India’s $7.58-billion luxury market, which grew 15% in the last three years, is witnessing a shift in trend with the emergence of ‘closet consumers’.
These are consumers who are not only cost-conscious but also look at the value while shopping for high-end products, a report prepared by industry body Confederation of Indian Industry (CII) and IMRB International said.
“The inner conflict between a middle-class mindset and the globally rich income level, between conspicuous consumption and a level of luxury, which is a reward for hard work shapes what we call the closet consumer,” the report titled ‘The Changing Face of Luxury in India’ pointed out.
Such consumers’ definitions, symbols of luxury are often at variance with conventional definitions and symbols.
The report divides closet consumer into four segments — connoisseurs, experientialists, aesthetes and flaunters.
The report said that the growth in the luxury market was due to robust growth in the luxury categories such as apparel and accessories, perfumes, fine dining and automotive.
The report also pointed out that the Indian luxury market accounts for a mere 1-2% of the global luxury market. Multiple factors have contributed to the slow growth in the sector, which includes low-priority status assigned to luxuries by the government, lack of adequate range of luxury products apart from the fact that Indian culture dissuades people from flaunting wealth.
The report, however, said that these are expected to change in the coming years.
“The luxury market will boom in India over the next few years,” the report said.
Luxury products in the recent past have grown by about 22%, compared with luxury services which showed a 15% growth and luxury assets at a 9.4%, primarily due to slow growth in luxury real estate.