NEW DELHI: The luxury goods market is set to enjoy substantial growth in India over the next five years, and is also expected to attract further investment from major global brands over this period.
According to figures from Technopak Advisors, the consultancy, the premium goods industry in the Asian nation is currently worth around $3 billion (€2.2bn; £2.0bn) a year.
Looking forward, the company predicted that this total will expand by between 25% and 30% on an annual basis from 2010 to 2015.
Rising levels of wealth, improved retail opportunities and the heightened appeal of "aspirational" products will be the primary contributors to this trend, it added.
"Brands from the western world have been eyeing the Indian market for quite some time, mainly for two reasons," said Arvind Singhal, the chairman of Technopak.
"First, India has the fastest-growing population of millionaires in the world. Second, brands are starting to focus on new pockets like India, where a multitude of cultures, languages, festivals and tastes give it a flamboyant nature."
Armani, Burberry, Noraletto and Raymond Wiel are among the high-end specialists that have established a presence in India, albeit through joint ventures, as required by government regulations.
Cartier, the jeweller and watchmaker, entered the country in 2008, and has recently announced plans to increase the size of its distribution network.
"India is a very important region and its culture, very influential in art and jewellery. The country is very promising and we are looking to further expand our distribution network," said Louis Ferla, managing director of the French firm's local arm.
While agreeing with Singhal's assessment that the rapidly-developing nation is one of the "fastest-growing millionaires' economies," Ferla also sounded a note of caution.
"Consumers have started recognising the need for luxury goods and services," he said. "However, the luxury market in India is still in its nascent stage and requires careful strategies to enter and sustain."
Last year, Bain & Co forecast sales in the Indian premium goods segment would climb by 25% a year going forward, albeit from a low base, as the country delivers just 0.4% of global returns at present.
McKinsey has also previously reported that there are some 1.5 million households in the country which can realistically afford to make this kind of purchase.
Data sourced from Business Standard; additional content by Warc staff