Demand for luxury items in the country is akin to India’s insatiable appetite for gold. A new report has identified that India was the most dynamic luxury market from 2008 to 2013, and is forecast to grow by a further 86% in constant value terms over the next five years to 2018, followed by China at 72%. Though China is whetting the emerging market appetite of the world’s leading luxury goods companies, India has turned out to be the fastest growing market and is predicted to grow by a massive 163% in constant value terms between 2012 and 2017, to reach a value of $7 billion, according to a new Euromonitor study.
As far as product categories are concerned, jewellery has recorded the fastest growth trend across both nations. Among the things that have helped buoy demand for luxury goods in India are thick set gold jewellery pieces, which are all the rage here. Though the country’s appetite for the precious metal was forcibly dimmed with the government’s clampdown on gold imports, stylish and heavy gold jewellery pieces from Italy, Switzerland, Dubai and Thailand have flooded the market, just in time for the festive season.
Retailers said imported jewellery pieces have also come in from Turkey and Hong Kong, which are significantly cheaper than locally made ornaments.
“Though the Indian government hiked the import duty on gold jewellery to 15% from the 10% earlier, to check the inward shipment of gold, and to protect domestic manufacturers, this has opened up the channels for importing luxurious gold jewellery sets from Italy and Switzerland,” said Ketan Bharmal Tanna, a gold retailer.
He added that heavy gold inlaid watches were the current trend, and a matching pair of gold chain, bracelets and watches from Italy for around $63,068 (Rs 3.9 million) were a big hit with the ultra rich party-loving crowd in South Mumbai, a residential area which hosts many billionaires. Among other things, eyewear pieces embedded in a golden frame, wine goblets made in gold, diamonds and other precious stones for a style statement, especially during festive occasions, a growing penchant for customised gold accessories has gripped the nouveau rich and the fashion conscious in India.
Manisha Sathaye, who had visited several outlets at Zaveri Bazaar in Mumbai with her friend, told Mineweb that she was startled at the number of foreign jewellery pieces on offer. “My friend is getting married next month and with Diwali around the corner, we thought we would do some of our shopping this month, when there are several discounts and schemes on offer,” she said.
“Despite the government’s many posturings, the rich and the super rich in India will continue to buy gold. It is considered a symbol of prosperity,” said Bharat Shah, another bullion retailer.
GOLD BUG
In 2013, luxury goods sales are expected to exceed $318 billion worldwide, representing a year on year real value gain of 3%, as compared to a year on year real value gain of over 4% last year, according to the report. Spending is projected to increase by more than 35% over the next five years. The Euromonitor report indicates that, despite the continued macroeconomic uncertainty and sluggish profit reports from major luxury brands, there is an optimistic note to be found in the burgeoning middle class in emerging markets across Latin America, Asia Pacific and Africa.
Analysts say the fortunes of global luxury goods tend to rest mainly on the performance of industry’s fastest growth category: luxury jewellery and timepieces. The study indicates that this category is projected to grow by more than 38% over the next five years to reach a projected real value of $76 billion. With prices of precious metals pushing average unit prices to new highs, especially in India, luxury jewellery and timepieces are set to account for more than 20% of global expenditure on luxury goods by 2017.
The report has also notes that Asia Pacific is set to account for almost 38% of value sales in luxury jewellery and timepieces, growing by an impressive 207% over the 2012-2017 period. The steep trajectory is to predominantly be led by the emerging economies of India and China.
Source: mineweb.com
Source:Bullion Bulletin