India's luxury market unscathed by slowdown, poised for growth: Assocham

NEW DELHI: India's luxury market bucked the lingering economic slowdown and swelled to $8.5 billion in 2013 as savvy consumers continued to open their purses on high-end products and services, an Assocham study found.

"Be it a family holiday to exotic locations in Europe or US, sporting branded jewellery, driving around in top-end SUVs, going out for a fine dining in five star hotels, India's luxury life style market has remained largely affected by the economic slowdown in 2013," Assocham Secretary General D S Rawat said.

He reasoned that a young demographic profile, increasing number of millionaires and aspirational integration with the globe are all among the driving factors for the luxury markets in India. Since high-end products and lifestyles are not price elastic, they are not much affected by the slowdown.

According to the study, the luxury market in India witnessed a growth rate of 30 per cent in 2013. The segment stood at $6.5 billion in 2012 and is estimated to cross $14 billion mark during the course of the next three years.

Sectors such as five star hotels and fine-dining, electronic gadgets, luxury personal care, and jewellery performed well in the year of 2013 and are expected to grow by 30-35 per cent over the next three years, the study revealed.

Besides, big ticket spends on luxury cars are likely to continue, growing by 15-20 per cent over the next three years, driven by consumption in smaller towns and cities, it said.

The study divided the luxury sector into various categories including apparel and accessories; pens; home décor; watches; wines & spirits; jewellery; services like spas, concierge service, travel & tourism, fine dining and hotels; and assets like yachts, fine art, automobiles.

The study further said that 2014 will be a good year for the Indian luxury market despite the upcoming general elections, even though not many economic reforms may be introduced.