India's luxury market bucked the lingering economic slowdown and swelled to $8.5 billion in 2013 as savvy consumers continued to open their purses on high-end products and services, an Assocham study found.
"Be it a family holiday to exotic locations in Europe or US, sporting branded jewellery, driving around in top-end SUVs, going out for a fine dining in five star hotels, India's luxury life style market has remained largely affected by the economic slowdown in 2013," Assocham Secretary General D S Rawat said.
He reasoned that a young demographic profile, increasing number of millionaires and aspirational integration with the globe are all among the driving factors for the luxury markets in India. Since high-end products and lifestyles are not price elastic, they are not much affected by the slowdown.
According to the study, the luxury market in India witnessed a growth rate of 30 per cent in 2013. The segment stood at USD 6.5 billion in 2012 and is estimated to cross USD 14 billion mark during the course of the next three years.
Sectors such as five star hotels and fine-dining, electronic gadgets, luxury personal care, and jewellery performed well in the year of 2013 and are expected to grow by 30-35 per cent over the next three years, the study revealed.
Besides, big ticket spends on luxury cars are likely to continue, growing by 15-20 per cent over the next three years, driven by consumption in smaller towns and cities, it said.
The study divided the luxury sector into various categories including apparel and accessories; pens; home décor; watches; wines & spirits; jewellery; services like spas, concierge service, travel & tourism, fine dining and hotels; and assets like yachts, fine art, automobiles.
The study further said that 2014 will be a good year for the Indian luxury market despite the upcoming general elections, even though not many economic reforms may be introduced.