Saturday February 18 2006 00:00 IST,PTI
MUMBAI: The Indian customer is spending more on luxury items, whose market is pegged at a whopping Rs 65,000 crore and growing at about 14 per cent a year, a new study reveals.
According to the report by Technopak Advisors Ltd, India currently has 1.6 million households earning over Rs 45 lakh per annum, and each of these households spends about Rs four lakh per annum on such goods and services. The report categorised luxury households and also classified them into four distinct segments.
“While over 1 million luxury households have been slotted as luxuriented, the topmost segment 6-7 million have been termed very affluent, 10 million as getting there and up to 15 million upper middle-class households as mid-affluents,” Technopak Advisors chairman Arvind Singhal said. The research is based on a study that took into account households that earn Rs 40 lakh per annum or more.
The company met 4,000 affluent consumers in 12 cities and covered 17 products and services. Affluence has been defined by car ownership, overseas travel in the last six months and purchase of products in luxury categories.
The categories taken into consideration for the survey included clothing, fashion accessories, timewear, footwear, fragrances, jewellery and digital accessories, furniture and antiques, tableware, collectibles, fine dining and gourment food, wines and liquor, vacation, health and entertainment.
The market opportunity across these categories is estimated at Rs 64,000 crore and is accounted for by categories such as jewellery that has 27 percent of the pie, clothing 16 percent, digital accessories 13 percent, timewear 8 percent and cosmetics and skincare 8 percent.
Technopak’s knowledge company associate director Saloni Nangia said Indian luxury retailing has not taken off due to lack of proper atmosphere. “Organised retailing itself has taken off in India very lately. All the malls have been coming only recently. With more development on in Delhi and Mumbai better retailing atmosphere is being created. This will help in the future growth,” Nangia said.
However, she did not see much contribution of FDI in the segment’s future growth.