Premiumization in India: Unlocking investment opportunities
consumer behaviour, presenting a wealth of opportunities for investors.
Consider the automotive industry: 60% of car registrations in India in FY24 have been SUVs, highlighting a preference for higher-end vehicles offering status and comfort. In the two-wheeler segment, growth is driven by demand for power bikes Similarly, metropolitan real estate markets, particularly in Mumbai, NCR, Bangalore, and Chennai show a rise in demand for luxury properties India's luxury housing market is thriving, as it recorded a 10 per cent year-on-year (Y-o-Y) growth in sales during the first quarter (Q1) of 2024.
The travel industry has adapted, with sustained demand for corporate and leisure travel prioritizing superior experiences, evident in the expansion of the hospitality sector's luxury services The banking sector follows suit, with unprecedented growth in high-end programs in Wealth Management, driving profitability by courting high-net-worth individuals (HNI). Across industries, FY24 results show profitability growth outpacing revenue growth, driven by premiumization. For investors, this presents an opportunity to focus on high-growth sectors poised to benefit from this transformative shift.
From Necessity to Desire: The Cultural Shift
Historically, Indian consumers have been cautious spenders, prioritizing savings and essential purchases. However, with increasing disposable incomes, there's a noticeable shift towards discretionary spending. The cultural mindset has evolved from «Can I afford this?» to «I deserve this.»
