New Delhi: Millennials are increasingly becoming an important cohort for companies in India. When it comes to spending on luxury products, and experiences, millenials in India are the fastest-growing user base for the local arm of New-York based credit card issuer American Express. Millennials account for 37% of the company's userbase in India and account for a third of all luxury spending done on the company’s base of card users here, according to data shared by the company.
The global card issuer whose products and services are typically used by affluent consumers the world over mapped consumer spends on high-end experiences, travel, clothes, stay and jewellery. Between 2014-2018 luxury spending by millennials in India grew 27% (CAGR), registering the highest growth rate among other cohorts of Amex users. American Express defines millennials aged 19-39.
“Today, about 37% of American Express base in India is millennials, interestingly 33% of luxury spending is done by millennials and that is increasing at a rapid pace. The highest growth rate for luxury spending is coming in the millennial segment," said Manoj Adlakha, chief executive officer, American Express Banking Corp, India. He said India’s large base of millennials and expansion of high net worth individuals in the country are likely to bolster spending by this consumer base going forward.
And what are they spending on? Dining and jewellery, according to findings of a report released by the local arm of American Express.
Unlike their predecessors, millennials in India are increasingly indulging in lifestyle expenses.
“The key difference is they are more about living in the moment, they want to share assets, they are more into the shared economy. It is all about experiences and travelling overseas, going to the next concert and living for the moment," he said.
Millennials in India spend the most on luxury dining among American Express' user base in the country; millennials contribute to 42% of the luxury spends on dining in India; this is followed by jewellery (38%) and high-end apparel (35%). "When we look at luxury and high end dining 42% of the total luxury dining by American Express card members is actually coming from millennials," Adlakha said.
Among Indian millennials, jewellery is the fastest-growing category when it comes to luxury spends followed by lodging and dining experiences, the report said. Spends on expensive jewellery registered a 43% growth (CAGR) among Amex’s base of millennial users in India, followed by spends on lodging and dining.
American Express also studied luxury travel spends of international and domestic travellers in India between 2014 and 2018.
International travellers account for 44% of all luxury spends in India on American Express cards, while domestic travellers the remaining 56%. However, when it comes to spends per transaction, foreign travellers spend twice as much as local travellers here (using Amex cards).
"International travellers account for 2x spend per transaction on overall luxury categories in India on their Amex cards," the report said. In fact, 85% of the international luxury spend happens in lodging indicating that tourism is a big part of the Indian luxury market, the report said. Interestingly, for international luxury travellers, smaller cities in India are increasingly becoming popular luxury tourist destinations. Among Indians travellers, Europe continues to be a popular tourist destination with summers as preferred months.