Going by a recent study by ASSOCHAM and YES Bank, the facts sound extremely encouraging for the Indian luxury market where scores of global players have penetrated in the last few years. Despite economic slowdown, the Indian luxury market grew 25% till 2015 and touched $15 billion. In year 2014, India’s market for global luxury brands was just about $8.5 billion, which indicates that this bullish outlook will continue in the luxury sector. The study said that the categories with high growth rates in 2015 such as luxury jewellery and personal care, electronics, SUV cars and fine dining are expected to grow by 30-35 per cent over the next three years. This augurs well for the gem & jewellery industry, which can utilize the opportunities that arise in this sector.
Interestingly, the survey carried out by the Diamond Producers Association (DPA) contradicts the general opinion currently that millennials are not interested in jewellery, more so the expensive diamond jewellery as they are more likely to opt for other luxury items including electronic goods, travel to exotic places and so on. It indicates that the millennials are almost twice as likely to have bought diamond jewellery as a holiday gift in comparison to non-millennials. So, everything is not lost yet for the diamond industry and the doomsday predicted by some pessimistic industry analyst is far from true. Besides millennials and other age groups would rather receive one meaningful gift than a lots of smaller gifts, which are invariably stored away and forgotten.
In India, jewellery retail is witnessing a huge transformation, especially in luxury jewellery retail market. On the whole, the retail jewellery market which is growing by 25 percent currently, is indicating further rapid growth in the coming years. The notion that jewellery should be considered as investment is fast changing and has transformed to a fashionable accessory. Of late, a large number of overseas luxury brands have made entry into India, which has the changing mindset of Indians towards branded products and contributed immensely to this transformation.
Today, with luxury retail jewellery market gaining momentum, many Indian players are consciously making efforts to offer high-end jewellery that are in par with foreign brands in design, quality and aesthetics.
All said and done, one has to accept that there is immense scope for India’s luxury market to grow, what with the country’s economy growing at a high and consistent pace. In the past, it was mostly the ancient India’s maharajas, maharanis and the super wealthy who were the high end jewellery consumers. But with changing times, the scenario is changing and to take the jewellery market forward in terms of brands expansion, the Indian government should encourage growth by suitably altering policies.
Today, one can see that the designer or luxury jewellery is in great demand in the country as the gold jewellery has lost its sheen as an investment vehicle. Currently, with consumers becoming more brand and fashion conscious, international brands as well as renowned Indian brands are introducing innovative products that is opening out a huge market for the genre of branded luxury jewellery in India.
The luxury concept in India is as old as time itself, going by the enormous display of wealth and utilization of jewellery depicted in our mythologies; and later with the opulence that history has recorded in relation to the luxury jewellery used in huge quantities by Indian royalty. Considering the importance and role of luxury in yester years’ social class, the situation has continued to the present and become more obvious at present with increase in per capita income and consumption.
As of today, on the back of economic deregulation and a growing young working population, wealth generation, fast GDP growth, increasing per capita consumption, the luxury market in India is expanding rapidly. Enormous potential for global and domestic jewellery brands are being sustained by the wealthy Indians, whose demand for luxury goods is insatiable.
Research statistics by ASSOCHAM puts down the fact that India would have more than double the number of High net-worth Individuals (HNIs) to more than 403,000 in 2015, from a mere 153,000 in 2010. This year about 50% of the customers are said to come from smaller cities, indicating a bright future for the Luxury Market, which is yet to achieve its boom.
India’s National Skill Development Corporation (NSDC) has predicted that by the end of 2022 around 1.76 million people will be required to stock all the luxury brands and services. The art of luxury is very much alive in India and with the democratization of luxury in recent years, the future of luxury jewellery market will soon reach greater heights on par with countries like China & European countries.
India is the second fastest growing economy is highly sought after by overseas brands. Foreseeing the demand of luxury jewellery in India, overseas brands are vying with each other to set up shop in India. The country’s rich fashion history coupled with numerous Indians in the billionaire‘s club has international as well as the local brands, is focusing on this section of the population, which is growing by the day.
Recognizing the potential of the Indian luxury market, it is clear that most global luxury brands have enormous interest in the Indian market. According to market analysts, the next decade will see high growth in the number of high HNIs, as they will comprise of mostly first-generation entrepreneurs and young professionals who will be the largest consumers of luxury.
India’s luxury brands
The foray of international brands into luxury jewellery sector notwithstanding, many national brands have made a mark for themselves as well. The market place is crowded with renowned brands like Tiffany & Co., Harry Winston, Ganjam, Mirari Jewels, Jewelex, Anmol Jewellery and many others vying for the jewellery connoisseurs’ attention. The luxury jewellery market is growing and how-- High-end Jewellery catering to the tastes of all ages and there for the asking. Jewellery to suit the needs and wallets of the upper middle class and high net worth individuals is aplenty begging for choice. Innovations reign and design is the king …
In a bid to shift to luxury jewellery, Indian players are taking all innovative steps to change their business modules. Of late, key retail chain owners and noted single store owners are keen to offer in high-end diamond jewellery, while offering the regular entry point jewellery for the masses as high-end jewellery is in great demand in the market.
Taking a cue from foreign players who have entered Indian luxury jewellery retail, domestic brands are also converting themselves and entering the luxury class from purely mass retail.
Going ‘Desi’
Understanding Indian sensibilities, many leading national and international luxury jewellery brands are creating designs to match Indian tastes. Jewellers like Anmol, Malabar Gold & Diamonds, Asmi, Kalyan Jewellers, Joy Alukkas and a host of retailers and chains regularly come up with high end jewellery with Indian motifs especially for the Wedding Collections, which are very high demand with the Indians. Many mass jewellery offering domestic jewellery brands that have made a name for themselves are quick to have upgraded their business-line into class luxury to cater to like wedding, anniversary or religious events, as the consumers are likely to go for high-end jewellery pieces with high-ticket prices
Brands make their presence beyond metros
Understanding the pace of the growing luxury market in the country, Indian brands are taking all that right steps to be make use of the opportunities it offers. The growing demand of the luxury jewellery market has pushed large numbers of high-end jewellers to enter tier 1 and tier 11 cities to set up shop. Not surprisingly, they have been successful in making a mark beyond the metros, a sign of the growing middle class affluence in India. While many leading brands like Reliance, Malabar Gold, Joy Alukkas, Swarovski, Kalyan and many others have set up stand-alone stores across the country, brands like Orra, Cygnus, Gitanjali, Tanishq and others who have taken the franchise route for their expansion programmes.
Future of luxury jewellery market in India
It would not be wrong to say that the Indian luxury market is still at a nascent stage. But with rising purchasing power, evolving lifestyles and growing aspiration for luxury brands by its population, the market has immense potential. More so, with population of over one billion, there is more potential for growth.
The high expectations from the young population in India, whose personal needs differ from earlier days, as they want better quality goods and services. According to a few analysts, India is not necessarily a country big on luxury consumers, compared to other emerging markets like Indonesia due to high custom duties on imported luxury goods. But, it is the fastest-growing luxury market in the context of low-income growth and expansion in high earners. This makes the country an interesting market to watch out, although market watchers warn that such growth is bound to be slow.
According to Euromonitor International’s forecast, India will be the fastest growing market of all emerging markets globally in luxury goods sales between years 2014 and 2018. During this period, the total luxury goods retail value in India is expected to grow by 63 percent, which is ahead of China whose growth is 59 percent. Besides, the increasing disposable incomes and increase in the number of HNWIs will be a key to growth of the luxury market, providing opportunities for luxury goods players in India. So, according to the study, in terms of luxury jewellery market, the India’s tradition for adornment, which goes back to times immemorial; and the country’s growing economic growth coupled with increase in high income earners, will boost the demand for luxury accessories, luxury jewellery and so on, this trend in wealth increase among HNWIs, as well as the current demand pattern is expected to continue well into year 2030.
Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough&Polished
