Luxury market likely to touch $14.7 billion by 2015: Report

NEW DELHI: India's luxury market, which is small compared to global standards, is likely to grow three times and touch $ 14.7 billion by 2015, a CII-A T Kearney report said today.

In 2009, the luxury industry, including products,services and assets, was estimated at $ 4.76 billion.

"We believe that there exists a large latent demand in India, constrained by both demand side and supply side factors," the report said.

In matured markets growth has plateaued, while in India it is highly under penetrated, Neelesh Hundekari, Principal and Head, Luxury & Lifestyle Practice, A T Kearney India said.

He said the Indian middle class with an income of around Rs 10 lakh per annum will give the luxury market in the country huge fillip.

The major component of this market is jewellery. Another fact emerges from this study is that Indian luxury market is 60 per cent dominated by men, if jewellery is removed.

The report said Indian consumers are young - 30-45 years old. Medium size enterprise owners forms the largest segment of Indian consumers. Traditionally wealthy families, large industrialists and corporate executives are also important segment, it said.

It further said that scattered nature of the target population is a big concern for the industry.

"Cost of reach is high, results uncertain and word of mouth continues to be the best method to create a 'buzz'", the report said.

It also said companies have to struggle with lack of credible real estate options, underdeveloped back end infrastructure like warehouses as well as regulatory restrictions on FDI and high import duties.