India’s luxury market to exceed US$10 billion by 2014
According to luxury industry experts present at the 2013 CII ET Dialogue Luxury event organized by The Economic Times and CII (The Confederation of Indian Industry) India could emerge as an important luxury market in the next decade but pricing will continue to play a key role in expanding the market. As of now, India’s luxury market is much smaller compared with $318 billion globally but the 1.2 billion population, which contains affluent consumers, makes it very appealing.
The latest report by CII-IMRB presented at the event indicates that India’s luxury market is set to exceed the$10 billion-mark by 2014 boosted by a new class of wealthy termed as the ‘closet customers’ who have have joined the traditionally rich contributing to higher luxury sales. According to the CII-IMRB report, the impact of the economic slowdown in 2013 has impacted the luxury market to a certain extent but by mid-2014 the market is expected to revive and continue its growth trajectory and grow at nearly 17 per cent in the year 2014. From about $3.66 billion in 2007, the luxury market has more than doubled to $7.58 billion in 2012. The luxury market in India is slated to grow at a compounded annual growth rate of over 16 per cent for next three years, says the CII-IMRB report.
“India could become an important luxury market in the next decade. However, right pricing is very important. A luxury brand cannot bring down prices just to attract more customers, to make it more affordable. Premium pricing is essential to ensure the brand exclusivity,” Canali CEO Stefano Canali said at the 2013 CII ET Dialogue Luxury According to Canali, in order to become an important luxury market, India’s policies must be conducive. “High import duties and other impediments such as infrastructure are negatively impacting India’s prospects,”
Genesis Luxury Fashion Pvt Ltd Managing Director Sanjay Kapoor said despite economic slowdown, the luxury market in India is poised to grow in 2014. Genesis retails in India luxury brands like Bottega Veneta, Armani, Burberry, Canali, Paul Smith and Jimmy Choo.
According to BMW Group India President Phillip von Sahr, the next challenge is ensuring brand loyalty from customers. “For luxury companies, making brand familiar is the most important challenge. The next is to ensure that customer remains loyal to the brand,” he said.
Bottega Veneta President & CEO Marco Bizzarri, said: “India and Italy have a lot in common, especially the tradition of luxury. There is tremendous scope for a flourishing luxury goods market in India.”