Happy with her purchase of a Gucci 100 wallet in beige and green, Kapoor’s next stop is the Montblanc store on the first floor where she wants to pick up a wallet from its ‘Mix Tapes’ collection for her husband. The wallet is sold out, and she settles for a card case from the collection. Is Kapoor shopping for an occasion? “Just a treat for myself and my husband since we haven’t bought anything nice for over a year,” she says. “[Our] birthdays and anniversary were during the lockdown. I think I will now shop whenever I like something and not necessarily wait for an occasion.” This overriding emotion is a common factor driving the luxury shopper to the billing counter.

“There is almost 100 per cent conversion. If you have waited to enter a store, you have probably made up your mind on what to buy,” says Pushpa Bector, Executive Director of DLF Retail, adding that footfalls are back to 80-85 per cent of pre-pandemic levels. So, has the luxury goods market made a comeback? “Yes, I would say so. International luxury brands are doing sales of 50-60 per cent over their 2019-20 numbers,” she says.

That might be an optimistic overestimate, but the fact is that growth is back after a year of pandemic-induced mayhem. In 2020, India’s luxury goods market plunged 33 per cent to $5 billion, according to data from Euromonitor International (see Future Prospects). In 2021, this will likely grow to $6 billion, and will see consistent rise over the coming years. However, it’s only in 2023 that the market size will return to 2019 levels. That’s a four-year jolt for the industry, but still, no one’s complaining. Not with the return of the shopper.

Walk-ins for The Collective, one of the largest multi-brand luxury retailers from the Aditya Birla Group with nine stores across the country, are at 80-85 per cent of pre-pandemic levels, according to Amit Pande, Brand Head. E-commerce numbers for the company have grown three times and are helping add 20-30 per cent more customers every month. Darshan Mehta, Managing Director and CEO of Reliance Brands, says the online business of the company has doubled to 25-30 per cent of all sales from 10-12 per cent pre-Covid-19. “We think of ourselves as a digital-first company,” says Mehta, adding that distance-selling has also gone up 7-8 per cent compared to zero earlier. With nearly 70 international luxury brands in its kitty, the company is India’s No. 1 luxury goods seller.

“Brands are also creating excitement, launching new collections. I am quite bullish that things will look up from here,” says Neelesh Hundekari, Partner and Head, Lifestyle Practice, Asia-Pacific, Kearney, a management consulting firm. Adds Abhay Gupta, Founder and CEO of Luxury Connect, a brand management firm: “Globally, luxury is back to 2019 levels. India is also following the trend.”

With the festive and wedding season coming up, there is new-found hope in the market. “My expectation is that in the October-January period, Indians will get married in large numbers but with a small crowd. A lot of money will be spent in ‘upgrading gifts’,” says Mehta. That has made jewellers a happy lot. Titan, which has jewellery brands Tanishq and Zoya, has reported a year-on-year growth of 78 per cent for jewellery. In India, De Beers Forevermark expects to perform 12-15 per cent higher in 2021 compared to its best year, 2019. “While during the pandemic, weddings have become smaller in terms of the number of guests [200 maximum], wedding budgets have not gone down,” says Sachin Jain, Managing Director of De Beers India. “So, the percentage being spent on gems and jewellery has gone up.” As per a jewellery industry analysis, the market size of the Indian jewellery industry is expected to grow to over $100 billion by 2023 compared to $65 billion in 2019.

Then, destination weddings are on the upswing. The Leela Palace, Jaipur, for instance, is sold out on all wedding dates for the next few months. DLF Emporio is launching a wedding concierge service to provide end-to-end services to the bride. “People are enjoying the intimacy of the event. It could well become a millennial trend now,” says Bector.

Another factor leading to increased purchases in India is the restriction on international travel. According to Hundekari, Indians purchase almost 30 per cent of their luxury goods abroad. Now a percentage of that is being bought in India. “I would call it trapped buying. Consumers have nowhere else to go,” says Mehta. Bector adds that brands have reached out to customers who shopped abroad and connected with them. “You provide them a personalised experience and they will shop with you in the future, too,” she says.

Restricted travel has also meant that people haven’t been able to shop for duty-free liquor. This has led to an increase in domestic sales. Ipsita Das, Managing Director, Moët Hennessy India, says that between 2020 and 2021, sales have grown 2X. “Premiumisation is driving this uptick. People are celebrating in smaller gatherings. Since consumption is in closer knit groups, they are not compromising on the quality of liquor, leading to premiumisation. We believe this trend is here to stay.”

The beauty care segment has also returned to growth ways. As per Euromonitor International, the super-premium beauty and personal care market in India was around $313 million in 2019. It dipped to $210 million in 2020 and is around $240 million today. Brands such as Kiehl’s and L’Occitane have adopted modes such as video consultations to keep in touch with customers.

Big-ticket items such as luxury cars are also seeing growth. To be sure, luxury vehicles account for less than 1.2 per cent of total vehicle sales in the country. Mercedes-Benz has posted a 99 per cent sales growth in Q3 of 2021 with 4,101 units sold. Top-end products such as the Maybach GLS 600 and the new S-Class have witnessed high customer interest. At Rs. 2.43 crore, the Maybach 600 GLS had 50 units pre-booked and sold even before the official launch.

Brands such as Lamborghini and Maserati have also seen growth. “There has been a sizeable surge in demand for Maserati India in the first six months of 2021, and we foresee this trend to continue for the rest of the year,” says Bojan Jankulovski, Head of Operations, Maserati India. Apart from metros, demand is also coming from tier 1 and tier 2 cities. For Lamborghini, 25 per cent of its sales are now in tier 1 and tier 2 cities. In March, it delivered the 100th Urus, and recently celebrated 300 Lamborghini cars in India. “We expect the growth trajectory to continue for the coming years and are confident of 2021 being another record year for us,” says Sharad Agarwal, Head, Lamborghini India.

An increase in the luxury real estate market has been the direct result of the pandemic. Work/study from home has meant people want more space. India Sotheby’s International Realty sold over 50 homes costing $1 million-plus between August 2020 and August 2021. Sothebysrealty.com said in its January-March 2021 report that Indians are searching for multi-million dollar homes in various geographies, the top cities being London, New York and Paris. In India, destinations such as Goa and Shimla are the popular ones.