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For India’s ultra rich, shopping abroad is passe
NEW DELHI: The super rich in India now prefer to shop at home rather than in Dubai, Singapore or Europe, says a Top of the Pyramid report by Kotak Wealth Management,
NEW DELHI: The super rich in India now prefer to shop at home rather than in Dubai, Singapore or Europe, says a Top of the Pyramid report by Kotak Wealth Management, released on Tuesday.
The report, based on a survey carried out by the wealth manager between January and March, showed that almost six out of 10 ultra high net-worth individuals (HNIs), or people who have a family wealth of over ₹25 crore or annual income of at least ₹3 crore, shop locally with more international brands opening stores here. Jewellery and apparel are their top spends, followed by holidays.
The spike in the wealth and number of ultra rich Indians has prompted luxury brands to expand in India.
For instance, Genesis Luxury Fashion, a subsidiary of Genesis Colors which distributes premium international brands such as Paul Smith, Bottega Veneta, Jimmy Choo and Armani, opened eight new stores across India last year taking its total store count to 47 across the five metros.
“The number of luxury brands and stores has gone up in the last 2-3 years. When (the) ultra rich shop, they are also looking for experience. Earlier, the environment in India was not conducive for them. Now that has changed, allowing them to spend more time on other activities when they are abroad than spending time on shopping,” said Harminder Sahni, founder at Wazir Advisors, a consultancy.
The trend of shopping more at home can also be attributed to the fact that 64% of ultra HNIs are impulsive buyers of apparel and accessories. “Spends on the discretionary fashion portfolio are increasing for both men and women. They are shopping a lot more. If you go to any of the malls such as the Emporio mall in Delhi on the weekend, you see so many high-end cars coming in. These people are not just visiting the food courts. Also, even if they have shopped abroad and they like something in the store here they will go ahead and buy,” said Darshan Mehta, chief executive officer at Reliance Brands.
With more luxury brands entering India, the prices have also come down. Earlier luxury products available in India were as much as 40% more expensive compared to prices overseas. That difference has now come down to “about 10-12%, which is not much. Moreover, in some countries such as Italy, consumers have to give passport details for bills above €1,000. So they may not like doing that,” said Mehta.
“The age of the ultra HNI is going down and many are below the age of 50 and open to smart gadgets and wearables. Earlier, this category didn’t exist. They also see the benefit of using gadgets for their daily needs,” said Murali Balaraman, partner- advisory services at EY, the consulting firm formerly known as Ernst and Young.
