Indian luxury market to cross $18.3 billion by 2016

Areas such as five star hotels and fine-dining, electronic gadgets, luxury personal care, and jewelry performed well in the year of 2015 and are expected to grow  by 30-35% over the next three years.

[su_highlight background="#63A498" color="#FFFFFF"]MARKET[/su_highlight] An Assocham study stated that with the increasing brand awareness and growing purchasing power of the upper class in tier II and III cities, Indian luxury market is expected to cross $18.3 billion by 2016 from the current $14.7 billion growing at a compound annual growth rate (CAGR) of about 25%. Big ticket spends such as on luxury cars mainly SUVs are likely to continue, growing upwards of 18-20% over the next three years, driven by consumption in smaller towns and cities.

With the luxury market expected to grow at over 25% year on year, private equità investments (PE) in the luxury segment are expected to increase and support the enhanced size of the Indian luxury market. The Chamber paper segregated the luxury sector into: products (apparel and accessories, pens, home decor, watches, wines and spirits and jewellery), services (pas, concierge service, travel & tourism, fine dining and hotels) and assets (yachts, fine art, automobiles). According to the study, the high internet penetration across tier-II and tier-III cities along with high disposable income shall lead to approx 100 million transactions on the Internet by 2020. As a result, the luxury consumption is going to increase manifold in the country. Luxury jewelry, electronics, SUV cars and fine dining have grown beyond expectations, while apparel, accessories, wines and spirits have continued their strong growth in 2016, according to the Assocham assessment.

Consumption of branded wine is also likely to register over 30% increase in the metro cities. Some of the significant players across various verticals who performed well in 2015 included - GUCCI, Christian Dior, Louis Vuitton, Canali India, LVMH India, Judith Leiber, The SPA Group, Starwood Asia Pacific Hotels & Resorts, and Reliance Brands. (source: The Economic Time)