion by 2030 from an estimated $17 billion in 2024. Sales of top fashion brands reflect the potential.

In FY24, Louis Vuitton India Retail, part of the billionaire Bernard Arnault-owned parent, generated an income of operations of ₹811.6 crore, a 13% increase over the previous fiscal, according to its November filings with the ministry of corporate affairs. Profit rose from ₹140 crore to ₹149 crore.

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Christian Dior Trading India’s revenue from operations surged 45% to ₹265.71 crore from ₹183.22 crore the year before. Its profit too jumped 45% from ₹32.1 crore.

The maker of famous Birkin and Kelly bags, Hermes India Retail and Distributors sold ₹316 crore worth of luxury bags and accessories in FY24, growing 27% over FY23's ₹249 crore. Its net profit jumped 33% to ₹72.73 crore versus ₹54.3 crore the year prior.

The companies didn’t respond to Mint’s emailed queries by press time.

"FY24 was a great year for us because it was all about creating new experiences and offerings," said Kapoor of Luxury Ampersand Frolics. “Our cigar business grew over our FY23 and seeing the growth potential, we also signed to bring to India, accessories brand S.T. Dupont."

To be sure, part of high-end luxury brands’ growth can also be attributed to currency fluctuations, particularly the Swiss Franc's stability against other global currencies which also impacted several luxury businesses. Some retailers Mint spoke with said goods are now 10-15% costlier than last year.

Moreover, not all luxury brands have reported similar growth. In August, Mint reported that Reliance Brands Ltd (RBL), a Reliance Industries subsidiary that manages over 50 global luxury and fashion brands, saw its losses widen to ₹288.4 crore in FY24 from ₹185.16 crore the previous year even its revenue grew 13% on-year to ₹2,303 crore. The rise in sales was not enough to boost profitability for brands such as Diesel Fashion India and Paul & Shark, among others, in its portfolio.

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And FY25 has been a more challenging year as well in the first two quarters. Luxury spending cooled because of high summer temperatures, the general election and a decline in consumer sentiment. India's economy also grew at its slowest pace in seven quarters in July-September at 5.36%.

Besides, increased international travel means many wealthy Indians have resumed shopping abroad again.

Still, early October trends indicate a rebound in the second half of the fiscal year. Industry experts are hopeful that the festive season, including the ongoing wedding season, will help make up for the dip in sales experienced earlier in the year.

Italian luxury bespoke shoemaker Santoni, for instance, expects a 10% year-on-year growth in the October-December quarter. Santoni’s India partner Luxerati Retail Pvt. Ltd's co-founder Sanjay Kataria said that a large part of this growth is coming from like-for-like sales, while some of it is from inflation due to the rupee depreciating.

“The earlier part of the year was a little slow due to the elections and poorer weather," he told Mint. “But October and November have seen some strong growth figures as compared to the same period last year."

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