Accordin to a recent report released by The Associated Chambers of Commerce and Industry of India ASSOCHM, India’s luxury market could expand three fold in next three years and the number of millionaires is expected to triple in another five years. Increase in spending is anticipated across the country and beyond the walls of the metros, with increasing brand awareness amongst the youth and purchasing power of the upper class in Tier II & III cities. Overall, India’s luxury market is projected to reach USD 14.7 billion in 2015.
The number of Ultra High Net worth Households, with a minimum net worth of INR 25 crore is expected to triple to 2.86 lakhs in next five years with a five-fold increase in their net worth to INR 235 trillion. And the HNIs will be double in number by 2015 to over 4 lakhs with a collective wealth of USD 2645 billion. These projections along with the increasing price parity in the luxury products with other international destinations like Singapore or Hong Kong, and customized products offerings would indicate that the luxury market in India would evolve quickly, highlights the paper.
While various estimates exists on the size and growth potential of the Indian luxury market; most estimates align on anticipated growth rates of 20% given the tremendous potential waiting to be harnessed such products: Apparel and Accessories, Pens, Home Décor, Watches, Wines & Spirits & Jewelry, services: Spas, Concierge service, Travel & Tourism, Fine Dining & Hotels and assets: Yachts, Fine Art, Automobiles & Real Estate.
Luxury products are projected to grow to US $5.38 Bn in 2015 versus a current US $2.85 Bn. Jewelry is believed to be the largest contributor (31%) for this sub-sector driven the investment mentality of Indians in jewelry which leads to low consumer price elasticity.
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