India’s affluent consumers spend more, but retail’s share is shrinking

Subscribe to enjoy similar stories.BENGALURU: Wealthy Indians are spending more overall, but a smaller share of that spending is going to retail stores selling goods like clothing and gadgets.As incomes rise for affluent households, they are increasingly spending on travel, fine dining and curated experiences such as concerts and wellness retreats, even as they continue to purchase high-value premium goods.In response, retailers are accelerating efforts to add experiential formats, from curated in-store services to immersive store environments, as they strive to stay relevant in a consumption landscape increasingly driven by engagement rather than transactions.New data from Visa Consulting & Analytics (VCA), shared with Mint, shows retail’s share of wallet drops from nearly 50% among emerging affluent consumers to about 28% for the ultra-wealthy, as spending on travel and experiences rises sharply.“Affluence is not an absolute state defined by income. It’s defined by how and where people spend.

What we’re seeing is a clear shift from ownership to experiences,” said Sushmit Nath, head of Visa Consulting & Analytics for India and South Asia.That shift is already reshaping physical retail spaces. “Over the past few years, we’ve seen a clear evolution in how entertainment is shaping the modern mall.

Today, the expectation is far more layered, with multiple experiential formats co-existing within the same destination,” said Jayen Naik, president (operations), Nexus Select Malls.The change is visible across categories. While retail’s share is shrinking, absolute spending on premium goods is rising, with affluent consumers trading up across segments.