Indians are traveling more than before—here’s why luxury brands need to tap into this segment

With the Indian middle class gaining greater purchasing power, luxury brands need to start recognising Indians as global luxury consumers

In a recent report by Bain & Company, India's luxury market is projected to expand to 3 .5 times by 2030. The report cites that younger customers and an expanding upper and middle class propel the market. This is unsurprising as India's middle class is fast growing and represents 31 per cent of its population. With this growth comes an increase in disposable income and aspirations, particularly with travel and shopping. A new breed of shoppers is on the rise—one that is well-traveled and is happy to spend money on luxury.

"The most exciting group comprises today's emerging luxury buyers, such as the technocrats—through their Instagram, they are keen to show us that private safari they went on in Masai Mara or the two-Michelin-star meal they enjoyed at La Scène in Paris," says arts professional Rhea Kuruvilla. As young Indians flock to far-flung destinations for their vacations, their Instagram feed is flooded with their latest luxury purchases, be it a full-priced Chanel bag bought after queuing up outside the boutique or a Bottega Veneta double-knot clutch available in various colours at The Bicester Village in England. The Established attempts to understand how the Indian traveler is now a luxury consumer and whether international brands and department stores are recognising this surge among Indians spending on luxury goods abroad. 

Making wise choices

It's worth looking at why Indians prefer spending on luxury goods internationally versus domestically. With import duties touching almost 40 per cent, the prices in India aren't very competitive. "Indian consumers approach spending quite practically, with one striking exception: big fat Indian weddings. When indulging in luxury purchases not tied to an occasion or festival, desire is often postponed and prices compared. Duties are prohibitive, leading to a big price difference between [buying] here and abroad," explains Kuruvilla.

Next up is the inventory, which is often very limited. What is also evolving is consumer tastes and preferences. With the rise of Indian influencers continuously reinventing how people dress in the country and exposure to contemporary labels through social media, the younger generation has become more experimental when it comes to fashion. "The buys are still very limited. The Indian audience is opening up to more eclectic ways, so it doesn't need to be the same old basic and classic style," says influencer Sonam Babani.

Additionally, there are only a handful of brands in the country that are either luxury or bridge-to-luxury. Contemporary labels are rarely found in India except for a few like Le Mill, Ajio Luxe and Tata Cliq, but again, it would be cheaper to purchase these at a department store in Europe than in India. There is the question of international e-tailers—while their offerings are extensive, it is often problematic to order goods to India. Import duties aside, filling out cumbersome KYC forms alongside the possibility of the item getting stuck in customs and returns turning out to be an expensive affair doesn't make it a seamless experience. Additionally, websites like net-a-porter and Matchesfashion don't offer cash-on-delivery options, so for cash-paying customers, international e-tailers aren't an option. 

Travel as a propeller 

In 2022, India surpassed its Asian counterparts like China, South Korea and Japan when it came to outbound travel, according to tourism consultancy IPK International. The top travel destination was the US, and India will soon see two new US consulates opening in Bengaluru and Ahmedabad. By leveraging this increase in Indians' travel abroad alongside their growing disposable income, brands and department stores must be more proactive when recognising the Indian consumer. For instance, The Bicester Collection recently dipped its toes in the Indian market by tying up with a PR agency locally. Between last December and this summer, they collaborated with numerous Indian influencers to promote the shopping experience at their various destinations. "India is a big market for us. It has consistently been a top-performing market, especially at Bicester Village, London and La Vallée Village, Paris. Other markets are also seeing a rise in visits from Indian consumers. This made us realise the importance of increasing awareness around all nine Villages within The Bicester Collection in Europe and the unique day-out experiences they offer," says a spokesperson from The Bicester Collection. Other luxury value retail chains like Woodbury Commons in New York and Foxtown in Switzerland can take note. In fact, Thomas Cook's customised New York holiday tour packages also include a day at Woodbury Commons, further highlighting Indians’ love for shopping abroad.

And it's not always luxury shopping—bridge-to-luxury brands are as important. "There is a whole aspirational class of luxury consumers, young buyers who nibble at luxury. They often enter the market via a bridge-to-luxury brand or a small purchase from an established luxury brand. That sweet spot between international brand recognition and the right price wins this group. They are the luxury consumers of the future," adds Kuruvilla.

Understanding shopping habits

Brands first need to identify who the global Indian luxury buyer is and understand their shopping habits. "The Indian luxury shopper is well-exposed, well-traveled, and is a high spender but is smart about their purchases and is price-conscious. They are looking for quality purchases with a luxurious and personalised shopping experience," says Pooja Advani, luxury advisor and content creator. She also believes that Indians are now at par with their global counterparts in terms of spending, which brands should value. Advani suggests having more Indian SAs in international stores and at higher positions within global brands is a good way to go. It is still rare to see Indian sales associates at luxury stores abroad, whereas Chinese and Russian sales associates are heavily present in more boutiques. "Featuring Indian models in fashion shows and as the faces of luxury brands (actors Deepika Padukone for Louis Vuitton and Alia Bhatt for Gucci, for instance) are other ways to acknowledge that Indians are a focus for the global luxury industry," adds Advani.

Brands also need to tailor their marketing strategies, which means getting an in-depth understanding of Indian culture. "International luxury brands must dive deeper and tailor their approach to Indian consumers accordingly. People constantly make the mistake of assuming that the wide use of the English language in India means Indian consumers are similar to those in the West but that isn’t always the case. They have to adapt to local market tastes and preferences, use international creatives judiciously, and invest time and effort in the right communications," says Kuruvilla. 

Cultural integration would be a good start. For instance, Lladro's Ganesha is widely available irrespective of the country, whereas Bulgari's Mangalsutra is only limited to purchase in India. By restricting cultural collections to a single country, brands might end up ignoring the Indian diaspora. Culturally inspired collections should be available to buy regardless of the country to respect the consumer. Case in point: Multiple luxury labels released collections for the Chinese New Year which can be purchased globally, signifying the importance of the Chinese customer. The same is yet to be said about India. "I was in London recently, and they [Dior] had these beautiful Lady Dior bags from the India collection; I think these will do well globally," adds Babani. Capitalising on Indian festivals, especially Diwali, when people spend even more money, is also a good way to go. Rarely do you see luxury brands' websites releasing collections for the festival outside of India. And even locally, the Diwali edits are limited. 

Going back in time 

Another exciting way is to explore a heritage brand's history with India, as Dior did earlier this year. By holding a fashion show in Mumbai, it amplified its relationship with the country. In the past, when France declared 1985/1986 to be the year of India, Hermes released a line of scarves inspired by India, one of them featuring the goddess Lakshmi all over it. India's love affair with luxury labels can be traced back to the early 20th century when Maharajas commissioned labels such as Cartier, Van Cleef, and Arpels to design ornate jewels. So by looking to the past for the future, luxury labels can strengthen their ties with the Indian consumer and welcome more. 

While India's luxury consumption has still not reached the level of China's, this growing market certainly has potential for luxury brands in the future. The number of HNIs (High Net-worth Individuals) in India in 2020 was over 278,000 and is expected to reach over 611,000 by 2025, according to Statista. And in 2024, India's outbound travel will surpass US$ 42 billion compared to US$22.9 billion in 2019. Many factors contribute to the country's fast-growing middle-class segment, and it can be lucrative for luxury brands internationally. Keeping this in mind, brands can prepare ahead of time for the Indian traveler looking to not only shop abroad but expecting a whole new experience with it. "Indian luxury consumers are well-informed when it comes to luxury. They are open to discovering luxury brands and investing in them as they understand the lasting value they offer," explains The Bicester Collection.

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