A glance at today’s newspaper took me again by surprise; it’s been a regular phenomenon now that whenever I open a National Daily one more luxury brand seems to have entered or is planning to enter the Indian market. Actually it’s becoming more or less a routine that new varieties of luxury brands are increasingly available in India than the previous years.
In India if anyone owned a telephone or a car in the 1970s and 1980s, then he was seen as well-to-do person and if he owned a gas connection with a refrigerator, he was considered as very affluent. Indians in those days used ordinary commodities and didn‘t know much about luxury brands. That’s why that age was considered as the age of incorruptibility or innocence.
Those who came back from other countries with branded and designer-labelled stuffs were considered as people who have achieved a lot in their life. The common people had access to only ordinary commodities. Many varieties of superior quality or luxurious commodities were unknown to large population. Moreover, the brands were limited like Gucci and Christian Dior.
After the structural reforms from 1970s with the implementation of Liberalisation, Privatisation and Globalisation, luxury brands entered India and Indian companies went international. Luxury brands such as Da Milano, Monte Carlo, Franco Leone and Munich Polo are now a part of Indian wardrobes. The pattern of production changed in India also.
The apex trade association of India, Assocham, has recently stated that the Indian luxury market is expected to cross $18.3 billion mark with a growth rate of about 25 percent. The growth is driven by increased brand awareness and purchasing power of the upper class in the tier II and III cities along with substantial changes in the tier I cities also.
There has been substantial increase in the percentage of young people with more income and higher spending habits. Preferences of dining at five star hotels and buying high-end luxury products such as electronics, jewellery and personal care products have been adopted by a larger percentage of people and the trend is expected to grow over the years.
With the exponential growth of luxury market, even private equity investments in this segment have shown significant increase. Luxury jewellery, electronics, cars and fine dining have grown beyond expectations while apparel, accessories, wines and spirits have continued their strong growth in 2016, according to the Assocham assessment.
The economic slowdown has not affected the spending patterns of high income group. Maintaining lifestyle is an extremely important facet of their life. Their size continues to grow and they spend over 40% of their income on some of the world’s largest luxury brands whereas the middle income group consumers spend 8-10% of income on luxury products, reveals Assocham.
Increasing internet penetration across smaller cities and towns along with high income shall lead to major increase in transactions on the internet, resulting in ample increase in luxury consumption. The tastes and preferences of the consumers are turning highly towards luxury brands. It appears that they will be definitely more prominent in the days to come.
Brands that I prefer and my near ones use are like Gucci, Bossini, Allen Solly, Peter England and Da Milano. Many such brands make me and my near and dear ones look more sophisticated and feel comfortable. Luxury brands are always preferred by me over others as they give a sense of sophistication, class and over everything a sense of distinctiveness from others.
This is just the introduction stage for these brands and they have a very long way to go in our country. This will be facilitated by the large percentage of young people in the population, expanding corporate sector, increasing income, higher exposure to foreigners, awareness through various forms of media and rising aspirations to have better standard of living.