India’s big upgrade wave: Rs 1 crore+ homes, premium cars, Swiss watches & pricier phones

Consumers in India are upgrading across homes, travel, cars, electronics and everyday essentials, even as finance minister Nirmala Sitharaman urged companies to look beyond the affluent urban buyers, emphasising growth will lose its structural durability if premiumisation remains confined to cities.

The demand expansion to smaller towns and rural markets is challenging companies to look beyond the traditional base of urban buyers.

About 54% of residential sales in the eight major cities comprised homes priced above ₹1 crore in the first half of 2026, up from 49% a year earlier, showed Worldpanel by Numerator data. International air travel grew 3.9% in FY26, nearly three times domestic traffic growth.


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Spending More

Utility vehicles contributed 68% of total passenger vehicle sales and imports of pricier Swiss watches surged 37% in the first half of 2026, showed Worldpanel data.

In FMCG, the premiumisation trend is becoming evident not just in the number of categories consumers buy, but also in how much they spend on shopping. Worldpanel data showed premium-oriented households spending as much as 2.3 times more per trip in some everyday categories.

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Jacques Lebel, managing director, L'Oreal India, said 40% of its beauty product sales are for items priced at less than Rs 100, such as Garnier hair colour and L'Oreal shampoo sachets, unusual by global standards.

"We consider our addressable target to be 300 million people," he said. "That goes quite deep into the country. At the same time, there's an opportunity at the high end because in India, there's more and more wealth creation and global aspiration. So, we are not in a situation where we say, it's one or the other. It's both."

Sitharaman on Tuesday warned that companies risk weakening the durability of consumption growth if premiumisation remains concentrated among urban consumers. "India's consumption base rests on working families across agriculture, rural construction, transport, and informal enterprise," she said. "If corporate India pursues premiumisation for the urban tier alone, growth will lose its structural durability."

The finance minister said the country is at a structural inflection point, with the next phase of consumption expected to be driven by households moving into higher-income brackets with greater discretionary spending.

Fernando Fernandez, chief executive of Unilever, said at a recent investor meet that the opportunity in India isn't merely to sell expensive products to affluent consumers, but to move mass consumers up the value ladder as incomes rise.

Electronics upgrade

A similar shift is manifesting in appliances and smartphones, marked by a shrinking base of the entry-level segment.

The entry and mass segments' share of category sales in electronics and smartphones has declined several percentage points over the past year, industry executives said, noting that change in consumption pattern and easier EMI financing are encouraging consumers to buy higher-priced products.

In refrigerators, the 180-190 litre segment has become the largest in single-door, direct-cool models, accounting for about 60% of sales, while the sub-180 litre segment has shrunk 5-6%. In semi-automatic washing machines, 8-9 kg models have cornered the biggest share, while the erstwhile largest 7-8 kg segment has shrunk 15% and models below 7 kg have slipped more than 22-25%.

"Consumers across markets and income groups are upgrading to larger capacities, including first-time buyers and those in upcountry locations," said Kamal Nandi, business head (appliances) at Godrej Enterprises Group. "Their requirements have gone up - people store more food nowadays and buy much more garments than ever before, or prefer higher star-rated energy-saving products, which cost more."

Nandi said the spread of ecommerce as well as value and fast-fashion retail in smaller towns has increased consumption, while deeper penetration of EMI schemes is helping make higher-priced appliances more accessible.

The smartphone market showed an even sharper shift. The share of models priced below Rs 15,000 fell from 45% of total sales in 2024 to 42% in 2025 and to 24% this year, according to market tracker Counterpoint Research data.

"Premiumisation and easier financing are encouraging consumers to move towards higher price bands," said Tarun Pathak, research director at Counterpoint Research. "This trend has been particularly pronounced in the sub-Rs 15,000 segment this year, as rising memory costs have pushed brands to move their portfolios up the price ladder."

Pathak said tier II and beyond markets recorded 8% year-on-year growth in premium smartphone purchases in 2025, helped by wider financing options.

Catching up

Kartikeya Sharma, president at AB InBev India, said the company is seeing the emergence of premium demand in markets with minimal presence previously.

"The growth starts to be almost equal to tier I-III, urban, semi-urban, rural," he said. "What has caught us completely by surprise is the rural growth. For instance, Jharkhand has become one of the most attractive markets, and just intuitively, you would not think that Jharkhand, given its populace being fairly non-urban, would be a heavy hitter in premium. But we went from zero to 6 lakh cases of premium beer."