New face of luxury: Younger generation leads in high-end shopping

High-end shopping, which was previously dominated by wealthy consumers in their 40s and 50s, is now drawing young, urban consumers who prefer splurging on categories such as premium beauty products, apparel, bags, and watches.

Several retailers Mint spoke to said young shoppers are now saving less and spending more. “There’s a demographic shift that we are seeing as a country. As a result, the average age of people buying luxury products like handbags or watches is significantly going down in India. Earlier the average age of such consumers used to be typically mid-40s or early 50s, now that's going down. In fact, we are surprised to see that people in their mid-20s also want to spend on a luxury brand," said Rajeev Singh, partner and consumer industry leader, Deloitte Asia Pacific.

Singh said the new generation of consumers, with starting salaries ranging from ₹8 to ₹15 lakh per annum, is less focused on traditional investments like real estate and more inclined towards buying discretionary products including branded apparel, bags, and watches. 

“The preferences have shifted. People in their early 20s don't even think of buying a house in their lifetime. What is happening is that consumers are saving a little less. If earnings are growing at 10% or 15%, the discretionary spending is growing at a greater pace," he said.

The surge in luxury spending among India's youth is also being driven by a significant generational transfer of wealth. “And this younger set wants to shop and shop now," said Rahul Prasad, managing director at luxury advisory firm Pike Preston Partners (Asia) Private Limited.

India's overall luxury market is estimated to grow to $30 billion by 2030, with 60% of existing consumers spending on luxury every year, according to a study by Deloitte.

Thirty-five-year-old Neha Kalra has been frequently buying luxury brands including bags and sunglasses over the last few years. “The urge to own these luxury brands is driven by a combination of factors --the need to upgrade my wardrobe and the need to buy better products in general. A majority of these purchases were made overseas."

Though consumers may continue to buy luxury goods overseas, they are looking for options closer home as well, retailers said.

“Shoppers appear to have become younger because a lot of them have attended universities abroad and have come back to India to live and work here," said Pushpa Bector, senior executive director, head luxury and shopping malls, DLF Retail. “So depending on the category, we do see younger buyers entering the luxury market and are card spenders too. For instance, when it comes to branded jewellery, a lot of them are buying promise bands and lighter jewellery. We also see that in beauty and accessories the younger buyer is more active," Bector added.

Brands are willing to chase these aspirational shoppers too. Mint had earlier reported that a dozen luxury brands are close to opening their first India store, or looking to scale up their presence in the country. French luxury firms S.T. Dupont and Jacquemus are considering an India entry, while Spain’s Balenciaga is working on its first store in Mumbai. Loro Piana, owned by French luxury firm LVMH, is said to be making a comeback, after having exited the country earlier.

Premium brand Lacoste which operates at an average price point of ₹7,500 has also seen a surprising rise in demand from young shoppers for its casual t-shirts. “Earlier we used to think our customers were over 35 years of age but 33% of our website shoppers are aged between 18 years and 25 years. Female shoppers have also gone up both online and offline," said Rajesh Jain, managing director & chief executive officer, Lacoste-India.

Footwear and small leather goods are also witnessing huge demand from younger consumers. “For our Tom Ford brand, the silhouettes are much younger, so younger men prefer to buy this brand. However, they are not in their 20s, but above 30-years. Shoes are a big draw for younger buyers, so that’s where we see that the customer is far younger. The Cucinelli customer is older—aged 50 or above sometimes," said Ritesh Kumar, promoter, DS Group, which also operates DS Luxury.

Samir Gadhok who set up Burgundy Brand Collective that brings up-market international brands into India said the country is seeing a new wave of luxury shoppers who are emerging across cities and willing to buy branded goods. This is a shift from a decade ago when the luxury goods market was largely restricted to high-net-worth individuals, he said.

“Luxury in India is not restricted to 40-45-year-olds anymore, you have younger consumers earning and they are the ones who are very open to trying bold things. Younger consumers are in fact far more brand and luxury-conscious," said Avani Raheja, co-founder, Burgundy Brand Collective.

With their evolving tastes and substantial spending power, young Indian consumers are increasingly creating new opportunities for luxury brands looking to expand their foothold in the country.