Key Points
It developed into a major trend in 2023 when companies wooed the rich consumers to compensate for lower sales and falling margins.. While those at the lower income levels largely remained reluctant to open their purse strings after the pandemic ravaged the economy, the rich splurged on luxury items..
While makers of two-wheelers and FMCG companies hoped for a demand revival in rural India, the luxury goods market witnessed high sales, with India's rich splurging on expensive cars, homes, watches, etc.. Customers at the lower end, whose incomes took a beating during the pandemic, were further weighed down by inflation while the rich, who could not spend during the pandemic, indulged in revenge shopping...
The shift was seen in beverages, personal care and branded commodities, according to data from Bizom, a platform that automates retail execution at 7.5 million kirana stores, In personal care, consumers up-traded from low-price packs (up to Rs 50) - which shrank 6.8% during the quarter under consideration - to medium- (Rs 50-200) and high-value (Rs 200-plus) price packs, which grew by 2.7% and 4.1%, respectively...
Though demand in rural areas have largely remained suppressed, premiumisation also spread to small towns as Indians shift up the income pyramid and even small towns now have a class of consumers willing to splurge on premium products..
That long-term trend is indisputable and every retailer has to pay attention to these markets," Ashok Sonthalia, chief financial officer of Tata Group-backed Titan Company, which sells watches under the Titan and Fastrack labels besides jewellery brands Tanishq, CaratLane and Mia, along with Skinn perfumes and Taneira sarees, told ET in June..
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