According to a recent international research conducted by the German strategic consultancy firm Simon-Kucher, India has been one of the fastest emerging luxury markets. In the last two years, two-thirds of local consumers have spent more than 20 thousand euros on luxury goods.
Furthermore, 84% plan to further increase their budget in the next 12 months. These shoppers stand out for their preference for multi-brand platforms, lower brand loyalty and a strong focus on the symbolic and social value of the purchase (25% indicate social status as a driving factor).
Overall, the analysis shows a profoundly evolving landscape between new expanding geographies, transformations in purchasing behaviors and growing pressure on supply chains and brands. The luxury market in India is expected to grow at a CAGR of 5.9% between 2024 and 2029, second only to Singapore (+6.1%) in terms of growth potential. Australia follows (+4.6% CAGR), UAE (+4.5%), USA (+3.5%) and China (+3.3%).
In terms of product categories, the ones expected to see the most growth include leather products (+5.5% CAGR 2024-2029), jewelry (+4.1%) and ready-to-wear (+2.1%). As for consumers, it seems that Gen Z and Millennials are rewriting the rules, also through a growing demand for transparency and sustainability, as well as the acceleration of digitalization. Digital channels are accelerating especially in India, where less than 50% of consumers still buy in physical stores while in Europe, the USA and China around 70% still prefer the physical experience.
Simon-Kucher identifies seven profiles in the world, based on the most recent purchasing logics. There are the Icons Collectors (the majority of whom are found in the USA, equal to 41% of consumers) who buy occasionally, prefer a few iconic pieces of famous brands and hand made and prefer to buy timeless goods instead. The Fashion Forward Icons (the majority are in China, equal to 39% of consumers), on the other hand, are very attentive to fashion and frequently buy luxury goods.
The Power Patrons (26% of Indian consumers) prefer regular purchases, mainly from elite brands. They combine iconic products and limited editions, to affirm their social status. The Quiet Luxury Enthusiast (27% of European consumers) are characterized by minimal elegance, an orientation towards discreet brands and an evergreen elegance, while the Statement Collectors look for unique and significant pieces, buy infrequently and are attentive to the iconicity of the products.
Finally, we find the Status Shopper luxury buyers, who are guided by influencers, buy a few trendy products but are attentive to the price, and the Bespoke Aficionado, who buy infrequently but in larger quantities, preferring high-quality products and “handmade” and paying attention to the personalized experience.
Despite the search for quality and uniqueness, price remains an important driver in Europe and the USA, where over 75% of consumers compare prices between different brands. In India and the United States, 60% report a perceived increase in prices (especially for cars and jewelry), while in China the impact appears marginal. A third of American consumers complain about a decline in value for money, with the exception of watches, which are still perceived as a valid investment.
When it comes to shopping experience, growing dissatisfaction seems to be emerging. 38% of US consumers say they are disappointed by the customer service of luxury brands, indicating the urgency of greater attention to relationships.
«To successfully face this new era of luxury – comments Francesco Fiorese, managing partner of Simon-Kucher – it is essential to differentiate customer service, communication channels and messages based on the different consumer profiles, building personalized experiences».
«In this context, strategic partnerships play a key role, with particular attention to shared values and storytelling – adds Marco Torino, senior director of Simon-Kucher -. The definition of a pricing strategy consistent with the perceived value of the brand, together with the offer of distinctive experiences, will become essential competitive assets. To conquer younger targets, in particular, it is essential to integrate sustainability and digitalization as structural and not accessory elements of the value proposition»
Louis Vuitton new store in Mumbai
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