With its High Net Worth (HNW) individuals and Ultra-High Net Worth (UHNW) individuals population set to grow at 11-15 per cent CAGR through 2034, India is emerging as a crucial market to watch with in the global personal luxury goods market.
As per a report by the Boston Consulting Group /(BCG), coupled with a young and brand-savvy consumer base, this rapid wealth growth is elevating India to a significant strategic priority for international luxury brands.
To capitalize on this shift, luxury brands are investing in more localized and customized strategies, emphasizing exclusivity, craftsmanship, and immersive brand experiences. As aspiration increasingly aligns with growing incomes, the Indian luxury consumer is becoming even more pivotal to the industry's future.
The BCG report advocates a fundamental rebalancing of strategy. It urges luxury brands to return to their core values and focus on quality and emotional connection instead of pursuing mass-market expansion. Key recommendations of this report include enhancing client service through high-touch, human-centric experiences supported by generative AI, ensuring vertical control over product quality, and extending luxury into wellness and lifestyle spaces.
Titled, True Luxury Global Consumer Insights 2025, the report reveals, the Global personal luxury goods market is facing an unprecedented period, with projections for 2025 indicating either stagnation or even a decrease – marking its first such downturn in over a decade.
As per the report, a significant divergence is emerging between consumer groups in the market. Having previously dominated nearly 70 per cent of the market, aspirational consumers are now pulling back, their representation dropping by almost 15 percentage points. This shift is attributed to mounting cost pressures and evolving consumption habits. Conversely, a tiny fraction of the global population (less than 0.1 per cent), ultra-high net worth (UHNW) individuals now account for a staggering 23 per cent of total luxury expenditure. These UHNW and HNW consumers are rapidly becoming the primary growth engines for the luxury industry.
Luxury brands that heavily relied on aspirational consumers are starting to feel the pinch, while those catering to high-end clientele remain more resilient. This elite segment, typically spending over $387,950 annually on luxury items, is expanding at nearly 10 per cent per year, with over 900,000 HNWIs globally. However, to attract these affluent customers, luxury brands need to focus on creating deeper, more personalized experiences that foster a profound connection to the brand.
