With increasing exposure to international luxury brands and rising purchasing power among the affluent class, the luxury market is expected to grow 30 per cent to touch USD 30 billion by December, says a report.
The country’s luxury market is currently pegged at USD 23.8 billion.
“With growing exposure of international brands amongst the youth and purchasing power of the upper class in small towns and cities where luxury cars, bikes, exotic holidays, destination weddings are no strangers, the market is set to touch USD30 billion by year-end,” industry lobby Assocham said in a report today.
Economic growth leading to urbanisation and higher disposable incomes has helped propel growth of luxury goods, according to the report.
“Increasing retail presence of luxury players and higher numbers of luxury brands entering the country has resulted in strong performance of luxury goods,” it said.
The report also estimated that the market will see a five-fold growth in the next three years, with the number of millionaires expected to multiply three times in another five years.
Assocham believes high Internet penetration across small towns along with high disposable income will lead to about 100 million transactions on the Internet by 2020, resulting in manifold increase in luxury consumption.
According to the report, many designer brands have become increasingly conscious of their offerings and very sensitive to the needs and desires of their target consumers with the luxury market value growing at a strong rate.
“They are investing on not just promoting their products but also understanding their consumers,” it said.
The report said with positive policies for the retail industry, the country has become an attractive market for international brands. However, lack of suitable infrastructure, high tax rates, rental costs and parallel growing market of counterfeits are still some of the areas of concerns for the industry, it said.moneycontrol