Luxury Leather Goods in India

PROSPECTS

Luxury travel goods leads growth on the back of the rise in international trips

During the review period, women’s luxury bags and small leather goods held the highest share of value sales in overall luxury leather goods. This is primarily because the audience for the luxury leather goods portfolios of brands such as Louis Vuitton, Hermès, Gucci and Burberry is women.

Affordable luxury brands are gaining popularity amongst younger consumers

Affordable luxury brands gained more prominence in recent years in comparison with traditional luxury brands. Previously, only products from luxury brands such as Chanel, Gucci, Salvatore Ferragamo and Louis Vuitton were available in the country.

The personalisation of luxury leather goods, although niche, is promising

The personalisation of luxury leather goods is relatively niche in India, but has the potential to grow in the future. Given the high unit prices of luxury leather goods in the country, the majority of consumers continue to be hesitant to customise, as this incurs additional charges.

COMPETITIVE LANDSCAPE

International brands continue to dominate luxury leather goods

Five international brands, Louis Vuitton, Hermès, Gucci, Burberry and Bottega Veneta, together accounted for over 40% of retail value sales of luxury leather goods in 2017. Their strong brand recognition and high unit prices led to increasing value sales during the review period.

Expansion of the product range to men

Due to rising fashion-consciousness amongst men, international brands such as Burberry and Loewe are now also expanding their product portfolios to cater to this consumer group. This reflected in men’s luxury bags and small leather goods seeing the second-highest retail current value growth in luxury leather goods in 2017, and this is expected to continue in the forecast period.

Companies introduce affordable luxury lines to expand the consumer base

The Goods and Services Tax implemented in July 2017 brought luxury leather goods under the highest tax slab of 28%. The effective tax incidence prior to GST was around 18%, resulting in a 10% increase after the new tax regime.

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