If there’s one sector that has performed better than expected in these past couple of years, it is the Indian luxury market. Pandemic or otherwise, the country’s luxury market could easily sustain this growth over the next decade owing to multiple factors including economic development, Internet penetration, policy reforms, growing middle-class population and soaring aspirations in the hyper-connected metaverse.
The size of the Indian luxury market is projected to surpass $200 billion by 2030. According to Statista, revenue in the Indian luxury goods market amounted to $5.94 billion in 2021. The market is expected to grow annually by 8.03% (CAGR 2021-25). Although the covid scenario has made it hard to predict anything with certainty, it is estimated that India’s economic growth will be in the range of 7.5-8.5%, sustained over the next decade.
Also read: Why the big luxury fashion crisis could be a good thing
All that shines
The past two years not only halted and curtailed activities, but affected the health and livelihood of millions of people around the world. It was a watershed moment for all of us.
We braced ourselves for the worst, we unlearnt our old ways, and adopted new methods to not only sustain but bounce back. Who would have believed this time last year that today we’d be in the midst of a global economic upswing? According to the World Economic Outlook, the International Monetary Fund has forecast a 3.5% global economic growth as against 3.6% in 2018.
The Indian jewellery market has performed beyond expectations and the sales figures of most companies have outshined pre-pandemic levels.
I believe the game changer was the power of radical and agile thinking. We were not just nudged, but forced to think differently. We saw the mass migration of karigars to their hometowns, factories were shut down, supply and demand was squeezed, and above all, the health and safety of people associated with the industry became a great concern.
The industry unitedly decided to temporarily halt importing rough diamonds as it would have exerted pressure on the diamond pipeline. Thanks to the stimulus packages and exemptions offered by the government, the industry limped back by mid-2020.
What spurred the latent buying spree? Subdued festivities and reduced guest lists at weddings left people with more cash on hand, which was channelled into jewellery buying. In the face of uncertainties, people, who were stuck at home, realised the value of family and relationships and celebrated each other by gifting jewellery. Self-gifting was another segment that propelled sales. Jewellery, most realised, was one luxury product that had a lasting intrinsic value.
What lies ahead
In the age of social distancing, online sales of luxury products soared like never before. According to estimates, the Indian online jewellery market is projected to grow to $3.7 billion by 2025 from $850 million in 2019.
The changing fashion rules and mindset of new-age consumers have driven manufacturers to develop pret and minimalist jewellery. Adornment is no longer about defining one’s status, but about an indication of personal choices for today’s individualistic generation. Aided by superior laser and 3D technology, manufacturers are creating designer but understated pret and lightweight gold jewellery with personalised messages.
The outlook for diamonds (white and fancy colour) remains high. Handcrafted jewellery in silver or gold-plated silver, with a global aesthetic, is another segment that is outpacing all others—one, many fine jewellery boutiques are tying up with upcoming designers to promote online sales of affordable lines.
Multiple branding is no longer a taboo for fine jewellery retailers. Established brands are inviting global and domestic designers under their roof for optimising use of retail space and more importantly, driving consumer traffic to experience the vast choice offered by the store.
Colin Shah is the chairperson of Gem & Jewellery Export Promotion Council India.
Also read: You promised to be a conscious shopper. Then what happened?