Luxury now Rs 65,000 cr business

1.6 million households spend Rs 4 lakh a year on uber brands.

Here is good news for those looking for a fix on the luxury market in India: According to a report released by Technopak's The Knowledge Company here today, the current market size of luxury-very premium goods and services is Rs 65,000 crore and is growing at about 14 per cent every year.

India currently has 1.6 million households earning over Rs 45 lakh per annum, and each of these households spends about Rs 4 lakh per annum on such goods and services.

Announcing the findings, Arvind Singhal, chairman, Technopak Advisors Ltd, said the report had not just categorised luxury households but had given a size of each of the 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".

The research is based on a study carried out by taking into account households that earn Rs 40 lakh per annum or more.

"This was done by looking into the actual earnings by executives in each industry segment. We did not go by the usual method that takes into count income tax," said Singhal.

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 considered for this included clothing, fashion accessories, timewear, footwear, fragrances, jewellery, digital accessories and consumer durables, intimate wear, furniture, art and antiques, tableware, collectibles, fine dining and gourmet food, wines and liquor, holiday and vacation, and 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 per cent of the pie, clothing 16 per cent, digital accessories 13 per cent, timewear 8 per cent and cosmetics and skincare 8 per cent.

Interestingly, however, all this points to the real question: Are these consumers reaching out for Gucci, Cartier and Louis Vuitton among other glamorous brands? Not really, it appears.

According to the report, their priorities are different and set on housing, travel, education, higher-end automobiles, entertainment electronics and other home lifestyle improvement products.

Meanwhile, Singhal said the holding company (Technopak Advisors Ltd) has created under it different entities with the largest being Technopak Consulting followed by The Knowledge Company, which will be responsible for gathering market intelligence. The other divisions will be The Brand Company and The People Company.