World has gone through terrible economic turmoil during the past two years. Despite all the recession woes, Indian luxury market is getting heated up. With the increasing number of millionaires, Indian luxury market is attracting the eyes of global luxury brands.


Global population of wealthy people, known as High Net worth Individuals (HNI) has grown 17.1% over 2008 to reach 10 million during 2009. Assets of the creamy people keep increasing steadily, against the backdrop of the Indian thrift, while this segment is creating attention that is magnetizing both domestic and international luxury brands to consider their options seriously.


A report released by Capgemini and Merrill Lynch Wealth Management states that while HNIs in most of the countries have increased in numbers, India has almost doubled it. The growth of creamy people in India is more comparatively over any other country in the world.


 

 

 

 





 


HNI in the Asia Pacific region rose to 3 million, a 25.8% increase catching up with Europe for the first time. Asia Pacific takes the credit of having eight out of total ten fastest growing HNI population. While considering the HNIs in the Asia Pacific region, Hong Kong saw good growth of 105%, followed by India with 50.9% and China with 31%.

Increasingnumber of Indian millionaires:

During 2006, among Indians, people who owned more than a million dollars crossed 1 lakh making India the second fastest growing HNI segment in the world, next to Singapore. In India, the GDP growth increased from 6.1% during 2008 to 6.8% during 2009. Market capitalization in countries of China and India was doubled during this period. Capitalization of markets increased by 103% in India during 2009, and the appreciation of stock market can be a major reason for the drastic growth of HNI. A report about luxury in India forecasts that, by 2015 Indias overall luxury market will grow by 21% and become three times bigger than its current size.

Indianmillionaires enhance the luxury segment:

What do these millionaires do with all their money? Cap Gemini and Merril state that they invest their currency in what is called as 'passion investments'. This consists of collectibles, consumables, primary residence, and consumer durables. As a fine balancing of their head and heart, the HNI are turning to passion investments to diversify their portfolio to satisfy their weakness for a luxurious lifestyle. This includes jewellery, art, and similar collectibles.

Indians have developed a strong affinity towards luxury items. They are conservative in their investment strategies, and mostly prefer to invest in jewellery, gems, watches followed by luxury collectibles, and art works. In India, consumers for luxury brands are mostly spread in the five metro major cities of Delhi, Chennai, Bangalore, Kolkata and Mumbai. Closely followed are other I tier, and II tier cities such as Chandigarh, Pune, Ahmadabad and Hyderabad.

There is a change in outlook for the luxury marketer. Marketing on the Indian market has its own challenges. Selling to the customer base from this segment requires the creation of appropriate distribution platforms, and right and timely introduction to the right target audience. The nature of the luxury market is opaque, which makes brand penetration a complex process. Foreign brands also need an inside partner to help them speed, and strengthen their marketing process.

India and China are expected to lead the globe with HNI growth, and is likely to surpass other economies. Industry experts predict that, by 2015 Indian luxury market will grow 21% more and become almost three times larger in size than it is right now. Retailers can avail profitable opportunities, if they look beyond their boundaries.

References:

1)     Data source: Capgemini, Merrill Lynch Wealth Management

2)     The 14th annual World Wealth Report 2010, capgemini.com

3)     moneycontrol.com

4)     timesofindia.indiatimes.com

5)     in.news.yahoo.com