India is emerging as a significant focus for global luxury brands, as the country's population of High Net Worth (HNW) and Ultra High Net Worth (UHNW) individuals is projected to grow at a compound annual growth rate (CAGR) of 11–15% through 2034, according to BCG’s True Luxury Global Consumer Insights 2025.
This comes as the global personal luxury goods market shows signs of slowing, with growth expected to remain flat or slightly negative in 2025. The report identifies a structural shift within the market: aspirational consumers, long considered a key growth driver, are pulling back. Meanwhile, top-tier clients are becoming the main source of spending and value.
BCG’s report is based on a global survey of luxury consumers across multiple income brackets, with a particular focus on high spenders. It outlines that top-tier clients—just 0.1% of the global population—now account for 23% of all luxury spending.
India is not yet comparable to China in terms of luxury consumption, the report notes, but the pace of wealth creation and the increasing affluence of a younger, brand-aware demographic make it a market of interest.
The report states: “As wealth creation accelerates and a young, brand-conscious demographic rises, brands are setting the stage for deeper local engagement.”
Key findings from the report include:
- Decline in aspirational buyers: Once responsible for 70% of the market, aspirational consumers have lost nearly 15 percentage points of share, due to rising affordability concerns.
- Market expansion challenges: The report suggests that luxury’s pursuit of broader market share has impacted its exclusivity, with brands heavily reliant on aspirational buyers now experiencing weaker performance.
- Resilience in top-tier focus: Brands that maintain focus on top-tier clients—who spend on average €355,000 annually on luxury—are more resilient. The report highlights an HNWI base of over 900,000 individuals growing at around 10% per year.
- Spending patterns: While personal luxury remains important, the spending habits of top-tier clients extend into lifestyle and wellness, aligning with what the report describes as a ‘health-as-wealth’ outlook.
- Mismatch between expectation and experience: The report notes a gap between what top clients seek—“connection, intimacy, excellence, recognition”—and what brands offer, which it describes as “a luxury that still feels too noisy, too crowded, too industrialised.”
To address this, the report recommends that brands strengthen direct relationships with top clients, invest in high-quality experiences, and prioritise craftsmanship and product integrity, supported by new technologies such as generative AI.
The report concludes: “Building a stronger luxury industry means returning to what made it exceptional in the first place, especially for top-tier clients: deep connection, quality, and trust with the most valued clients.”
India’s wealth trajectory and demographic profile are expected to make it an increasingly important market in the coming decade, particularly for brands that can align with the evolving preferences of top-tier clients.
