Flaunt factor: Rising affluence sees India's market for luxury brands swell

The year 2022 saw brands like Balenciaga, Maison Valentino, and French luxury departmental store Galeries Lafayette announce their India entry in 2022.

Luxury labels also had popular Indian celebrities become the face of their brands. Deepika Padukone was the first Indian onboarded as the global brand ambassador of Louis Vuitton. Priyanka Chopra Jonas was appointed global brand ambassador of Bvlgari.

Reliance Brands and Aditya Birla Fashion and Retail also bought a stake in Indian designers, which included the likes of Anamika Khanna and Sabyasachi, as they bet on the growing affluence of the Indian consumer.

Amit Pande, brand head at The Collective - the roof under which Aditya Birla retails all its luxury brands - said European luxury brands are exploring the US to expand. 

“There is a lot of positivity about our country. More or less everybody has understood that the market will perhaps remain small for some time to come, but an important market broadly from a penetration perspective.”

China, which is also an important market for luxury brands, has been impacted due to Covid-induced lockdowns over the past two years. 

According to Pande, China’s contribution to luxury brands’ revenue stands at an average of about 30 per cent. He also explained how the Indian customer already has a tradition in luxury - right from textiles to jewellery. The Chinese consumer picks up whatever is popular. The Indian consumer is a lot more discerning.

Atlas of Affluence (AOA), a white paper on the Indian luxury market released in 2022 in India, pegged the market at $6 billion in 2021 and expected it to touch $8.5 billion in 2022. 

The report also noted, “In the latter half of 2020 through 2021, affluent Indian consumers bought luxury goods and some experiences almost unbridled by the challenging restrictions of the pandemic, both on the mind and at the mall.”

It explained that the key driver behind brand affinity among Indians was brand name, followed by logo and aesthetics. 

“The exciting experience of being pampered with family and friends compiled with high-value purchases demand a second opinion in choosing the best product that reflects their personality,” AOA said in its report.

Indians are also opting to shop for luxury goods online. Online shopping platform Ajio Luxe from the House of Reliance has 248 brands (120 international and 128 Indian brands) currently, averaging nearly 1 million sessions a day with more than 1,000 orders daily. 

Ajio Luxe has 40 exclusive brands, of which 28 have been launched in India for the first time, AOA said in its report.

Even for Aditya Birla’s The Collective, 25 per cent of sales come from its e-commerce. The report also noted that 50-55 per cent of demand for luxury goods on The Collective’s e-commerce portal comes from cities where there are no physical stores.

Sandeep Goyal, managing director of advertising agency Rediffusion, said luxury brands have a flaunt value. “Indians have resorted to revenge buying also with the rise of consumers now having access to content from overseas markets over over-the-top platforms has caused their tastes to get more refined with time.”

He said the availability of these brands in India has increased and is available at competitive prices.