NEW DELHI: Luxury brand owners could benefit from enhancing their focus on India, where the amount of very affluent households is due to treble in the next three years, new analysis has indicated.
Kotak Wealth Management and CRISIL Research interviewed 150 high net worth individuals, as well as speaking to executives representing high-end brands, art galleries and various manufacturers.
It was estimated that the number of households boasting a value of at least Rs250m now stands at 81,000, a 31% annual increase but still just 0.03% of the total. By 2016/17, this figure should hit 286,000.
Moreover, the combined net worth of this audience was pegged to grow almost five-fold during the same timeframe, expanding from Rs65tr to Rs318tr overall.
At present, a 53.9% majority of extremely affluent individuals are based in Chennai, Delhi, Kolkata and Mumbai. Another 13% live in the next six largest urban centres and 15% reside in a third tier of 40 cities.
When assessing their spending habits over nine product categories, 84% of contributors reported that the economic downturn had not exerted a significant modifying influence.
Jewellery, diamonds and precious stones witnessed the greatest impact, as 27.9% of the panel had changed their behaviour, coming in at 15% for consumer electronics and watches, but only 10.7% for vintage spirits.
Apparel and accessories saw the biggest lift in expenditure last year, ahead of vintage spirits, jewellery, timepieces and electronics. Exclusive holidays, home décor, art and luxury writing instruments found conditions more challenging.
While shoppers from emerging markets often favoured acquiring high-end lines abroad, perceptions in this area were also said to be shifting in India.
Some 73% of the sample preferred buying their luxury goods locally, rising to 83.6% for art and artefacts, 82% for household electronics and 79.6% for jewellery.
Ratings fell to 67% for apparel and accessories and 52.3% for watches, the lowest scores on this metric, according to the analysis.
Breaking out details for luxury automakers, BMW was the car that participants most aspired to own, on 18%, bettering Audi on 14.8% and Mercedes on 12.5%. Toyota, on 7.8%, Honda on 6.3% and Ford on 5.5% all beat Ferrari on 4.7%.
Upon purchasing a new vehicle, 35.5% picked the car they personally liked and 22.7% listened to their spouse. A further 16.9% were influenced by their parents, falling to 12.4% for children and 11.9% for colleagues.
Data sourced from Kotak Wealth Management; additional content by Warc staff