This publication provides an overview of the Indian luxury market along with the factors influencing the Indian consumers, upcoming trends in the market and key challenges the luxury sector faces. This background paper was released at the 4th India Luxury Summit on 25th November, 2016 at New Delhi.
India is expected to register fastest growth, ahead of United States which is the biggest market for luxury goods in the world. Indian Luxury segment registered a growth of 25% in 2015 over previous year as compared to the U.S. growing at 20% and China at 17%
The Indian consumers are conscious of brand value, at the same time not willing to pay a hefty amount. Producing in the country will also result in elimination of the biggest hurdle i.e. the import duties. This will help in greatly reducing the prices, improving a wider acceptance among the customers. 90% of Audi’s sales have been attributed to locally built cars while Mercedes Benz has achieved almost 60% of local manufacturing.
The current government through its “Make in India” initiative aims to attract international companies to set-up/ expand manufacturing capabilities in the country. Thus favorable schemes regarding the FDI limit, land tax exemptions etc. are available to manufacturers.
Companies looking to create an impact on the Indian luxury market may also consider “Make-An-Indian-Brand”. This would entail creation of an Indian brand for the Indian consumer which also has a potential to be launched in the international market. Astute companies like Forest essential and Kama Ayruveda have been successful in following this path. Companies can follow this examples and gain a first movers’ advantage in the country.