Himani Pundir
Apr 15, 2024

Bling bling: Exploring the landscape of luxury in India

From the boom of the middle class to the 'if i want it, I'll get it' attitude of Gen Z in the nation, the meaning of luxury in India is evolving rapidly and brands need to catch up. Quantum's Himani Pundir explores.

Photo: Shutterstock
Photo: Shutterstock

Think luxury and your mind goes to superior quality in items such as wines, handcrafted products, and designer goods, symbolising exclusivity, sophistication, and association with the affluent. However, the global scenario is evolving. The emergence of economies like India and China is reshaping the landscape of luxury, expanding it beyond the realm of a select few privileged individuals.

In India, luxury historically served as a marker of social class. However, economic reforms in 1991 ushered in a globalised era, fostering growth and opportunity. This birthed the "Great Indian Middle Class" whose journey with luxury began with accessible "bridge-to-luxury" brands like Gap and Mango. These brands provided a stepping stone towards more established luxury brands. As noted in their book by Radha Chadha and Paul Husband, The Cult of the Luxury Brand: Inside Asia's Love Affair with Luxury, prior to 2007, the chasm between mid-range and super-luxury brands was vast, with the ecosystem for luxury goods still in its infancy.

Since that time, India has experienced notable growth, prompting numerous individuals to transition away from mass brands. The country's economy has been consistently thriving in recent years, driving a considerable portion of the population towards elevated socioeconomic positions and greater disposable income.

According to Firstpost, the number of millionaires in India is projected to surge by 69% by 2027, with over 19,000 individuals boasting an ultra-high net worth exceeding $30 million.

Millennials and Gen Z are also making their mark on the luxury market. A 2024 Goldman Sachs report highlights the dramatic rise in India's affluent class, with the number of people earning over $10,000 annually jumping from 24 million in 2015 to 60 million in 2023. This translates to 4.1% of India's population now entering the premium goods space, potentially propelling the Indian luxury market to a staggering $200 billion by 2030—a 3.5-fold increase according to Bain & Company.

The evolving luxury journey: From status symbols to a way of life

According to Chadha and Husband, the Indian consumer's relationship with luxury can be mapped across various life stages. It could start with the "subjugation" phase, followed by "the start of money," "the show-off," "the fit-in," and ultimately, "the way of life." Researchers in 2007 located consumers at the "start of money" stage.

This tells us that today's consumers might be somewhere between "show-off" and "fit-in," where simply owning any luxury brand is no longer enough. With growing brand awareness, consumers may seek to stand out through even more exclusive labels to differentiate themselves in an already brand-conscious social circle.

The Indian consumer is very different from luxury consumers elsewhere. They value a unique blend of quality and prestige with practicality. For instance, design or craftsmanship alone might not suffice when it comes to Indian jewellery purchases. Given the cultural significance of gold as a readily-convertible asset, factors like metal composition and resale value significantly influence buying decisions. Similarly, luxury car buyers might prioritise mileage in their Mercedes or BMWs, prompting these brands to cater to such preferences.

While some Indian consumers revere western brands more than homegrown ones, this perception has its limits. The influx of western luxury houses copying Indian designs and craftsmanship can backfire. For example, a brand like Hermes or LV venturing into sarees can be seen as less luxurious compared to established Indian heritage brands like Sabyasachi.