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India’s Luxury Market to Triple Over Next 3 Years

India’s luxury market has managed to sustain itself despite 2013’s economic slowdown and experts say the sector is likely to see record high growth in the coming years.

According to a recent paper titled, “Luxury Industry in 2013-14,” released by the Associated Chambers of Commerce and Industry of India (ASSOCHAM), the luxury market brought in $8.5 billion in 2013, a 30 percent increase over the previous year’s $6.5 billion. And that number is expected to cross $14 billion over the next three years.

ASSOCHAM secretary general D.S. Rawat explained the reasons for the sector’s rapid growth saying, “a young demographic profile, growing number of millionaires and billionaires and aspirational integration with the globe are all among the driving factors for the luxury markets which see a big potential in India.” He added that, “since the high-end products and life styles are not price elastic, they don’t get much affected by the slowdown.”

The ASSOCHAM paper broke the luxury sector down by product, including: apparel and accessories, pens, home décor, wines and spirits, jewelry and certain services.

“Luxury jewellery, electronics, SUV cars and fine dining have grown beyond expectations, while apparel accessories, wines and spirits have continued their strong growth in 2013,” ASSOCHAM noted.

Despite this year’s general elections and the likelihood that the country won’t see many economic reforms, ASSOCHAM said 2014 would be a good year for India’s luxury market. The market is expected to surge as a result of increased consumer spending patterns and the craze over branded products among the youth population.

GUCCI, Christian Dior, Louis Vuitton, LVMH India, Canali India and Da Milano Leathers were among brands ASSOCHAM highlighted as significant players who saw positive performance in 2013.

“The combined effects of economic growth, globalization, and the internet/social media diffusion have created a boom in the luxury industry,” Rawat said. “However, as the dominant luxury consumers have changed, their consumption habits are also expected to evolve over time,” he added.