Can India catch up to China in global luxury spending?

While global spending on luxury goods rose by an estimated 17 percent in 2011, a large chunk of this was boosted due to consumer spending in the Asia Pacific region, which now accounts for almost 27 percent of luxury spending worldwide, up from 16 percent five years ago, according to a report by Knight Frank & Citi Private Bank.

And this is expected to rise to 33 percent by 2015, said Verdict Research.

[caption id=“attachment_258707” align=“alignleft” width=“380” caption=“Asia Pacific region now accounts for almost 27 percent of luxury spending worldwide, up from 16 percent five years ago. Reuters”]  [/caption]

The Asia-Pacific region is proving to be a promising market for luxury brands such as Cartier, which has recorded a huge increase in sales in the region over the past five years. Luxury car manufacturing Bentley also saw its sales double in China last year to 1,839. However, India still has some catching up to do in spite of the growing economy and spending power of its High Networth Individuals (HNIs).

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“Indeed, we only have one boutique in India (New Delhi), due to high import taxes on luxury goods. Watches, for example, cost 50 percent more in India than in other markets. So our Indian clients buy when traveling abroad. This is very unfortunate, because we see a very high potential in this country” said Bernard Fornas, Ceo & President, Cartier, in the report.