With its vast population and expanding economy, India is the fastest growing Globe Shopper is a term coined by Global Blue to describe fo... More nationality in South East Asia. What is fueling this growth and how can European retailers realise its potential?
Currently accounting for a modest 1-2% of total spend on global luxury goods, India is increasingly proving its position as a critical Globe Shopper is a term coined by Global Blue to describe fo... More market and an opportunity impossible for international luxury brands to ignore.
According to Global Blue data, Indian Globe Shopper is a term coined by Global Blue to describe fo... More spend increased by +23% during 2017, with destinations including the UK (+30%), Italy (+21%) and Switzerland (+30%) experiencing the largest advance.
In addition, 15% of transactions by Indian Globe Shoppers were over €5,000, in comparison to 5% of Chinese, and frequent Indian Globe Shoppers spent an average of €3,400 during the year in comparison to a global average of €2,460.
What will drive continued growth in India’s global luxury spend?
A number of factors are fuelling India’s global luxury goods consumption:
- Rising incomes: Rising incomes are starting to benefit wider masses of the population, rather than only the educated and elite. As a result of increased spending from the middle classes and affluent working classes (described as the “urban mass”), the Boston Consulting Group predicts that India will be the world’s third-largest consumer market by 2025.
Meanwhile the rich list does continue to grow; around 500 new ultra-high-net-worth individuals (those with investable assets of at least $30 million) have emerged each year in India over the past decade. Over the next 10 years, that number is predicted to double to approximately 1,000 per year.
- Increased relevance of luxury brands: While the Chinese luxury buyer is highly aware of international brands, India has not yet demonstrated this massive demand and brand awareness emanating from travel.
However, Indian consumers are starting to demonstrate a stronger preference towards international luxury fashion brands. Their exposure to these brands is becoming more pronounced through increased internet consumption (set to reach 500 million by June 2018) and with several major luxury players (including Ermenegildo Zegna and Longchamp) recently joining or expanding their presence in the country.
In addition, India’s ethnic brands are making a name for themselves in the global luxury circles; Titan, Gitanjali and PC Jewellers have all recently risen to the top 50 luxury brands globally.
- A growing and motivated youth market: With Millennials projected to account for 40% of the global market for personal luxury goods by 2025, India’s rising tide of style-conscious, brand-savvy young consumers is set to propel its expenditure into new highs. At 440 million Millennials and 390 million Gen Z, they outnumber even China’s young people.
The opulent wedding industry
Estimated at $50 billion, the Indian wedding market monopolises its luxury spending and presents a huge opportunity for international brands, particularly when it comes to watches & jewellery and fashion & clothing. Global Blue January 2018 data, showed spending by Indian Globe Shoppers in these two categories grew by +50% (watches and jewellery) and +19% (fashion & clothing) year-on-year in Europe.
Attracting Indian Globe Shoppers to European stores
India’s emerging consumer market is a diverse and complex one. Retailers looking to attract the Indian Globe Shopper is a term coined by Global Blue to describe fo... More to their European stores should take care to understand their different profiles and behaviours in order to best market to them.
Digital communication and social media presence provides a vital opportunity for those looking to engage and capitalise on the youth market. Digital influence on purchase decisions is growing in India; currently about 70% of those who have access to the internet go online to make informed purchase decisions.
Finally, with strict measures introduced by the Indian government in 2016 (including a tax on luxury goods) Indian consumers, typically more value conscious than their Chinese counterparts, are increasingly looking beyond India’s borders to get the best deal. Luxury brands should take advantage of opportunities to offer their Indian customers savings, for example with Global Blue’s A number of countries offer VAT/GST refunds to international... More scheme.