New trends in India's luxury market: Meet the cost-conscious buyer

Mumbai: India’s luxury market, which grew 15 percent in the last three years and which is estimated to have reached $7.58 billion in 2012, is witnessing emergence of `closet consumers’, a report has said.

It defines `closet consumers’ as those who look at the cost and value even when shopping for luxury products. “The inner conflict between a middle class mindset and the globally rich income level, between conspicuous consumption and a level of luxury which is a reward for hard work shapes what we call the closet consumer,” industry body CII and IMRB International said in the report titled `The Changing Face of Luxury in India'.

Such consumers’ definitions, symbols of luxury are often at variance with conventional definitions and symbols.

[caption id=“attachment_336681” align=“alignleft” width=“380”]  The report said that the growth in the luxury market was due to robust growth in the luxury categories such as apparel and accessories, perfumes, fine dining and automotive.[/caption]

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The report divides closet consumer into four segments – Connoisseurs, Experientialists, Aesthetes and Flaunters. Accordingly, in the recent past luxury products have grown the fastest at near 22 percent, compared with luxury services at around 15 percent and luxury assets at a much lower 9.4 percent, primarily contributed by slow growth in luxury real estate.

The growth in the luxury market is on account of robust growth in the luxury categories like apparel and accessories, perfumes, fine dining and automotive.

However, the report said the Indian luxury market accounts for a negligible 1-2 percent of the global luxury market.

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“Multiple factors are contributing to the slow growth – low priority status assigned to luxuries by the government, lack of adequate range of luxury goods and service levels that are below par.”

Industry experts believe that it is the Indian culture that dissuades people from flaunting their wealth, but experts are also optimistic about change in mindset in coming years. “The luxury market will boom in India over the next few years,” the report said.