Top government officials and industrialists of India maybe spending wakeful nights over inflation fears and changing oil prices. But our Indian luxury goods market manages to remain unruffled. Consumers’ opinions have seen major changes in their preferences towards luxury standpoint today. They want to experience new opportunities coming up their way and especially those affordable for the pocket. It has become a thing of past that middle class was quiet happy with a new Titan or Timex watch, but here comes another phase where there is a huge craze for luxury goods. It is very obvious that the young professionals staying in simple middle class homes – sporting luxury brands such as Tag Heuer, carrying Michael Kors bags, and wearing Zara outfits.
According to this year’s economic reports, it seems that country’s luxury market will grow considerably till 2018. Mushrooming urban middle class and pool of high net worth individuals (HNWIs) are expected to contribute significantly in gross spending. Whereas, it is pragmatic to say that in the today’s consumer market, a lower price tag wouldn’t fascinate the affluent lot even during an economic slump.
Many more reasons are there to justify growth of luxury segment in Indian Economy. Such as:
• Indian consumer market has proved over the time that there is a big movement from conspicuous consumption to conscious consumption.
• The perception of luxury has taken a shift from “not buying labels for status, to buying for beliefs” For example, many brands started a range of hand made products, eco-friendly bio products range to showcase its social responsibility and commitment towards nature as well as talking about ethical luxury.
• Price is no longer that gauges a luxury anymore. It is all about the brand perception, brand positioning and brand performance in the society. Buyers in the new era are open to experimentation and, unlike the older ones, easily switch brands. Also people hold an altering viewpoint of spending money on luxuries once their necessities are earned because they feel that “money in your bank account will give you utility only till you are alive.”
• Young shoppers are hasty as they no more confide to classic time pieces rather they want something classy or different for which they can easily part with their money income. To these young people, possession usually comes subsequent to sharing new ideas and new experiences.
• A new trend of affordable luxury or ‘bridged pricing’ strategy has started. Indian markets provide plethora of opportunities and brands offering product where a customer need not to spend lakh and crores. For example, BMW, Mercedes and Audi have priced their entry models very competitively in under-Rs 30 lakh price range. And, that has played to our advantage
• Though top business tycoons and other HNIs may be pro active to restraint investments or for cost cuttings, but when it comes to weddings and affluent rules, there are numerous weddings per year where the spends are over Rs 10 crore
• Few years ago luxury was a status symbol or a means to flaunt but today people want lavish expenditures for themselves. They feel they have not enjoyed their life even after working so hard all these years. Luxury has becomes part of their lives, they start incorporating it in their homes, in their livelihood, etc.
• Number of millionaires in our country is rising rapidly. This growth may drive vibrant lifestyles of the heritage rich as well as the mounting moneyed segment.
Besides metros, Tier II cities are also transforming into a big hubs for the luxury brands and have witnessed significant growth in income and thus giving rise to the budding opulent consumer. Many business heads opined that inflation and recession have had no effect on their recently launched luxury brands in Indian marketplace. Also it is widely observed that in times of escalated inflation and interest rates, players in the luxury space go safe and sound. Be it apparel or high-end consumer electronics, the force remains equivalent. Reason being luxuries are enjoyed out of choice and so remain untouched by mounting prices. Various inflationary theories have proved that during inflationary period, the gap between the rich and the middle class widens by a long way, leading to enlarged spending by affluent segment. Luxury services have roofed the passage to include travel, art, customized dining, golf and many more.
All this states that the Indian luxury market isn’t affected by the economic slowdown. In fact, it is touching its growth figures post the slowdown. Hence, it can be an attempt to prove that every sector is not so gloomy because of inflationary pressures.
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