In recent years, there has been plenty of talk about India growing into a big market for luxury brands. The recent Mint Luxury Conference 2011 in Mumbai raised several questions about India’s growth potential within the luxury sector. With “Triggers for Growth” as the theme, invitees to the conference discussed the various infrastructure issues that pose hurdles to the growth of the luxury business in the country. Take the example of luxury yachts. Rich people across the world buy yachts, because they are the ultimate thing in luxury. Plus, they work out as great investments too. However, yacht ownership hasn’t really taken off in India. The main obstacle is the lack of high-quality marinas.
A similar issue plagues the sale of luxury cars. An Audi executive revealed at the Mumbai conference that while China buys some 250,000 Audis, India purchases only a few thousand. The poor condition of roads is a major reason why Indians stay away from top-end vehicles.
One must also consider that India continues to battle poverty, the security system is faulty and luxury brands are charged higher duties in India than abroad. The last factor is instrumental in persuading wealthy Indians to purchase luxury goods overseas instead. Plus, India is currently home to only three luxury malls. Lack of access to luxury goods also inhibits sales.
However, the luxury industry continues to expect growth from the Indian sector, though at a slower rate than in China. According to estimates, the luxury market in India should grow to $30 billion by 2025.
Via: The Wall Street Journal