Super rich Indians prefer shopping in India, says study

A report released by Kotak Wealth Management titled ‘Top of the Pyramid’ brings to the fore the new trend of super rich preferring to shop in India instead of travelling to Dubai, Singapore or Europe. Almost six out of 10 ultra high-net worth individuals or people who have a family wealth of over Rs 25 crore or annual income of at least Rs 3 crore, now prefer to shop in India. The boom in the luxury market with luxury brands and luxury malls opening up, there is a lot of option in India today. From Stefano Ricci to Boss, Gucci to Paul Smith the brands are all available in India now. And HNI’s are more than willing splurge on them and what better way if they are available at a mall near them.

The top spends are on jewellery and apparel followed by travel. As per the report, the combined wealth of the ultra high-net worth households is set to increase almost two-and-a-half times to Rs 319 trillion by fiscal 2021. The super rich population grew 7 per cent to 146,600.

More brands, more buyers

In the last two-three years, the number of luxury brands setting up shop in India have gone up. For instance, Genesis Luxury Fashion opened eight new stores across India last year, taking its store count to 47 across the five metros. It also launched Coach, a bridge to luxury accessories brand known for its handbags, in Mumbai last year. Also, with more brands coming in, the prices of the products have fallen. Earlier, luxury products in India were at least 40 per cent more expensive compared to prices overseas. The difference has now come down to about 10-12 per cent. And more importantly, as Harminder Sahni, Founder, Wazir Advisors points out that earlier the shopping environment in India was not so great for the super rich to shop but now with luxury malls opening, they can have the same experience as overseas.

Technology brings a new segment to splurge

With technology and innovation becoming a part of our lives, a new segment has emerged for the super rich to spend on, which is the wearables. As per the report 57 per cent of super rich use wearable devices. Also, no longer are the super rich old and in poor health. The age for the ultra high net worth individual today is 50 and above. So, this age group is open to latest gizmos and wearable devices. Earlier this category was not there but now it is growing. The super rich use wearables and smart gadgets on a daily basis too.

The luxury market in India is expected to expand fivefold in the next three years and the number of millionaires is expected to multiply three times in another five years. The luxury market in India has been growing at a CAGR of 25 per cent over the last couple of years.

The Kotak Wealth Management survey polled 225 ultra high net worth individuals across 12 cities in India. The survey was carried out by the wealth manager between January and March.

Photo caption: Hrithik Roshan wearing Stefano Ricci