Luxury mkt grows 20% despite slowdown signs

10 Oct,2011

By A Correspondent

 

The Indian luxury market grew at a healthy 20% during last year, reaching a size of $5.8 billion, despite signs of the reemergence of a global slowdown, says a CII-AT Kearney report on Indian Luxury.

 

In 2009, the luxury market in India stood at $4.76 billion and is expected to grow to $14.7 billion by 2015, notwithstanding the infrastructure and regulatory constraints, says the study, which will be unveiled at the CII-ET Luxury summit in Delhi on Tuesday.

 

Some segments of the market, of course, have seen runaway growth, compared to others. The jewellery segment, for example, has seen a growth of 30% in the last one year due to increasing prices of gold and diamond.

 

The luxury electronics and car segments have seen a growth of above 35%, while fine dining has seen a whopping 40% growth in this period. All of these segments have seen higher growth than expected in the last one year. Apparel and accessories, watches and personal care have also seen robust growth, between 24-30%.

 

The only two segments that lagged last year are realty and yachts . The rapid growth in luxury sales can be attributed to the fast growing affluence in the country.

 

According to a global affluence study by research firm TNS, India has 3 million affluent households, defined as those with more than $100,000 (around Rs 50 lakh) of investable surplus. In a report released last month, Swiss wealth manager Julius Baer forecast that the wealth of HNIs in India, with assets of $1 million or more, would more than double to 4,03,000 by 2015.

 

“Skepticism is being replaced by an increasing sense of buoyancy and promise in the future potential of the market. Consumers are accepting and adopting global trends much faster than anticipated,” says the report.

 

Luxury players report that they are making money at the store level, which means that the model is proven and now it is a question of adding growth capital to gain scale.

 

Source:The Economic Times

Copyright © 2011, Bennett, Coleman & Co. Ltd. All Rights Reserved

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