A new report has revealed the existence of “closet consumers” in India, who look set to fuel the growth of the country’s luxury market over the next few years.
India has enjoyed strong economic growth over the past decade, propelling many of its citizens from “comfortably off” to wealthy. However, the report from the Confederation of Indian Industry and market researchers IMRB International, titled The Changing Face of Luxury In India, found that a middle-class mindset towards consumption prevails among these newly rich Indian citizens.
Dubbed “closet consumers”, these shoppers are price-conscious and seek value even when buying luxury products. The report splits them into four distinct segments:
"Typically, these are people who have not been born wealthy, and luxury is not a way of life yet – they are just experimenting with luxury," Sushmita Balasubramaniam, vice-president of IMRB's Retail Business Unit, told UK paper the Financial Times.
The luxury market in India was worth around $7.58bn in 2012, and currently accounts for between 1-2% of the global luxury market. However, growth is set to soar in the next decade as more middle-class consumers join the ranks of the wealthy. Luxury products such as watches and handbags are the fastest-growing category, enjoying a 22% growth rate over the past four years.
For more on the rise of the middle-class consumer in BRIC (Brazil, Russia, India and China) nations, take a look at our Macro Trend Unlocking New Worlds. For insights into the changing shape of the luxury market, see The New Luxury Consumer and Luxury: 2013 and Beyond.