Luxury market to cross $18 bn mark in 2016

New Delhi : Increasing brand awareness among the youth and higher purchasing power beyond big cities is likely to boost India's luxury market around 20 per cent to $18.3 billion this year, says a study. The current size of the country's luxury market $14.7 billion, says a Assocham study.

"The factors that have fuelled the luxury industry's growth are the rise in disposable income, brand awareness among the youth and purchasing power of the upper class in Tier II & III cities in India," Assocham Secretary General D S Rawat said.

Five star hotels and fine-dining restaurants, electronic gadgets, luxury personal care items, and the jewellery sector have performed well in the year 2015 and are expected to grow by 30-35 per cent over the next three years, the study noted.

Big ticket spends on items like luxury cars mainly in the SUV section is likely to continue, with an estimated growth projected at 18-20 per cent over the next three years, driven by consumption in smaller towns and cities, the study added.

Moreover, with the luxury market expected to grow at over 25% year on year, Private Equity investments (PE) in the respective segment is expected to increase and support the enhanced size of the Indian luxury market.

The study segregated the luxury sector into product categories like apparel and accessories, pens, home decor, watches, wines & spirits and jewellery, services like spas, concierge service, travel & tourism, fine dining and hotels and assets including yachts, fine art and automobiles.

The high Internet penetration across tier-II and tier-III cities along with more disposable income shall lead to approximately 100 million transactions through the Internet by 2020.