New Delhi, July 24 India's High-Net-Worth and Ultra-High-Net-Worth (HNW and UHNW) population is set to grow at 11–15 per cent CAGR through 2034, fast becoming a must-watch market for global luxury companies, a report said on Thursday.
As wealth creation accelerates and a young, brand-conscious demographic rises, brands are setting the stage for deeper local engagement, Boston Consulting Group said in its latest report.
The future of luxury lies in re-focusing on craftsmanship, personalisation and intimate experiences -- especially in emerging markets like India, where aspiration is increasingly backed by affluence, the report emphasised.
However, the report also revealed a fundamental shift in the luxury market.
For the first time in more than a decade, the 'Personal Luxury Goods Market' is experiencing a slowdown in growth, with flat to slightly negative performance expected in 2025.
The aspirational consumers — the entry point for many into luxury — are pulling back, while top-tier clients are confirmed to become the key engine for long-term value, the report highlighted.
"The global luxury market is at an inflexion point — while aspirational consumers pull back, top-tier clients, who make up just 0.1 per cent of the population, are driving 23 per cent of all luxury spend," according to the report.
Aspirational buyers have slipped away, who were once accounting for 70 per cent of the luxury market.
They have lost almost 15 percentage points in share as affordability concerns rise, the report noted.
As per the report, luxury was once the realm of the few, but in the race for scale, much of the industry lost its soul and traded exclusivity for reach and stability.
The most resilient brands are those focused on top-tier clients - clients that spend on average 355 euros per year on luxury and build on an underlying HNWI audience of over 900,000 individuals growing around 10 per cent annually.
Building a stronger luxury industry means returning to what made it exceptional in the first place, especially for top-tier clients, the report highlighted.
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