Double digit growth in India’s luxury market drew strong attention from various global luxury brands during 2011 and 2012. Whilst India is one of the smaller markets in value terms globally, its growing number of high net worth individuals and their strong appetite for luxury products ensured that the market saw one of the strongest growth rates in the Asia Pacific region.
Increasing disposable incomes, the slow improvement in infrastructure as well as the expansion of modern retailing and influence of Western culture all provided a solid platform for promising growth for luxury goods.
Global brands target India
The central government of India allowed 100% foreign direct investment in single brand retailing in 2012. This significant step will lead to foreign luxury brands increasing their focus on the Indian market. Indians working with multinational companies and the growing number of people travelling abroad for leisure and business are also building awareness of global luxury brands and this is expected to enhance demand for global luxury brands in India.
Gifting tradition drives appeal of luxury goods
The ancient concept of gift-giving remains prominent in India and the trend to offer luxury goods to show off one’s wealth and status was a key driver of luxury goods sales over the review period. At corporate events and for marriages amongst the wealthy it has become common to greet guests with luxury gifts. Also, luxury gifting between managers and workers is also driving the luxury market. Furthermore, businesspeople looking to influence government ministers and party leaders are also offering luxury products.
Republished with permission from Euromonitor Market Research Blog, originally posted on August 2013
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