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Indian Luxury Goods Market to grow by 25% in 2016 Says Assocham Study

Jan 08, 2016

The Indian market for luxury goods is expected to grow from its current level of $14.7 billion to $18.3 billion by end 2016, according to a study conducted by industry body Assocham. This translates into a compound annual growth rate (CAGR) of about 25%, the study revealed.

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.

D S Rawat, Secretary General Assocham identified rise in disposable income, brand awareness amongst the youth and purchasing power of the upper classes in Tier II & III cities as the three main factors that will drive the growth in the sector.

He added that, as per the study the high income group (HIG) consumer segment, which spends over 40% of their monthly income on luxury goods, is growing. The survey revealed that spending on luxury items by this segment has not been impacted by the global economic slowdown. On the other hand, the middle income group (MIG) consumers spend 8-10% of income on luxury products.    

Assocham said that this is in line with the global trends where consumer spending is expected to reach USD 40 trillion by 2020 with an unprecedented growth of USD 12 trillion in a decade.

The study was conducted across multiple cities and indicated that in 2015, Delhi saw the highest spending on luxury brands followed by Mumbai, Ahmedabad, Pune and Bangalore. 

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