In 2021, a year when the second wave of the pandemic pushed discretionary spending into the background, luxury goods and items bucked the trend. Top-of-the-line cars, gold and jewelry, and super-luxury housing projects all saw numbers rise over the past year, surpassing not only pre-pandemic levels but in some cases levels reported 5 to 10 years ago.
Consider this:
* German automaker BMW saw 35% growth in 2021 – the highest in India in a decade.
* In the first nine months of 2021-22, the value of gold imports surpassed last year’s value of $ 34.60 billion to reach $ 37.98 billion.
* ‘The Camellias’, DLF’s Gurgaon-based super luxury project, posted a new record turnover of 1.037 billion rupees in the July-September quarter of 2021.
The trend can be seen in the sales of the top automakers.
During the year, the BMW Group sold 8,876 BMW and MINI units and 5,191 high-end motorcycles.
Its competitor Audi, a Volkswagen Group company, reported a two-fold increase in retail sales to 3,293 units in India in 2021 compared to 1,639 units in 2020. The upward trend was driven by Audi’s top electric cars – e-tron 50, e-tron 55, e-tron Sportback 55, e-tron GT, RS e-tron GT – as well as the petrol Q series and A sedans.
In the first nine months of the calendar year 2021, Mercedes Benz India exceeded the total annual sales of 2020. In the July-September quarter alone, the company doubled its sales from 2,060 units in the same quarter of 2020 to 4,101 units. The company also stated that it had built up a “strong order bank” for most of its existing and new products.
India’s largest real estate company by revenue, DLF Ltd, said its super-luxury segment had “outperformed”, aided by the performance of its “Camelias” project. The company sold 34 units as part of the project, with each unit typically costing around Rs 40,000 per square foot.
According to the real estate consultancy Anarock, the share of sales of luxury properties in total housing turnover rose to 12% (in the first nine months of 2021) compared to 7% in the period before Covid 2019.
In another study, Anarock said that in the July-September quarter, units valued at Rs 4,000 crore were sold in the Mumbai metropolitan area in the luxury and ultra-luxury segments. The luxury segment includes units priced between Rs 1.5 crore and Rs 2.5 crore, and the ultra-luxury segment includes units priced in excess of Rs 2.5 crore.
The raw materials sector has also experienced a preference for luxury goods.
After two consecutive years of decline, the value of Indian gold imports reversed trend in 2020-21, growing to $ 34.60 billion. In the first nine months of the current budget, the value of gold imports has already exceeded last year’s value and reached 37.98 billion trade data. The spot prices for gold on the world market have risen by around 60% in the last five years.
The sharp rise in imports of recyclable materials was also evident in the recent pressure on gross domestic product (GDP) for July-September. Imports of valuables – assets with inventory value such as works of art, precious metals and jewelry – stood at Rs 1.19 lakh crore in July-September this year, the highest in any quarter in GDP (base year 2011-12). It was Rs 42,253 crore in the second quarter of last year and Rs 44,242 crore in the second quarter of 2019-20.
A Euromonitor report on luxury goods in 2021 found luxury goods in India rebounded in response to the pandemic in 2021 after sharp declines in 2020, mainly driven by improved demand in the second year half of the year.
Limited opportunities for international travel may have diverted some of the demand to local luxury retailers.
The gold and jewelry segment also saw significant growth in the run-up to the festival and wedding season towards the end of 2021.
In a conference call on November 12, 2021, Saurav Banerjee, Chief Financial Officer of the Mumbai-based jewelry retail chain Tribhovandas Bhimji Zaveri, said, “We saw … a completely different scenario than three or four months ago. Customers come back in absolute hordes. I would say there was a huge demand generated throughout the period between Dussehra or Durga Puja, to Dhanteras and Diwali. We saw that the revenue generation was very similar to that in 2019-20 … So we saw these kinds of numbers come back, which is very encouraging to us. “
