India’s luxury market to reach $8.5 billion in 2022: Euromonitor International

The crackdown on capitalist powers in China has led to brands shifting their attention to India as ideal investment destination. Over the last few years, India has been slowly rising as a global superpower. The country remained relatively unaffected by the pandemic on account of its long-term economic growth and stock market potential. By 2024, India’s stock market is likely to become the fifth largest in the world. As per Goldman Sachs, the value of its stock market will grow to over $5 trillion by that period.

Indian brands speed up digital transformation

However, domestic luxury industry fails to take advantage of India’s rapid transformation, says a Jing Daily report. A few heritage brands like Louis Vuitton, Hermès and Gucci have managed to increase profits and sales. However, others have been unable to achieve similar results. For example, Hermès International-India reported a 55-per cent increase in net profit during the fiscal year 2019. Meanwhile, Christian Dior Trading India reported a net loss of Rs 26.7 crore during the period.

During the pandemic, luxury brands had to speed up their digital transformation to sustain growth. Homegrown e-commerce portals helped these luxury brands reach smaller towns, says Abhay Gupta, Founder and CEO, Luxury Connect. Trends like distance selling, video-assisted sales, and WhatsApp sales helped them brands boost growth during the period.

Growing number of Ultra HNI

The luxury goods industry in India also benefited from the projected rise of new billionaires in the country. Currently, India has 6,884 Ultra High Net Worth Individuals and the number is expected to rise 63 per cent to 11,198 by 2025. As per Knight Frank’s Wealth Report, India’s billionaires are also projected to grow by 43 per cent from 113 in 2020 to 162 by 2025.

A paper published in the Journal of Customer Behavior shows, India’s luxury market offers multiple opportunities for growth. However, the market is unlikely to replace the US and China in immediate future due to smaller size. The market is expected to be worth $8.5 billion in 2022, predicts Euromonitor International.