According to NCAER (National Council of Applied Economic Research), India’s middle-class population was over 267 million in 2016 and is likely to be more than double by 2026.
Another research from Brookings Institution USA, Asia could be representing 2/3rd of the middle-class population worldwide with close to 380 million from India by 2030. Compared to the western economies, China and India have been growing with an annual growth rate of over 6% resulting in a huge market potential for these emerging economies.
Here are 10 trends to understand the consumers from Middle-class segment towards Luxury products :
The Middle-class in India has always preferred affordable luxury because of the compulsive behaviour of comparing various products based on cost and quality. A luxury brand targeting Indian middle-class segment should always keep in mind that there should be variety of entry-level products.
According to Euromonitor International, the affordable luxury segment has been rapidly growing at the rate of over 40% per annum, embracing on top among other segments. Considering the brand-conscious Indian clientele, brands like Kate Spade, Michael Kors, Coach and Charles & Keith have been able to offer affordable premium products to curb the emerging customers with increasing disposable income who aspire the luxury lifestyle.
Affordable luxury primarily works on hospitality.
An interesting innovation is something which will attract everyone in the society. Majority of Indian middle-class wants to be the center of attraction and is ready to spend any amount of money for these innovative products.
Innovation primarily works on Luxury gadgets and Automotive.
What aspects of luxury they buy more?
After studying & surveying hundreds of middle-class families across India. Frequently bought luxury products and services ranked sector wise are listed below:
- Luxury Cosmetics and Fragrances
- Luxury Hospitality & Tourism
- Luxury Gadgets
- Luxury Fashion
- Luxury Automotive
– As Cosmetics & Fragrances are the entry level products, people find it a more affordable option that gets them close to the aspired position that they want to achieve in the luxury landscape.
– With the growing expenditure in the tourism by the domestic and foreign audiences, Hospitality & Tourism sector ranks the second in the buying preferences of the consumers in India.
– The advent of globalisation with the addition of influential content from social media, the tech world has been a growing market where the consumers in India are discovering new gadgets every day that include both personal and home category.
– The fashion market has been growing well with the new connected consumer who is all synced with the latest global trends in fashion apparels.
– The automotive sector has picked up the growth pattern from the second quarter of 2018 led by the ease of procuring a car through easy payment option for the middle- upper class of consumers.
While studying the purchase trends in Luxury across India, North-Indian states like Delhi, Punjab, Haryana, Uttar-Pradesh and Rajasthan were noted to be more indulged in strong show-off culture. The need to buy a luxury segment car is usually fuelled by the need of conspicuous consumption among the buyers in this demographic area of the market and the desire to appear more superior & powerful in the society.
The northern states are the highest consumers in terms of luxury in India with over 40% share followed by South India which is 25%.
Education about product details
70% of people from the middle class in the country don’t possess the technical knowledge of luxury products. Author collected this information after interviewing numerous sales executives from premium brands.
During these interviews, one of the sales executives from a premium leather fashion brand gave an example that many of the customers cannot differentiate between calf and goat leather and are completely confused with the detailing.
It is imperative that the quality, uniqueness & rarity of the product is rightly put across to the customer which in-turn will increase the demand and importance.
Scarcity works for every consumer class and hence is an important constituent in the market that favours the brands.
Influence of Bollywood trends
Indian middle-class is extremely influenced by Bollywood. Majority of middle-class people spend their weekends watching cinema, which plays a huge role in their lives as a trendsetter because people want to adopt the lifestyle played by their favourite on-screen actors.
This automatically generates the demand of luxury products & services shown in the movies and Punjabi music videos used by their favourite stars.
Another related platform that people follow to look-up for new trends in luxury are the award shows. This is where every film-star will walk in designer clothing and are driven in a luxury ride to such events.
Power of Logo on a product
India ranks number one when it comes to buying products with luxury logos. Wearing a luxury brand with a logo boosts the image of the person silently and illustrates his/her status in the society.
Made in Europe
In the Indian middle-class market, luxury buyers are ready to buy products which are made in Europe over Indian manufactured goods. This is because of their belief that the quality of European goods is far better than Indian goods and they are ready to pay a price on a higher side for the quality.
Special Treatment = Brand Promotion
Indian middle-class has a very strong way of promotion i.e. word of mouth. If a customer leaves the showroom happily, he/she will of course spread a good word across in his/her society.
For instance, special attention provided or a gift or greeting card is presented to the customer. These small gestures make a big difference when it comes to Indian middle class.