Not just HNIs: India's middle class and HNI aspirants fuel the luxury market

 
A consensus estimate of the number of high-net-worth individuals (HNIs) in India, after scanning the various reports that are periodically put out, would be 1 million citizens. A recent Knight Frank India study pegged the HNI population—those with an asset value of $1 million (roughly ₹8.3 crore) or more—at close to 0.8 million in 2022. This band of merry moneybags is projected to more than double to 1.65 million in five years.  
 
The 0.8 million figure would make HNIs a tiny fraction of India’s total population of some 1.37 billion. These are the consumers who, the reports tell us, will fuel a boom in luxury: High-end cars, mobile phones, villas in exotic locales, luxe holidays in posh resorts—perhaps all culminating in a Great Indian Destination Wedding; which calls for its own heist of bridal jewellery and apparel.

Now, if you are living in a tony suburb of India’s big cities, look around you—who’s behind the wheel of the bellowing premium SUVs in the backstreets of Lower Parel or Greater Kailash; who are those reserving tables at the cities’ fine dining hotspots; who’s buying modest-sized apartments in towers at prices that would make yesteryear’s jewel thieves blush; and who are those replacing their top-end phones faster than it takes an average Joe to get a Schengen visa (well, almost)?
 
Surely, such splurges can’t be just the handiwork of those 0.8 million-odd worth $1 million or more, right?

If your luxe label is focussed on just this slim sliver of this market, it may be time to put up the shutters. The smarter merchants of luxury don’t have just the HNI in their sights. A bigger opportunity may well be the consumer with HNI-like aspirations. A few of them will turn HNIs themselves, over time.  

These hopefuls—wannabes may be harsh—may be typically millennials and Gen-Z from middle-class families who’ve come into a decent stockpile, thanks to a steady increase in the value of their assets and stable, gradually-rising incomes. Salaries by themselves may be inadequate for the luxe life, but then there’s that seemingly beautiful gift called leverage in the guise of assorted loans and revolving plastic credit.

The hopefuls aspire for what was elusive thus far, and may believe that a higher price tag translates into higher value. It’s this quest for a new status that doesn’t stop some from digging into their savings or resorting to debt—unlike Mr or Ms HNI, who won’t blink twice before picking up an Armani or a Rolex with some side stash.  

This fortnight’s Forbes India edition focuses on all things luxury—for both the arriviste and the already arrived. In the cover story, Pankti Mehta Kadakia delves into the trend of corporations and celeb designers coming together to sell luxury ethic wear. The trigger: Not just HNIs, but a growing middle class with rising disposable incomes. Don’t miss ‘Lehenga In The Boardroom’.

The guys at the top of the pyramid, for their part, may just be looking beyond the material, towards the experiential. How about, for instance, a 27-day global private jet tour packed with cultural immersive elements? For more on that, Darielle Britto’s ‘Around the World, On A Private Jet’.   

Is there a downside to the luxe life? Perhaps, if you’re borrowing and binge buying like there’s no tomorrow. But, of course, there’s a tomorrow (the pay-later part). The larger picture may be of a phenomenon sociologists dub ‘status anxiety’—those of modest means trying to keep up with the opulent Joneses. But let’s keep that for another day.

For now it’s hello, good buys.