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Home > Fashion> Trends > India's luxury market is booming like never before

India's luxury market is booming like never before

With growing economic development, increased internet penetration and purchasing power, consumers seek a personalised approach to luxury

Luxury spending has gradually returned to pre-pandemic levels as customers adjusted to the new normal.
Luxury spending has gradually returned to pre-pandemic levels as customers adjusted to the new normal. (Bloomberg)

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The meaning of and approach towards luxury has changed over time. Luxury today entails more than exclusivity and privilege. It is associated with specific functional and emotional codes such as purposefulness, authenticity, heritage and superior quality. The new world of luxury is now looked at from a holistic lens and is influenced by cultural shifts such as increased accessibility, celebration of conscious consumption, and the inherent value system of brands and its resonance with consumers.  

The pandemic has accelerated the adoption of digital transactions which is growing at twice the rate year on year across industries. Luxury spending has gradually returned to pre-pandemic levels as customers adjusted to the new normal, with a considerable shift in demand to online platforms, which aided the country’s luxury e-commerce boom. In the last two years, e-commerce has bolstered the growth of luxury by expanding its reach and therefore making it more accessible.  

Increased internet penetration, rising purchasing power, growing aspirations, economic development, and other factors have all contributed to the growth of luxury e-commerce in the country. The online availability of luxury brands has given rise to two key sets of Indian luxury consumers apart from the HNWIs: Millennials, who look for youthful, vibrant, and dynamic brands; and non-metro residents, who usually shop for luxury brands during their travels.  

Also Read: Why global luxury market is growing despite war, inflation

Consumers shopping for luxury products seek out a personalised experience, and this holds true even as they shop online. As awareness and availability of luxury brands continues to grow, customers are looking for a “cherished and luxurious online experience”, with a greater focus on relationship building. To provide this elevated luxury shopping experience, e-commerce platforms have introduced various services ranging from luxury packaging to white glove services. The platforms are also innovating by using technology to enhance the overall buying experience and enable personalization.  

With consumers seeking out brands that combine utility with luxury, dynamism and versatility are an emerging theme in luxury today. For example, Louis Vuitton’s miniature perfumes are appropriate for travel, and Kate Spade bags have multiple utilitarian pockets. Luxury consumers also prefer brands that have products serving as a vehicle of self-expression through their designs and mirroring their personal beliefs and value system. In addition to offering prompt service, consumers seek a one-stop platform that not only gives them access to luxury but also educates them through innovative content on new trends, brand and product launches, tips and tricks, and expert recommendations. This is especially true for first-time luxury consumers shopping through an online channel.  

Given this context and the gradual increase in consumer preference towards online shopping, luxury e-commerce platforms are constantly expanding their portfolio and introducing new brands and categories online. In addition to ordering curated luxury brands from the comfort of their home, luxury consumers are also attracted to the wide range of product offerings, including online-only access to niche Indian and global brands. 

When it comes to luxury purchases, some key trends have emerged. While celebrities drive awareness and brand recall, consumers often reach out to their immediate social circle for recommendations and advice on brands to wear and where to purchase them from. A notable trend is that apparel is the most frequently purchased category in the online marketplace followed by beauty, with special offers and promotions increasing the temptation to make purchases. Online purchases of high-value categories such as watches, which are regarded as collector's items, and handbags, which are timeless assets, are also popular. Pre-loved products are an attractive proposition as consumers are now becoming increasingly conscious of their consumption habits. It is a sector that will continue to grow in the luxury e-commerce space. Categories like sneakers and watches are already seeing tremendous growth.  

Another interesting trend that is on the rise is the launch of NFTs and the widespread adoption of crypto as a payment mode by global luxury brands. Gucci, TAG Heuer and Balenciaga are some of the luxury brands that have started accepting cryptocurrency payments and this could encourage other brands to follow suit. 

The luxury of time has allowed the consumer to spend more time on the platform, browsing through numerous categories, brands and products before making the final purchase, indicating a desire to explore more brands. A luxury customer, regardless of category, typically browses two–four distinct brands before making a purchase. 

What's more, while shopping for high-value products such as men’s and women’s watches, handbags, and men’s shoes, the time taken between browsing and purchasing increases as compared to apparel and beauty products. In addition, certain categories such as fragrances and gift sets, beauty and grooming, tea and coffee, and scented candles, usually have search queries related to an occasion such as a wedding, festival, birthday, or gifting purpose.   

While luxury e-commerce has gained momentum in the country and provided increased accessibility to consumers, the leading concern for luxury shoppers is product authenticity. Convenience and product range are the key enablers for online luxury shopping, but it needs to be complemented with proof of authenticity and an experience that is personal and efficient. A customer-centric approach coupled with the right business model will help luxury e-commerce platforms stand out, attract brands, and build a loyal circle of customers. 

Gitanjali Saxena is business head (global luxury), Tata CLiQ Luxury.

Also Read: How South Mumbai has become India’s hub of style and luxury

 

 

  • FIRST PUBLISHED
    22.06.2022 | 07:14 PM IST

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