Now, luxury is not just the tenure of big cities. Its magical charm grows beyond the metros to appeal the smaller towns too...

Indian economy is one among the fastest growing countries in the world. Indian luxury market is predicted to reach USD 5.8 billion in the next 5 years. The country is the home for more than 83,000 millionaires, and is growing manifold with a 19.3% increase every year. Increasing amount of disposable income, dual income, and global exposure are a few growth drivers. Aspirations of the middle income population towards luxurious life style are increasing, which is the major influencing factor for the growth of the market.

India is the world's third largest consumer class having 122 million individuals with purchasing power. Personal consumption of Indian consumers is estimated to be 67% of GDP, which is higher next to US at 70%. Growth for luxury market in India is predicted by industry analysts to be drastic between 2015 and 2020 as more people are likely to enter the consumption curve. Market for luxury items have grown well by 29% over the projected 23%.

Luxury Brands in the Indian Market:

Luxury brands in India saw a continuous double digit growth during the first half of 2011 as against 2010. Luxury apparel retailers are selling out their 2011 inventory, and are placing orders for 2012 seasons. Luxury brands such as Louis Vuitton, Tag Heuer, Mont Blanc, Gucci, Harley Davidson, hold big potential in the Indian market. Burberry, the British fashion icon for coats, and bags has established their market in India. Currently, the brand is chalking plans to scale up it's with company owned stores, and new categories of products at high-end malls.

Growing beyond the metros:

Nine million Indian households will be the target for luxury and near luxury retailers. The growth of luxury market has now extended beyond metros to reach smaller towns as well. A Kearney report states that one out of every four luxury stores in India has come up outside metro cities of Mumbai, Delhi, Hyderabad, Pune, and Bangalore. Currently, the industry is expanding its presence in more than 30 small towns in apparels, fashion accessories, watches, and cosmetics.

II and III tier cities are offering rosy hopes for global luxury brands, and the surge is also influenced by organic growth. Indian shoppers are getting more sophisticated and selective with their product choice, price range, in-store experience, and after sales services. International luxury brands are expected to account for more than 50% of the total luxury spending.

Fashion Apparels:

India has gained international acclaim for its apparel designers. Apparels have contributed to a strong growth. It is one among the most brand conscious countries in the globe with increasing number of shoppers seeking to buy designer, and branded apparels. The CII-AT Kearney Report states that skepticism is being replaced by an increasing sense of buoyancy and promise in the market. Indian consumers accept, and adopt global trends quickly. Medias make it possible for global companies to enter into the Indian market with ease.


  • However, the key challenge for the global brands is to target and reach the right kind of customer. Getting the right basics, and experimenting cautiously by exploring new markets with care will open new and profitable options for the global luxury players.

  • Indian consumers have the capacity; but, do not have the inclination to spend on luxury items. They also have reservations against buying less known brands, and shopping in India.

  • Global brands will have to face constraints regarding real estate options, back end infrastructure such as logistics, regulatory concerns, and FDI restrictions.

Despite all the challenges, several players have managed to seize the market opportunities; very early. Asian market is firmly believed by global brands to be a fascinating market of the future. By 2015, experts anticipate a quarter of the luxury market will be between India and China. India is poised to become the fifth biggest consumer market by 2025, providing good scope for domestic and global luxury brands.