Wealth Mgmt Report

8/4/2019 Wealth Mgmt Report

1/16

Spends:

Attitudes,

Motivation and

the Ultra Wealthy

Lifestyle


2/16

In February 1992, while presenting his second budget as finance

minister, Dr. Manmohan Singh had said, To realise our development

potential, we have to unshackle the human spirit of creativity, idealism,

adventure and enterprise that our people possess in abundant

measure.

Critically, what has changed radically due to this accumulation of

wealth by more and more Indians has been their attitude towards

spending. Until the 1990s, leaving aside some regional cultural

differences, the average Indian was far more circumspect in spending,

particularly on items or services that are generally perceived to be

crassly consumerist.

That is no longer the case. The average individual is today bombarded

through all forms of media by focused sellers intent on peddling a

variety of goods. Moreover, due to the explosion of information fuelled

by the Internet, and increased global travel, there is greater awareness

of global brands. And there is willingness to spend because things are

within reach and the pockets are loaded.

Anecdotal or apocryphal, there is this story about Americas first

billionaire John D Rockefeller. One day, Rockefeller made a call from a

pay phone and lost his quarter. When the machine did not refund the

money, he called the operator who expressed regret over the incident

and asked for his name and address so that the amount could be

returned to him. "My name is John D...," Rockefeller began. "Oh, forget it.

You wouldn't believe me anyway!"

Today, nearly two decades later, it would be fair to say that the

economic reforms of the early 1990s did indeed unleash a wave of

industrialisation and growth. This fuelled increased levels of incomeand wealth among many sections of Indian society.

Ultra HNIs and spending

SPENDS

So, is it that the ultra HNIs, despite their millions and billions, are

burdened with the same worries and concerns that trouble most

ordinary folk? Or is Rockefeller just an exception to the breed? Our

survey on spending threw up a few surprises to this, and other

questions related to the spending behaviour of the wealthy.

First, as a proportion of total income, it is the Professional and not,

as popular wisdom would suggest, the Inheritor or the Self-made

who, well, splurges the most, if one can call it that. This can probablybe explained by the fact that Professionals derive their income

predominantly from a job, unlike the Inheritors and the Self-made,

both of who generate their income principally from their businesses.

Not surprisingly, the latter two plough back nearly a third of their

income into their primary businesses. All the three the Inheritors, the

Self-made, and the Professionals save (cash savings) nearly a fifth

of their total income, and invest another one-fifth to multiply their

personal wealth.

In a pattern that can be explained on the basis of widely acknowledged

regional cultural traits, ultra HNIs in the North tend to be a bit more

expansive with their money compared with their counterparts from

the South.

The comparison across age groups coughed up what, at first glance,

appeared to be a bizarre statistic:

But it is not so remarkable if one considers that most of the younger lot

are passionate about their businesses, and are highly motivated by the

desire to grow their businesses aggressively, enhance their wealth and

gain recognition. Consequently, a greater percentage of both their

income and time is invested in their businesses.

The relatively younger ones appear

to be far more conservative in their expenses. This is antithetical to the

perception that the old are generally thrifty compared with the young.

24 T.O.P. India - Kotak Wealth & CRISIL Research|


3/16

Source: T.O.P. India - Kotak Wealth & CRISIL Research

The Professional not the Inheritor or the Self-made spends the most, as a proportion of total income

Expenses

Investment in

primary business

Savings

Investment for growing

personal wealth

Charity / Philanthropy

Others

30.2%

21.5%

19.0%

18.9%

6.2%

32.6%

20.0%

20.1%

21.6%

10.4%

2.5%

28.8%

15.9%

20.8%

Self-made ProfessionalsInheritors

18.6%

4.2%

4.3%

4.4%

T.O.P. India - Kotak Wealth & CRISIL Research 25|


4/16

Not so the older generation of ultra HNIs. Their passion for

reinvestment into their businesses wanes as they grow older. This,

perhaps, is because after they become well-known and their

businesses become established, and are increasingly turned over to

professionals or the next generation of family, they are left with both

time and money to indulge themselves on cravings they probably

sacrificed in their younger days.

Our survey numbers bear this out.

By contrast, the semi-retired ultra HNI is far more laidback: he reinvests

only 18 per cent of his income in his primary businesses, and spends

nearly 28 per cent of his income on vagaries such as luxury travel

packages, a luxury watch, or even high tech gadgetry.

It would be inappropriate to conclude from all this that the Professional

is a squanderer. According to the results of our attitudes survey, unlike

the Inheritors and the Self-made, Professionals are not as

overwhelmingly consumed by the desire to build up wealth that their

children can inherit; based on their own experiences, they place far

greater premium on success through good education and hard work,

and are quite willing to let their progeny come good on their own.

Equally, we found, the Professionals are acutely conscious of the

environment they come from and are far more inclined towards charity

than the others. Quite distinct from their regular or occasional spend,

the Professionals bequeath nearly 10 per cent of their income towards

noble causes, markedly higher than 6 per cent for Inheritors and

around 4 per cent for the Self-made.

On the flip side, as noted earlier, while putting away a reasonable

percentage of his income as savings, Professionals also show greater

Ultra HNIs who are active or veryactive in their businesses spend nearly a fifth of their income on regular

or occasional expenses, and reinvest nearly 30 per cent of their

earnings in their primary business.

propensity to spend on luxurious items. But even here, caution rules:

the motto is value for money.

By contrast, for Inheritors, luxury has always been a way of life, and

brand is often associated with societal status, and hierarchy and even

familiarity as one of them said, I plan purchase of only high-value

(read brand) items. It should reflect my status and price quite often

plays secondary fiddle in their purchase decisions.

Overall, the survey revealed,

Following closely are items such as domestic

and international branded wear, high-end cameras, and luxury leather

products.

ultra HNIs as a class spend a significant

portion of their overall expenditure on customised holiday packages,

luxury watches, jewellery, diamonds and precious stones, and

household electronics.

Note: The data values have been indexed to Exclusive holiday packs.


Ultra HNIs prefer to spend more on products meant for the family

A significant portion of overall expenditure goes into customised holidaypackages, luxury watches, jewellery, and household electronics.

Luxurywriting

instruments

56

Homedecor /Crystals

57

Jewellery /Preciousstones

90

Apparel /Accessories

73

Householdelectronics

90

Exclusive

holiday packs

100

Luxury watches

98

Art /Artefacts

36

Vintagespirits

52



5/16

Home decor /

Crystals

Jewellery /Precious stones

Household

electronicsLuxury watches

Exclusive

holiday packs

82%

17%1%

57%

37%

6%

56%

43%

1%

54%

44%

2%

41%

58%

38%

59%

3%

Vintage spirits /Liquor

Apparel /Accessories

Luxurywriting instruments Art / Artefacts

67%

28%

5%

42%

58%

39%

61%

1%

BothPlanned Impulse


Big-ticket spends are planned in advance, often with family involvement

In most purchases, such as holiday packages, luxury watches, jeweller y, household electronics, andhome dcor, the family plays a paramount role, considering the huge spends involved.

Planned versus impulse purchase

an overwhelming 88 per cent of the Inheritors said the

choice of destination and the length of the holiday was determined in

consultation with others in the family, and the numbers were similarly

high for Professionals and Self-made at 85 per cent and 79 per cent,

respectively.

Our survey grappled with one key question: what is the nature of ultra

HNI spending? The answer: Largely planned. In most purchases, such as

holiday packages, luxury watches, diamonds and jewellery, household

electronics (which include premium mobiles and high-end cameras),

and home dcor, the family plays a paramount role, considering the

huge spends involved.

For instance,

In fact, the influence of the spouse or the children on such purchases is

so profound that many of the respondents could not recall what their

last such high ticket purchase was, because it was not a purchase drivenby their own particular whim or fancy, but was more the result of family

deliberations.

For the most part, price is not really a primary consideration for the

Inheritor and the Self-made, whereas value for money is a major factor

for the Professional, the older and semi-retired.

Planned buying is usually led by need; therefore, there is a tendency to

also deliberate on factors such as quality and durability of the product,

particularly in Indian climates, exclusivity, brand and newness of the

model.

Although the preference is for well-known brands, the ultra HNI is not

averse to bargain purchases.

Apart from these categories, most buying is impulse-led. Mostpurchases are spontaneous, something catches the eye and I pick it up.

I cant recall the purchase time and price, one respondent observed.

There are certain distinct factors that guide a planned purchase.

Because they tend to be big-ticket items and involve consensus

decision making in the family, appeal and price are important factors in

such purchases.



6/16

Impulse purchases are spur-of-the-moment buying, guided by a mix of

appeal and whim.

New York Herald founder James Bennett once discovered and began

to frequent a restaurant in Monte Carlo that he said boasted a perfect

mutton chop. One evening, Bennett arrived to find someone seated at

his favourite table.

His solution? He immediately purchased the restaurant (for $40,000),

asked the diners at his table to leave (even though they were only

halfway through their meal), finished his meal (mutton chops), and

returned the restaurant to its previous owner.

Despite ease of use and convenience, whether goods can be purchased

online or not is not a major determinant while shopping.

The online route is overwhelmingly used by all nearly 90 per cent of

Inheritors, Self-made and Professionals replied in the affirmative in

purchasing of air tickets, and holiday bookings. To a lesser extent, it is

also used for purchase of hi-tech gadgetry, apparel and

accessories.

One major dissuading factor for online purchases is the fear of credit

card fraud. So, even in the case of booking of travel tickets and holiday

packages, a majority of the respondents said that to feel safer during

online purchases they tend to use their corporate credit cards rather

than their personal cards.

Impulse purchases are usually done at the airport (duty-free shops) or

while travelling and purchases are made largely on how eye-catching

the product is. Other factors guiding impulse buying are the brand, the

newness of the product, and exclusivity. Critically, need for the product

is not a factor; but having cash in hand is.

The Inheritors are the most comfortable doing online shopping,

among the three categories. Additionally, across categories, it appears

to be more popular among the younger lot.

All work and no play makes Jack a dull boy. True to adage, the ultra HNIs,

many of whom have slogged it out, or continue to toil hard, in the

workplace to reach the heights that they have, ranked vacationing astheir topmost priority.

Unlike the Inheritors or the Self-made, who own businesses and

perhaps employ others in large numbers to run them, workplace

burnout is an indisputable factor of the Professionals. Perhaps

reflecting this dichotomy, nearly 67 per cent of the Professionals

confessed that their biggest weakness was exclusive luxury holiday

packages, as compared to 65 per cent and 54 per cent respectively, for

both the Inheritors and the Self-made.

Travel

A majority of the ultra HNIs travel at least twice a year, while about 15-

20 per cent of the Inheritors and the Self-made travel thrice or more

Professionals have a penchant for travel

Overall

Inheritors

Self-made

Professionals

100

143

94

91

Note: Data values for the three ultra HNI profiles are indexed to Overall.




7/16

Note: Data values for the cities are indexed to All India.


Ultra HNIs in Mumbai spend far lesser on travel

116Other cities

Delhi99

Bengaluru99

All India100

Mumbai91

annually. For the Inheritors and the Self-made, the most common

reasons for travel abroad are family functions, business purposes, or

leisure, not necessarily in that order. For the Professionals, it is mostly

either conferences, business trips or vacations (including leisure, sports

or entertainment events).

The average stay of travel overseas, particularly if it is for sightseeing, is

1-2 weeks. Weekends or short 3-4 day breaks are increasingly being

used for quick getaways within the country, even within familiarsurroundings, if only to take a break from the monotony of routine

work.

Sometimes, we just move to the Taj over the weekend and chill out. My

kids carry their cycle and toys. It is good fun. Completely disconnected

from work, but you are still in familiar surroundings, a Mumbai-based

ultra HNI remarked.

A majority of ultra HNIs travel abroad at least twice a year


36%

10%

8%

13%

33%

54%



8/16

11.1%

11.1%

Once a year Twice a year Thrice a year

More than

thrice a year

No fixed

frequency

1-2 days

3 days - 1 week

1 - 2 weeks

More than 2 weeks

Not fixed

33.4%41.6%59.2%54.5% 76.9%

24.2% 15.4% 22.2%

22.2%

41.7%30.0%

6.1%2.5%

15.2% 8.3% 7.7% 16.7%


Average duration of stay is 1-2 weeks, regardless of the frequency of overseas travel



9/16

Interestingly, economy class appears to be the most preferred mode of

travel overseas for both the Inheritors and the Self-made; while nearly

70 per cent of the Inheritors and 64 per cent of the Self-made said they

travel economy class, nearly 70 per cent of the Professionals said they

travel business class.

That may appear a trifle peculiar, but is nonetheless easy to understand

if one considers that the Professionals travel mostly for conferences or

business purposes, which is generally paid for by the company.

Moreover, the economy class is favoured for short flights overseas,

whereas the business class is the preferred choice for long flights. For

short holidays within the country, most ultra HNIs choose to drive to

their destinations.

Besides, in the case of the Inheritors, accustomed as they are to setting

the standards, there really is no one that they need to emulate or look

up to. Even after he became America's first billionaire, John Rockefeller

chose to operate from a very spartan office. When a curious visitor once

asked him how he expected to impress anyone with an office such as

his, Rockefeller retorted: "Who do I have to impress?"

The motives for vacationing are diverse. Many of them, particularly

those who are still active in their businesses, want to get away,

anywhere, to relieve themselves of the tedium associated with work

and come back rejuvenated, while others, particularly the younger

ones, indulge individual tastes such as scuba diving, photography,

landscape and the environment and choose the locale accordingly.

I chose a vine chateau in France for my holiday. Staying and driving

along the countryside was a wonderful experience, one of the

respondents recalled.

For some others, it is the sheer pleasure of gambling. Every time I travel,

if there is a casino, I gamble. I have made my share of profits there. Why

not?

If I am visiting my daughter, my holidays last for a month; otherwise, in

other destinations, it is usually a couple of weeks, according to another

ultra HNI.

The potential market size of the luxury vacationing industry (includes

hotels, fine dining and travel) was estimated to be `234 billion as of

2010-11. An average ultra HNI takes at least two holidays per year one

short and one long. During these holidays, he spends money on

business or first class air travel and best-in-class luxur y hotels.

Associated as they are with wealth, premium lifestyle, and brands, it

should come as no surprise that luxury watches are a coveted item for

ultra HNIs.

For those born into wealth, a luxury watch is a thing to be flaunted; a

status symbol, the hallmark of a complete man. It is marginally less so in

the case of a professional, and the numbers ref lect that.

Nearly 74 per cent of the Inheritors and 55 per cent of the Self-made

professed their inclination to buy a luxury watch, whilst only one-third

of the Professionals did so. Predictably, the preference appears to

decline with age, with only 33 per cent of those above 55 years

spending on it compared with 74 per cent of those under 40.

Ostensibly, even among the supra-rich, the motivation to display and

impress diminishes as one grows older. A majority of those surveyed,

said they owned 2-5 or more luxury watches. Rolex, Omega, Rado,

Cartier, Piaget, Breguet, Jaeger Le Coulture, and Girard Perregaux are

sought-after brands .

Indias potential luxury watch market was an estimated `15 billion in

2010-11. A majority of luxury watch purchases in the country take place

Luxury watches

Even in this high-tech age, luxury watches still easily outrank

expensive electronic gadgetry such as luxury mobile phones in terms

of aspiration.



10/16

Luxury watches are a coveted item for Inheritors

Note: Data values for the three ultra HNI profiles are indexed to Overall.Source: T.O.P. India - Kotak Wealth & CRISIL Research

96

109

73

100

Inheritors

Overall

Self-made

Professionals

in Mumbai or Delhi, although the aspiration for them is quite high in

other Tier I and Tier II cities.

Indians, regardless of age, class, or wealth, have always been enthralled

by jewellery. Because of its dual utility as an investment, the fascination

with it has not shrunk remarkably even during times of economic

turmoil.

Weddings and special occasion purchases and the ability of high valuediamonds and jewellery to act as a store of value make this market a lot

more resistant to ups and downs.

The ultra HNIs are no exception to this.

Wearing jewellery is the most common form of display of wealth and

social status.

Jewellery and precious stones

It is, therefore, not surprising that the Inheritors and the

Self-made spend more on jewellery than the Professionals. The more

prosperous you are, the more the jewellery on your person.

Jewellery a traditional fascination for Inheritors



110Inheritors

93 Self-made

100Overall

80Professionals



Ultra HNIs in Delhi are relatively the biggest spenders on jewellery

Other cities

109

100All India

91

Bengaluru

111Delhi

Mumbai93



11/16

The potential market size of luxury jewellery was estimated at ` 229

billion in 2010-11. According to industry estimates, luxury jewellery is

almost 15 per cent of the total diamond jewellery market.

The really top end of the luxury jewellery market, dominated by leading

family jewellers and independent jewellery designers, would be large

high-quality solitaires (over 3 carat) and high-end, diamond-studded

jewellery (over `1 million per piece).

Major global brands such as Cartier, Chopard, and Tiffany have been in

the country for a while now. However, given their limited range, lack of

custom-made designs and reluctance of Indians to pay a premium for

designer jewellery, their impact on the market has so far been muted.

Today, however, there is an increased awareness and focus in the Indian

jewellery industry on design; apart from designers, theme-based

collection designers too are drawing clientele. Top family jewellers, in

particular, focus on this segment a lot more. The jewellery industry inthe country has traditionally operated on the basis of trust, and those

having historical relationships with wealthy families do have a

significant advantage.

Driven by the complementarity of the luxury jewellery market with the

apparel market, fashion designers have increasingly turned their

attention to the former segment. The demand for luxury jewellery in

the country is virtually insatiable, and unlike other luxury products, this

market is more evenly distributed, with demand high in cities such as

Kolkata and Chennai.

Although owning a car is now a necessity, a luxury car such as a

Mercedes or BMW is still used to send out an I have arrived lifestyle

statement. Luxury cars are those with an on-road price of`2.3 million

or above.

Luxury cars

In February last year, in Aurangabad, while working out at a gym, a city-

based property developer shared with a couple of friends his

childhood dream of owning a Mercedes. He suggested that all his

friends should also join in.

"We laughed it off as we were not sure of even 11 people joining the

bandwagon. But he continued to pursue the idea wherever and

whenever he got an opportunity," reminiscences one of the buyers.

The initiative burgeoned into a deal with Mercedes that was negotiated

at the companys headquarters in Germany. The result: Last October,

150 Mercedes were sold on one single day to a group of buyers in the

city comprising doctors, builders, industrialists and professionals.

The aim, in this instance, was to showcase the citys wealthy while

simultaneously availing of discounts pursuant to the mass booking.

Most ultra HNIs own a number of cars to suit their diverse needs.Some of the popular brands, our survey revealed, were Honda,

Toyota, Mercedes, BMW, Audi, Skoda, and Hyundai. On an average,

the Inheritors own 3-4 cars, while the Self-made and the Professionals

own 1-2 cars each.

In terms of aspirational cars, an overwhelming favourite is the SUV

(sports utility vehicle) or the crossover SUV, perhaps in part because of

the rugged, macho image associated with it, coupled with the fact that

it is ideal for short family holidays in nearby locales. Another sought-

after model is a sports car or a roadster. Interestingly, the Professionals

showed the greatest desire to own an ultra-luxury car, while the

younger Self-made ultra HNIs prefer an SUV.

For regular use in cities, Japanese cars are preferred because they are

trusted for Indian roads. Among the younger Self-made, luxury cars are

a definite style message.



12/16

11%

5%MITSUBISHI

MAHINDRA12%MERCEDES 17%

11%

31%24%

9% 6%


Japanese brands the most trusted cars for Indian roads

Other brands

Note: Ultra HNIs have multiple car ownership. Hence, the percentage values do not add up to 100.

64%HONDA 52%TOYOTA 36%SUZUKI

(MARUTI)

6%TATACHEVROLET FORD VOLKSWAGEN

BMWHYUNDAI SKODA

The potential size of the luxury car market was estimated at `140-150

billion as of 2010-11. Luxury car sales have grown at a CAGR of 22 per

cent over the last three years (2008-09 to 2010-11). This growth is

mainly attributed to the entry of new luxury car players in India,

increasing spending propensity of the customers, easy availability of

finance and improving economic scenario. India being a growth

market, players have focused on increasing sales in the country and

thereby have enhanced their dealership network considerably. For

instance, Audi has enhanced its dealer network to more than 15 dealers

with BMW having more than 20 dealers across the country as of

2010-11. This has aided the growth of the luxury car market

considerably.

The growth in the luxury car market has also been driven by a number

of new model launches, and an increase in the spending propensity of

customers has led to high demand for luxury vehicles. Also, attractive



13/16



Ultra HNIs in Bengaluru relatively the lowest spenders on household electronics

All India

100

Mumbai

Bengaluru

Other cities

Delhi

100

109

9896

equated monthly installments (EMI) schemes by financiers that help

reduce the EMI for customers has led to easy availability of finance,

thereby leading to high growth in the luxury car sales.

In todays high-tech era, marked by rapid changes in technology and

constantly evolving products, it is obvious that many high-priced items

that enhance and complement personal lifestyles will hold sparkle for

those who can afford them.

Although it would be fair to say that all ultra HNIs spend a great deal of

money on high-end electronics, the Professionals stand out in this

respect; their spend on household electronics is next only to

holidaying. This is ostensibly because of their familiarity and ease with

technology; due to their education and work profile, many of them

have encountered or own similar products and are seeking to upgrade

them to match their lifestyles.

As you age you dont want to spend on frivolous things. You are more

into buying things which will last for long, you want to spend more on

having good experiences like holidays, one older ultra HNI

underscored.

In India, household luxury electronics is a vast segment that includes

high-end home entertainment systems 55 or larger television and

sound systems from brands such as Bang & Olufsen; custom-built

entertainment rooms or theatres costing upwards of`1 million and

high-end mobile phones from luxury brands such as Vertu. An

emerging trend in this sector is that of home automation, wherein

Household electronics

Born into the information age, the younger generation is particularly

comfortable and hands-on with technology, and that is reflected in

their higher spend on such items. The older ultra HNI is more likely to

purchase them as gifts to family or friends, rather than for personal use.

appliances and gadgets at home can be operated through remote

control.

The potential luxury electronics market in India was estimated at `51billion in 2010-11. Although the market in India for luxury mobile

Household electronics resonate more with Professionals



lla

rev

O

sr

otir

eh

nI

sla

nois

se

fo

r

P

eda

m-fl

eS

133109

100

86



14/16



Ultra HNIs in Mumbai are bigger spenderson apparel and accessories

Mumbai119

All India100

Bengaluru100

Other cities92

Delhi

84

phones is still niche, albeit a growing one, there is huge demand for

home entertainment units, whose demand is closely correlated to the

demand for luxury homes. It has been observed that people who

purchase large homes or bungalows typically convert one of the rooms

into an entertainment centre with the assistance of interior designers

who also help source the various components such as the television,

audio systems, blu-ray players and gaming consoles, as well as design

the aesthetics of the rooms.

This market extends beyond the metros to emerging Tier I cities such as

Bengaluru, Chennai, Hyderabad, and Ahmedabad. Although

purchasing behaviour varies from place to place, buyers in the larger

cities or metros are more brand-aware and engage in a lot of due

diligence before buying these products. In smaller cities, purchases are

driven more by the I want one too attitude.

There is a high import duty on such goods, due to which grey market

purchases in the segment are appreciable.

Dressing nattily is a common human trait, and the degree of spending

on them differs only on the basis of individual preferences. Inheritors,

having grown up in an atmosphere of luxury, are more knowledgeable

about international designer brands and tastes are sometimes

developed at a far earlier age.

Price is never the dominant consideration for Inheritors while buying a

dress; brand is. Most of our respondents from the Inheritor category

indicated that they were drawn towards, and more aware of,

international designer brands and utilise their overseas visits to

purchase their favourite brands. I have not shopped in India for the last

10 years, one of them remarked.

Apparel and accessories

The same international brands in India dont have the same range,

so I pick them up when I travel overseas. Also, apparel, especially

international, better to buy them abroad. The range, the cut, the finish,

is better there, even the price.

The Self-made mirror the mindset of the Inheritors to some extent,

although the younger ones among them, for reasons such as greater

networking, are bigger spenders on clothing and accessories

compared with the older lot.

The three big segments of the fashion luxury apparel market are the

international branded apparel, Indian designer wear, and accessories.

The market is segmented on the basis of wear occasions.

International brands cater to casual wear, formal western wear, and

accessories, while Indian designers cater to the traditional, ethnic wear

market. International brands, with the exception of Canali, have by and

large stayed away from the Indian wear market.

The Professionals spend a relatively lower portion of their income on

dressing, and they show no particular proclivity towards either

domestic or international brands.



15/16

Note: Data values for the three ultra HNI profiles are indexed to Overall.Source: T.O.P. India - Kotak Wealth & CRISIL Research

Professionals show the lowest inclination to spend on

branded apparel and accessories

107Inheritors

100Overall

77Professionals

100Self-made

Indian designers have experimented with western formal and casual

wear, but their success rate is hardly anything to write home about.

There are no major success stories among global brands in India as yet

either, although the general perception is that the chances of being

successful are closely related to the awareness of the brand.

In contrast to mature markets, the apparel market in India for men is

much larger, constituting around 50 per cent, and has seen the entry of

several brands including Louis Vuitton, Burberry, Gas, Versace, and

Armani. Some of them forayed into the country in collaboration with

more active Indian partners such as Murjani Group, Sachdeva Group,

Raymonds and DLF, and the results of these brands have been mixed

while some have been fairly successful, some have exited as well.

There are some multi-brand players as well The Collective by Madura

Garments, for instance. Most of these brands have ventured out of five-

star hotels, which was their first footprint, into luxury malls and the high

street. Market growth has been aided by the presence and expansion of

these brands.

The industry sees the success of certain brands as an indication of the

maturing of the consumer, and the latent demand for luxury apparel,

which is being buoyed by fashion shows, new luxury store launches

and end-of-season sales, and price competitiveness (compared with

international prices).

The potential market for apparel and accessories in India was estimated

at`64 billion as of 2010-11, and its mainstay is Indian traditional wear,

sarees and designer wear, particularly for weddings and personal

collections. Most designers today have their own exclusive boutiques,

either in five-star hotels or even in luxury malls.

Accessories are a very attractive segment of this market, and its

potential is huge. Because of the standard nature of these products

such as handbags, belts, sunglasses and cuff-links, which are fast

moving items certain global brands have done well in the domestic

market.

As people grow richer, they are finding newer ways to splash their

money around.

And where do Indians like to spend the most? The Big Fat Indian

Wedding, where else! The wedding planner has arrived in India, and in a

big way. And destination and theme weddings are the in-thing on the

circuit. So, marriage in Canada, reception in Morocco, and honeymoon

in Thailand is not a novelty anymore.

New trends in spending



16/16

Note: Data values for the cities are indexed to All India.Source: T.O.P. India - Kotak Wealth & CRISIL Research

Ultra HNIs in Mumbai relatively the highest spenderson home dcor

Mumbai118

Other cities107 100

All India83

Bengaluru91

Delhi

Destination weddings, in fact, are a hot favourite with the super rich,

and event management companies are combining with the super rich

to make it an affair to remember, never mind the expense.

Another attended a wedding on a ship in Australia.

Theme weddings too are an interesting variant. The Trang underwater

wedding ceremony in February in Thailand is one such, or the sky-

jumping wedding. Or even a beach wedding in Hawaii, or wedding

celebrations spread over different days in different venues.

The wedding ceremony of a model and actress with a hotel magnate

was spread over 10 days in three different cities in India. The multi-

million dollar celebration involved 600 guests from 26 countries being

ferried around on chartered jets.

Chartering aircraft is not confined to weddings alone. In a cricket crazy

nation, friends sometimes charter flights in groups to attend cricket

matches, such as the World Cup semifinal between India and Pakistan

in Mohali.

My friend had a wedding abroad, and for guests who couldnt travel

with them (the wedding party), arranged for live video streaming, one

of them said.

Even losing has its virtues, apparently. One ultra HNI talked about how

you can be an angel investor, invest in a number of companies, and

then boast at parties about how much was lost in the ventures!

Further, partying has also become more frequent. People are not

averse to having weekday parties, with larger groups and on the

house parties. Earlier, people used to spend on expensive liquor for

small gatherings or for close friends, but now even if there are 3,000

people attending, vintage wines and expensive spirits are being

served, one of them commented.

Owning aircraft and yachts has also become popular, although

teething infrastructural problems such as ports for berthing, and

bureaucratic hassles are discouraging factors. One of Indias billionaires

owns four yachts. Another is believed to have purchased some islands

in Lakshwadeep, and a luxury mansion on a secluded island off the

coast of Cannes.

Some of our respondents said they had even spent a considerable

sum of money on storing their stem cells.

In short, the dictum is: Have money, will spend.



Ultra HNIs in Delhi and Bengaluru spend relatively less

on luxury writing instruments

Other cities

120Mumbai

114All India100

Delhi

85Bengaluru

85


Documents

Wealth Mgmt Report