The Great Indian Luxury Consumer

To spend is human, to splurge divine

Splurging on luxury goods is no longer a taboo, impulse buying is a pleasurable pastime. The past decades have changed the attitude of the Indian consumers towards these goods. Indian consumers throng high-end stores, looking for that one item, becoming a part of a very dynamic and diverse marketplace that is still growing and will only expand.
Looking back, the country’s economy was in shambles post and pre-independence. Only the royals back then were able to afford these goods. The Patiala Necklace, for example, made by jewellery giant Cartier for Maharaja Bhupinder Singh of Patiala in 1928 and Maharani Gayatri Devi’s silk chiffon sarees, still symbolize opulence and luxury.
“Luxury is not something new for Indians. Luxury existed for us over 500 years ago. There were exquisite silks and spices present then,” says international luxury expert Rajat Bhattacharya.
Fleets of expensive foreign-made cars and clothes of the highest quality, such things were limited to only a select group of people. Interestingly, between 1908 and 1941, India had 1,000 Rolls Royce cars. The Maharaja of Alwar had donated some of these cars, in revenge, to the municipality workers in his state to pick up garbage.
Later on, the common man got access to luxury items through their NRI kin, who would return home with suitcases filled with these goods.

Bollywood, a growing industry then, contributed significantly in shaping people’s opinions around the luxury market. The common man’s idea of luxury in the past was the clothes their favorite actors wore or the cigarettes they smoked. It was only in the 1980s that the first Indian fashion designers entered the market, which until then depended on imported luxury items.
Flash forward to the present and the scenario has changed. The old notion of checking the price tag before buying anything has started changing. It’s not just the price, but also quality and the experience. Owning luxury items has become a matter of pride and self-expression for people. Owning these items helps elevate their social status and gives them immense pleasure.

“Owning these goods help people show others that they’ve arrived,” says Bhattacharya.

The consumers are not just limited to the ultra-rich elites, even the upper-middle class, millennials and Gen-Zs, want to get their hands on the latest styles. The younger generation of consumers have a precise idea of what they want and these goods contribute to their idea of self-expression.

Greater internet penetration, smartphones and access to social media has given the phrase ‘I want it, I got it’ more traction. Today’s consumers, fuelled by social media, influencers and advertisements, tend to impulse buy these goods.

Consumers in Tier-2 and Tier-3 cities too have emerged as a sizeable customer base. The sheer number of e-commerce platforms that provide these goods helps increase the consumption of these goods. These cities have huge untapped potential in terms of consumers and their spending capacities. Residents of these cities need not wait for a chance to visit stores in metro cities or other countries to swipe their cards, when they can get their favourite goods delivered home.

Over the years, the phrase ‘big fat Indian wedding’ is no longer a joke. A $50 billion industry, it comes second in the world, right behind the USA, as per a report by KPMG. The families involved ensure it is an elaborate affair, for example flying the guests in private jets to international destinations.

If we look at the market currently, the IMF pegs India’s GDP growth at 9.5% for the year 2021-2022. By 2030, a report by CEBR says, India may become the world’s third largest economy. What does this mean for luxury goods? As per Indiaretailing.com,

the luxury market is expected to expand and grow beyond $200 billion in another decade. A recent McKinsey report says that 300 international fashion brands are looking to enter the Indian market. This will eventually help to pull in more consumers and provide the present customer base with more choices, not to mention providing hundreds if not thousands of jobs.

In a nutshell, the luxury market is only going to grow. A lot of huge companies are adapting to the current situation in their own way. One of them being the option for consumers to be able to virtually try out goods on the company’s website before buying.

“The trend of revenge buying will continue. Given the situation, people are not going to give up the opportunity to do what they want to while they are still alive,” says Bhattacharya.

The main aim for most of these companies is to stay relevant and the only way to do that is to keep churning out bigger, better stuff. And the Indian luxury consumer will continue to splurge.

To pursue a career in the Luxury Industry, join the Master’s Degree in Luxury Brand Management at the INSD School of Luxury. A 12-month program that lets you study in India and Paris and work for up to 6 months, accredited by College De Paris. To read more