India’s luxury goods market has been growing by more than US$255 million a year in absolute terms, on a par with the United Arab Emirates and considerably stronger than Singapore and Australia.
All luxury categories witnessed a big rise in demand with double-digit growth across the whole of the 2008-2013 review period. This was fuelled mainly by a mushrooming urban middle class with a penchant for Western brands.
Growth expectations among the world’s biggest luxury goods manufacturers are highly optimistic. This is a country, after all, where as many as one million young adults are entering the job market every month and it offers a potentially unrivalled demographic dividend.
There are, however, growing signs that the wheels are slowing on India’s hitherto unstoppable luxury goods growth surge. The combined effects of a cooling economy, rising prices and lacklustre job creation are causing middle-income consumers in particular to tighten their belts.