Sales of luxury brands such as Louis Vuitton, Christian Dior, and Hermes soared as affluent Indians increased their spending on high-end products, amassing ₹1,400 crore in sales for the fiscal year ending March 2024. Despite lower frequency of purchases, consumers are opting for more expensive items. Overall, the outlook for India’s luxury goods market remains optimistic, with projections of substantial growth by 2030, supported by rising incomes and a younger population.
Affluent Indians continue to increase their spending on luxury goods, spurring significant sales growth for internationally renowned brands in the face of economic slowdowns in other markets, particularly China. According to filings accessed via Tofler, in the fiscal year ending March 2024, Louis Vuitton, Christian Dior, and Hermes collectively achieved sales worth ₹1,400 crore, yielding nearly two-thirds of the Swiss watch industry’s total sales in India, which amounted to ₹2,074.8 crore earlier this year.
Raahuul Kapoor, founder of Luxury Ampersand Frolics, noted that while consumers are purchasing luxury items less frequently, they are opting for higher-value products. The luxury sector has benefited from both increased consumption and price hikes instituted by brands. After the pandemic, demand for upscale homes and designer clothing surged among wealthy Indians, even as inflation compelled many consumers to scale back expenses.
Management consultants Deloitte India project that the luxury goods market in India will grow from approximately $17 billion in 2024 to around $30 billion by 2030. Notably, FY24 saw Louis Vuitton India Retail’s operational income increase to ₹811.6 crore, with profit also rising to ₹149 crore, marking a 13% growth.
Christian Dior Trading India experienced a 45% surge in operational revenue to ₹265.71 crore while its profits also increased by the same percentage. Hermes India recorded sales of luxury goods valued at ₹316 crore, up 27% from the previous fiscal year, with net profits rising to ₹72.73 crore.
Despite the overall success reported, certain luxury brands have not fared as well. Reliance Brands Ltd reported an increase in revenue but also a widening of its losses. Various luxury brands managed by Reliance, including Diesel Fashion India and Paul & Shark, saw limited profitability despite higher sales figures.
The first half of FY25 has presented challenges for the luxury segment, influenced by high summer temperatures, ongoing elections, and weakened consumer sentiment. Nonetheless, experts anticipate a recovery in the second half of the year, hoping that the festive and wedding seasons will bolster sales.
Italian luxury shoemaker Santoni expects growth of 10% in the final quarter of the year, benefiting from like-for-like sales and inflation driven by currency depreciation. According to co-founder Sanjay Kataria, sales figures for October and November reflect a considerable improvement compared to the preceding year; thus, the market outlook remains optimistic in the face of challenges.
The article explores the robust performance of luxury brands in India amidst global economic challenges, particularly in other major markets like China. Despite a general pullback in consumer spending due to inflation, high-net-worth individuals in India have increasingly turned their focus toward luxury purchases. The growth trajectory of India’s luxury goods market is highlighted, with projections for significant expansion over the next several years, tapping into changing demographics and rising disposable incomes. Overall, the narrative reflects a complex interplay of market dynamics, consumer behavior, and inflationary pressures affecting luxury retail in India.
In conclusion, despite economic headwinds and fluctuating consumer sentiment, the Indian luxury goods market maintains a positive growth trajectory bolstered by affluent consumers who are shifting their purchasing behavior toward higher-value items. Projections indicate a promising future as this segment is expected to continue expanding significantly by 2030. Industry experts remain optimistic about the recovery in the second half of FY25, aided by festive spending and potential rebounds in luxury shopping.
Original Source: www.livemint.com
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