Indian economy is one among the fastest growing countries in the world. Indian luxury market is predicted to reach USD 5.8 billion in the next 5 years. The country is the home for more than 83,000 millionaires, and is growing manifold with a 19.3% increase every year. Increasing amount of disposable income, dual income, and global exposure are a few growth drivers. Aspirations of the middle income population towards luxurious life style are increasing, which is the major influencing factor for the growth of the market.
India is the world's third largest consumer class having 122 million individuals with purchasing power. Personal consumption of Indian consumers is estimated to be 67% of GDP, which is higher next to US at 70%. Growth for luxury market in India is predicted by industry analysts to be drastic between 2015 and 2020 as more people are likely to enter the consumption curve. Market for luxury items have grown well by 29% over the projected 23%.
Luxury Brands in the Indian Market:
Luxury brands in India saw a continuous double digit growth during the first half of 2011 as against 2010. Luxury apparel retailers are selling out their 2011 inventory, and are placing orders for 2012 seasons. Luxury brands such as Louis Vuitton, Tag Heuer, Mont Blanc, Gucci, Harley Davidson, hold big potential in the Indian market. Burberry, the British fashion icon for coats, and bags has established their market in India. Currently, the brand is chalking plans to scale up its with company owned stores, and new categories of products at high-end malls.
Growing beyond the metros:
Fashion Apparels:
India has gained international acclaim for its apparel designers. Apparels have contributed to a strong growth. It is one among the most brand conscious countries in the globe with increasing number of shoppers seeking to buy designer, and branded apparels. The CII-AT Kearney Report states that skepticism is being replaced by an increasing sense of buoyancy and promise in the market. Indian consumers accept, and adopt global trends quickly. Medias make it possible for global companies to enter into the Indian market with ease.
Challenges:
- However, the key challenge for the global brands is to target and reach the right kind of customer. Getting the right basics, and experimenting cautiously by exploring new markets with care will open new and profitable options for the global luxury players.
- Indian consumers have the capacity; but, do not have the inclination to spend on luxury items. They also have reservations against buying less known brands, and shopping in India.
- Global brands will have to face constraints regarding real estate options, back end infrastructure such as logistics, regulatory concerns, and FDI restrictions.
References:
1) Ciionline.org
2) Timesofindia.indiatimes.com
3) Indiaretailing.com
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