In 2021, a year when the second wave of the pandemic relegated discretionary spending to the backburner, luxury goods and items bucked the trend. Top-end cars, gold and jewellery and super-luxury residential projects recorded a surge in numbers during the last year, topping not just the pre-pandemic levels but also, in some cases, levels reported 5-10 years ago.
* German carmaker BMW clocked a 35% growth in 2021 — its highest in India in a decade.
* In the first nine months of 2021-22, the value of gold imports exceeded last full year’s number of $34.60 billion to reach $37.98 billion.
* ‘The Camellias’, DLF’s Gurgaon based super-luxury project, clocked record new sales worth Rs 1,037 crore during the July-September quarter of 2021.
The trend is evident in sales clocked by top-end carmakers.
During the year, the BMW Group sold 8,876 units of BMW and MINI cars, and 5,191 units of high-end bikes.
Its rival Audi, a Volkswagen group company, reported a two-fold jump in retail sales at 3,293 units in India in 2021, compared to 1,639 units in 2020. The uptick was propelled by Audi’s top-of-the-line electric cars — e-tron 50, e-tron 55, e-tron Sportback 55, e-tron GT, RS e-tron GT — and the petrol drivetrain Q-range and A-sedans.
By the first nine months of calendar year 2021, Mercedes Benz India had exceeded the full-year sales of 2020. In the July-September quarter alone, the company doubled its sales to 4,101 units from 2,060 units in the same quarter of 2020. The company had also indicated having built a “strong order-bank” for most of its existing and new products.
India’s biggest real-estate company by revenues, DLF Ltd, said its super-luxury segment exhibited “outperformance”, backed by the performance of its ‘Camellias’ project. The company sold 34 units in the project, with each unit typically going at a rate of around Rs 40,000 per square feet.
According to real-estate consultancy firm Anarock, the share of luxury housing sales as part of total residential sales rose to 12% (in the first nine months of 2021) compared to 7% in pre-Covid 2019.
In another study, Anarock said that in the July-September quarter, units worth Rs 4,000 crore have been sold in the Mumbai Metropolitan Region in the luxury and ultra-luxury segments. The luxury segment comprises units priced between Rs 1.5 crore and Rs 2.5 crore, and the ultra-luxury segment comprises units priced over Rs 2.5 crore.
The commodities space too has seen a preference for luxury goods.
After two straight years of decline, in 2020-21, the value of India’s gold imports reversed the trend and post a growth to clock $34.60 billion. In the first nine months of the ongoing fiscal, the value of gold imports has already exceeded last full year’s number to reach $37.98 billion —this is the highest in at least the last five years on the back of buoyant consumer demand, according to Department of Commerce data. The spot prices of gold in the global market has risen around 60% in the last five years.
The sharp rise in imports of valuables was also visible in the latest print of Gross Domestic Product (GDP) for July-September. Import of valuables — assets with store value such as works of art, precious metals, and jewellery –stood at Rs 1.19 lakh crore in July-September this year, the highest in any quarter in the GDP (base year 2011-12 series). It was Rs 42,253 crore in Q2 last year and Rs 44,242 crore in Q2 2019-20.
A Euromonitor report on luxury goods in 2021 noted that after drastic declines during 2020 across the market, in line with restrictions and limited mobility in response to the pandemic, luxury goods in India experienced a recovery in 2021, driven mainly by improving demand during the second half of the year.
Limited opportunities for international travel may have diverted some of demand to local luxury retailers.
The gold and jewellery segment, too, saw significant growth in the run-up to the festivals and wedding season towards the latter part of 2021.
In an earnings call conducted on November 12, 2021, Saurav Banerjee, chief financial officer of Mumbai-based retail jewellery chain Tribhovandas Bhimji Zaveri said, “We have witnessed…completely different kind of scenario from what it was three, four months ago. Customers have been coming back in absolute hordes. I would say there has been a huge demand, which has been generated during the entire stretch of period between Dussehra or Durga Puja up to Dhanteras and Diwali. We have seen the revenue generation very similar to what it was in 2019-20…So, we have seen those kind of numbers coming back and which is very encouraging for us”.
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