Indian luxury pen market to double in size in 4 years

The Indian luxury pen market is all set to double its size from the current Rs 400 crore in the next four years. Higher disposable income and greater brand consciousness among Indian, especially young adults, has increased demand for global brands and almost all of whom are present in the country.

"Despite the sluggish market where discretionary spending has been curtailed, the luxury pen segment has been growing in double digits," says Nikhil Ranjan, CEO, William Penn - a distributor/retailer of luxury writing instruments with 26 outlets across the country and a market share of about 30 per cent. The other major players with a national presence in the market are Mont Blanc, Cross and Luxor. On Tuesday,  William Penn signed an exclusive distributorship agreement with German luxury pen maker Lamy. Lamy is one of the top 5 luxury pen brands in the world.

Indians' penchant for luxury pens pales in significance compared to Chinese. The size of little kingdom's luxury pen market is at least five times that of India's, estimates Ranjan. This puts its value at Rs 2,000 crore. "It is an indication of the potential that exists in India," he adds.

Despite the upside, there has not been much of an activity in the luxury pen market in the country which is broadly divided into the sub-Rs 8,000 category and the Collectors pens which cost in excess of Rs 10,000 (almost 85 per cent of the pens sold fall under the first category and balance 15 per cent under the Collector's pen category).

Not many new brands are entering the market. Ranjan says that is not surprising as many of the global brands are already present in the country.

Also as the market is very niche, there is not much of room on the retail side as well, he adds. There are other challenges as well. For instance, the import duty continues to be high ranging between 33 per cent and 45 per cent.

This adds to the cost of inventory and working capital management is a critical aspect of this business. While the distributors have to necessarily buy and stock the pens, the retails have the `sale or return' option.