India’s journey towards becoming a global luxury playground has been a long time coming. And if the latest moves from luxury’s largest players are anything to go by, it means that those who have been laying the groundwork over the past few years will really stand to benefit.
Take Valentino and Balenciaga expanding their physical presence with opulent flagship stores, Christian Dior staging its pre-fall show in Mumbai’s historic site ‘The Gateway to India,’ or Lamborghini and BMW curating special off-road track racing and Himalayan trail drives for their potential and existing clients.
All of these actions are testament to the growth of India’s luxury market, demonstrating a commitment from some of the world’s largest brands to India’s thriving luxury landscape, which is expected to expand by 3.5 times its current size by 2030.
In addition, India’s total consumption expenditure is expected to grow by a factor of four, from $1.5 trillion in 2018 to $5.7-6 trillion by 2030, and it is this impending explosion of opportunity that is fascinating, not just for the size of the prize at which it hints, but for the changing profile of the consumer.
For it is the upper-middle-income as well as the high-income households, which represent about 50 percent of the overall population pyramid, that are driving the growth of premium to luxury consumption.
And these customers who are actively participating in the luxury narrative are seeking unique experiences and forging deeper connections with luxury brands as the market matures even further.
Indian consumers are engaging with luxury brands in multifaceted ways. Beyond making luxury purchases, they are also seeking personalised and exclusive experiences. Brands are responding by curating events and activations that immerse customers in the world of luxury.
From private fashion shows to exclusive wine-tasting events, brands are forging deeper connections with their clientele. Moreover, digital platforms are being leveraged to engage with a wider audience, offering virtual tours of luxury boutiques and interactive brand experiences.
Christian Dior’s pre-fall 2023 show on March 30, is a good example of this. It was the first time a major European luxury brand held an official calendar show in India, signifying to the Indian market and to the world, how important it considers its Indian customers; not only through its presence but also through the collection which was a collaboration between its creative director Maria Grazia Chiuri, the creative director of Dior, and Mumbai-based atelier Chanakya School Of Craft.
Likewise with Lamborghini, BMW and Audi and their curated experiences. The focus of these is to offer a unique drive where customers can explore the features and comforts of their vehicles which they may not be able to appreciate and use during a normal city drive, and take into consideration how their clientele can engage on a deeper level with their brand.
Another way luxury brands are tapping into the Indian market is by adopting innovative communication strategies to resonate with Indian consumers.
Social media platforms are harnessed to showcase exclusive collections, engage in dialogue, and share brand stories. Collaborations with Indian influencers and celebrities further amplify brand visibility. Brands are also emphasising sustainability, responsible practices, and their commitment to local communities, aligning with Indian consumers' evolving values.
Many luxury brands have appointed Indian movie stars as their global brand ambassadors. From Louis Vuitton and Cartier appointing Deepika Padukone to Gucci using Alia Bhatt to drive in Gen Z customers worldwide, this kind of a communication strategy helps deep brand resonance with not only Indians within India, but also the huge Indian diaspora worldwide.
One of the most tangible ways brands are demonstrating their commitment is through stores. As noted earlier, Valentino and Balenciaga have partnered with Reliance Brands Limited to open their stores, while Aditya Birla Retail revealed the arrival of Galeries Lafayette, the French luxury department store, in Mumbai and Delhi.
Apple BKC, the brand’s first maiden store, opened its doors at Mumbai’s bustling Bandra Kurla Complex financial, arts, and entertainment district. Apple BKC will serve as a dynamic space where customers can come together, explore Apple products and services, enjoy exceptional service, and learn how to get more out of their devices.
Likewise, Swiss-based luxury multi-brand watch retailer TimeVallée has entered into a partnership with Tata CLiQ Luxury and launched its exclusive digital boutique in India. Under this partnership, Tata CLiQ Luxury will offer collections of Swiss luxury watch brands including Cartier, IWC Schaffhausen, Jaeger-LeCoultre, Panerai, Piaget, and Roger Dubuis.
Well, the answer is everything. The post-pandemic market saw a frenzied revenge shopping phenomenon in all sectors of luxury. In 2022, Indians spent around $8 billion on luxury products, says Claudia D’Arpizio of Bain & Co.
The YOLO concept came into its true element when most Indians began and continue to splurge on good things in life including fashion, accessories, watches, high-end cars, fine wines, and luxury homes. Beauty, skincare, wellness and health have come to the forefront.
Micro vacations drive demand for weekend getaways and boutique properties to isolate oneself from the boredom of daily life. Destination weddings with no expense barred kind of toppings top the list. Fine gourmet dining, expensive yet classic gifts, theme-based décor, and designer clothing along with erotic entertainment have seen a rise in demand.
On the watch front, Swiss watch manufacturers registered a new record for exports to the Indian market in 2022. According to the Federation of the Swiss Watch Industry, the growth in demand for Swiss watches remained robust even during the first two months of 2023. India ranked 23rd in terms of Swiss watch exports to countries and India imported Rs 1,722 crore worth of Swiss watches in 2022. This is 19.6 percent than in 2021.
While in automobiles, super luxury cars like Lamborghini are seeing an upswing of sales from smaller towns and are sold out for the entire 2023 with an expected delivery of 100 units. The brand saw record sales in 2022 at 90 units with a growth of 30 percent on previous years. Likewise, Porsche witnessed a 64 percent growth with a sale of 779 units in 2022.
The market is set to register a robust growth in 2023 with the total industry volumes likely to grow by 13-18 percent to about 43,000 to 45,000 units. Mercedes-Benz India, the country’s largest luxury car maker posted its best-ever January to March Q1 sales numbers at 4,697 cars, posting a 17 percent growth.
Demand for luxury homes and real estate has also seen an upswing. With work from home and the gig economy becoming a norm, people are seeking comfortable homes to not only live in and work from, but also to party in.
High-rise apartment blocks with all amenities like a swimming pool, gymnasium, grocery shopping, banking, and salon facilities along with a medical centre built-in are the flavour of the month. A self-contained living cum entertainment zone with a banquet to host parties, a business centre cum club for entertaining and meetings, a mini-golf course if not an 18-hole, are some homes being sought.
And finally, in 2022, India overtook France to become the largest market for Scotch whisky by volumes. But it’s still just 2 percent of the country’s overall dark spirits market, and a potential 150 percent reduction of tariff burden under the UK-India free trade agreement could boost market access.
The market is projected to grow at an annualised 7 percent rate by 2026. Over the past two years, the scotch whiskey market has nearly doubled. Spurred by growth and higher consumption by millennial drinkers as well as a growing middle class, the pricier scotch market grew by 33 percent year on year to 7.5m cases of nine litres in 2022. In 2020, India consumed 3.9m of premium scotch whiskey.
Likewise, the wine market in India is estimated to increase by USD 688.16 million between 2022 and 2027. The market is driven by factors such as the increasing use of online sales channels, the increasing application and demand for wine in the food industry, and the growing awareness regarding the health benefits of wine. The rising population of millennials worldwide is a key trend influencing the growth of the market.
While revenge shopping may have contributed to the generic growth, the overall acceptance and demand of the luxury and super-premium segment must be attributed to a shift in consumer perception and evolving drinking habits.
The younger generation is more cautious of the alcohol they consume because they value its quality. This generation's alcohol preferences reflect an evolved demand for flavour, a rich history, sustainability, and other such factors. The Indian flavour profile for alcohol has evolved and now includes the subtle nuances found in luxury spirits. As we raise our glasses to the major shifts in consumer behaviour, one thing is certain: with health consciousness on the rise, more shifts are on the way.
In essence, India's transformation into a global luxury playground is not just theoretical; it's unfolding on the ground. Investments in stores, marketing initiatives, and activations illustrate the industry's belief in India's potential.
As India continues its journey toward becoming a global economic powerhouse, luxury brands are well-positioned to thrive in this remarkable transformation, capturing the hearts and wallets of Indian consumers. The allure of India's evolving luxury landscape beckons, and those brands that seize the opportunity stand to reap the rewards of this remarkable transformation.