02 August 2024, Mumbai
The Indian luxury market is on a runway to success. Expected to touch $8.5 billion in 2022, it's witnessing a growth boost fueled by a rising number of high-net-worth individuals (HNWIs) and a new wave of "revenge spending" post-pandemic. This increase in disposable income coupled with growing brand awareness is enticing luxury fashion houses to set up shop in key Indian cities. But which cities hold the most potential?
The Indian luxury market has witnessed a meteoric rise in recent years. A Bain & Company report states, the market is expected to grow at a CAGR of 18-20 per cent between 2023 and 2025, reaching a valuation of $30-35 billion. This growth is primarily driven by a burgeoning affluent class, increasing disposable incomes, and a growing preference for luxury goods among the younger generation. But which cities hold the most potential?
Top five cities a comparative analysis
Mumbai and Delhi, India's perennial powerhouses, are natural contenders. Home to a significant chunk of HNWIs according to Knight Frank, these cities boast established luxury retail districts and a well-heeled clientele. International brands like Valentino have chosen them for their first Indian stores, recognizing their established luxury consumer base.
In fact, Mumbai India's financial powerhouse, has long been synonymous with luxury. With a substantial HNWIs population and a deep-rooted affinity for high-end fashion, the city boasts a mature luxury market. Mumbai is a trendsetter, say experts, the cosmopolitan culture and exposure to global fashion has made it a fertile ground for luxury brands.
Delhi, India's political and cultural capital, is experiencing a luxury boom. The city's affluent residents, particularly those in diplomatic circles and business, have a penchant for exclusive brands. Delhi's discerning clientele appreciates craftsmanship and heritage. The city's growing affluence is driving demand for luxury experiences.
Bangalore, India's IT capital, is rapidly emerging as a luxury destination. The city's tech elite, with their high disposable incomes, are fueling demand for premium fashion. The metro’s young and dynamic population is increasingly embracing luxury. The city's cosmopolitan vibe is attracting luxury brands to set up shop.
Similarly, Hyderabad, with its rich cultural heritage and growing economy, is witnessing a surge in luxury consumption. The city's affluent class, comprising IT professionals, entrepreneurs, and traditional business families, is driving demand for high-end fashion. In fact, Hyderabad's luxury market is on the cusp of a major transformation the city's growing wealth and aspirational consumers present a huge opportunity.
Chennai, with its traditional values and growing economy, offers a unique luxury market. While the city's luxury landscape is still developing, there is a growing demand for high-end fashion among the affluent. The luxury market is evolving rapidly in the metro its rich cultural heritage and growing economy provide a solid foundation for luxury growth.
A market in nuance
While the HNWI base is a key indicator, it's not the sole factor. Understanding the distinct consumer preferences of each city is crucial. For instance, Bengaluru might favor a more tech-savvy and contemporary luxury experience, while Delhi might lean towards established brands and heritage. The future of luxury in India lies in offering a personalized omnichannel experience, say industry experts. Brands that can seamlessly integrate online and physical retail experiences, while recognizing the regional nuances, will be the ones to truly seize the potential of this booming market.
