A recent report by Assocham suggests, Indian luxury market is set to reach $50 billion by 2020.The market is currently witnessing a huge shift from being brand-driven to buying authentic products with practical value. People today prefer buying pre-owned luxury items to new ones. The mode of shopping too has changed with more people opting for online shopping than physical stores. Bollywood celebrities, who majorly influence purchase decisions, have been replaced by social media activities. The future of luxury will be defined by these key trends:
Growth in e-commerce activities
As per a BCG Report of 2017, digitally influenced expenditure in India is estimated to grow 10-fold to $500 billion by 2025. To tap this growing market, various international luxury brands are collaborating with premium e-retailers. As a recent BCG report states, 50 to 60 million consumers are making fashion purchases online in India and these numbers are estimated to double by 2020. Around 70 per cent of premium apparel purchases will be digitally influenced in the near future. Global luxury players therefore need to rethink their digital strategies.
Growth in young luxury buyers
India is home to the world’s largest millennial population who prefer buying luxury items as compared to Gen X and baby boomers. They crave for personalised and targeted promotions, and regularly seek social media as their first source of information. Luxury marketers need to tap this lucrative consumer segment by studying the values associated with them.
Market for luxury in emerging cities
For over a decade, luxury brands have enticed wealthy consumers in leading metros. As a result consumer spending in these cities is growing by 12 per cent per annum. However, recent sales records depict that Tier II, III buyers are outpacing their counterparts with respect to their luxury appetite. Emerging cities like Ludhiana and Surat are now among the top 10 markets for luxury cars. Consumer spending in these cities is rising by around 14 per annum.
Demand for unique products
Today, it is really crucial for luxury brands to offer unique services and exceptional products. To achieve this, luxury companies need to invest in latest technologies and ‘out of the box’ ideas. Burberry offers entertaining and engaging experience to its clients by having large screens and live-streaming hubs throughout its Regent Street flagship store in London. Sephora provides beauty lessons to provide unique experience to its clients. To attract the increasingly demanding young Indian consumers, luxury stores can enhance shopping experience by having their own cafes, art galleries or even spas in their outlets.
Investment in social media influencers
Over 70 per cent of purchases in India are influenced by the social media. Furthermore, around 70 per cent of teenage YouTube subscribers trust influencer opinions over traditional celebrities. Therefore, luxury marketers need to invest more on this segment.
Growing environment consciousness
Young Indian consumers are increasingly becoming environment conscious. A recent study by Mastercard reveals about 70 per cent of buyers in India emphasise on ‘green’ and ‘ethical’ while making their purchase. Luxury brands therefore need to constantly innovate on sustainable products to entice the Gen Y.