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The Indian Wealth Story
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The Indian Wealth Story
A cultural evolution fuelling the growth
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India Wealth FactsIndia Wealth FactsIndia Wealth FactsIndia Wealth FactsIndia Wealth FactsIndia Wealth FactsIndia Wealth FactsIndia Wealth Facts
Different surveys but all pointing towards
significant potential in India (this
excludes the Indian Non Resident
population which is large and growing)
• Asia Pacific, which accounts for
31% of global household wealth
and 61% of the world's middle
class of emerging consumers,
remains the key growth engine of
the world economy and wealth
creation.
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* Source:KNIGHT FRANKWealth Report 2013 1
creation.
• The number of HNWI’s - people
with more than $1 million in
onshore liquid assets - in India
grew 200 per cent from 2006 to
2013. Households with an annual
disposable income of over
$100,000 increased 60 per cent,
from 700,000 in 2006 to 1.1 million
in 2013.
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HNWI Global Population:
3.68 Million Contributing
to USD 12 Trillion wealth
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HNWI India Population:
0.15 Million Contributing
to USD 589 Billion wealth
with SECOND HIGHEST
INCREASE in HNWI
population 22.2% & Wealth
23.4%
Source:
World Wealth Report 2013 by Capgemini & RBC Wealth Management. 3
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By 2022 India is predicted to overrun ChinaBy 2022 India is predicted to overrun ChinaBy 2022 India is predicted to overrun ChinaBy 2022 India is predicted to overrun ChinaBy 2022 India is predicted to overrun ChinaBy 2022 India is predicted to overrun ChinaBy 2022 India is predicted to overrun ChinaBy 2022 India is predicted to overrun China
Indicating that industrialists,
entrepreneurs, professionals and
almost everyone who falls into the
HNWI category will make their base
in Mumbai or Delhi.
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* The definition of a HNWI is someone who has US$30m or more in net assets, in this report including property (KNIGHT FRANK Wealth Report 2013)
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Distribution of HNWI in IndiaDistribution of HNWI in IndiaDistribution of HNWI in IndiaDistribution of HNWI in IndiaDistribution of HNWI in IndiaDistribution of HNWI in IndiaDistribution of HNWI in IndiaDistribution of HNWI in India
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8. VEDACTAdvisorsPLimited
The Indian Luxury MarketThe Indian Luxury MarketThe Indian Luxury MarketThe Indian Luxury MarketThe Indian Luxury MarketThe Indian Luxury MarketThe Indian Luxury MarketThe Indian Luxury Market
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What do they spend on?What do they spend on?What do they spend on?What do they spend on?What do they spend on?What do they spend on?What do they spend on?What do they spend on?
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Growth fuelled byGrowth fuelled byGrowth fuelled byGrowth fuelled byGrowth fuelled byGrowth fuelled byGrowth fuelled byGrowth fuelled by
This growth in HNWI’s (excluding NRI’s) are coming from:
• Entrepreneurs (especially new businesses like ecommerce &
opening up of sectors, FDI norms being liberalized, mining, power,
alternate energy, agriculture, realty & food).
• Focus of International brands & companies into the consuming
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• Focus of International brands & companies into the consuming
Indian population which means larger deployment of professionals
in leadership positions (large scale reverse migration).
• International entities interested in a presence in India (Buyouts, JV’s
& Subsidiaries to tap the growing consumer market).
• Growth in real estate (development versus urban migration).
• Growth of rural India (tax free agricultural income & feeding a
growing population).
• Inheritors (inherited wealth from a generation that saved).
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Growth fuelled byGrowth fuelled byGrowth fuelled byGrowth fuelled byGrowth fuelled byGrowth fuelled byGrowth fuelled byGrowth fuelled by
Contd..:
• Industrial growth is slow (0.6%) but the Services Sector continues to
grow (India's services sector contributes to about 60 per cent of the
country’s GDP, 35 per cent of employment, a quarter of the total
trade, and over half of the foreign investment inflows.)
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• Capitalization of mid segment companies by virtue of dilution of
stakes (stock market and PE).
• A buoyant middle class which has higher aspirations due to
exposure through travel, media and retail (driven more by wanting
to consume more).
• Continued Economic liberalization & reduced market controls (with
the focus on infrastructure and easy access to capital the ecosystem
is conducive to wealth generation).
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13. VEDACTAdvisorsPLimited
Personal Wealth FactsPersonal Wealth FactsPersonal Wealth FactsPersonal Wealth FactsPersonal Wealth FactsPersonal Wealth FactsPersonal Wealth FactsPersonal Wealth Facts
• Distribution of wealth is not balanced in India and factually for
Africa and India, the population share exceeds the wealth share by
a factor of ten.
• From a global point of view, individuals in China and India have a
relatively high probability to be upwardly mobile as a result of the
high economic growth in these countries.
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high economic growth in these countries.
• Household debt in India increased by 16% compared to the global
average of 1.7% indicating that consumption was on the rise YET
household debt as a percentage of gross assets is only 6% in India
(compared to 16% in both Europe and North America) showing that
asset creation was faster than the growth of debt.
• Personal wealth in India is heavily skewed towards property and
other real assets, which make up 86% of household assets.
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Types of Indian Luxury ConsumersTypes of Indian Luxury ConsumersTypes of Indian Luxury ConsumersTypes of Indian Luxury ConsumersTypes of Indian Luxury ConsumersTypes of Indian Luxury ConsumersTypes of Indian Luxury ConsumersTypes of Indian Luxury Consumers
The sacred four:
• Connoisseurs: they are the traditional rich, cultivated & consume
meaningfully.
• Experientialists: those who want to seek & understand the origin &
lineage of what they are buying or experiencing.
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lineage of what they are buying or experiencing.
• Aesthetes: they respect the intrinsic value of what is there but may
not be high on consumption.
• Flaunters: the new rich & those who use retail therapy as a means
of fulfilment emotionally as well as for societal & personal
advancement means.
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Cultural ImpedimentsCultural ImpedimentsCultural ImpedimentsCultural ImpedimentsCultural ImpedimentsCultural ImpedimentsCultural ImpedimentsCultural Impediments
• Inner conflict in the self made & new Indian HNI’s with middle class
mindset & the sudden access to wealth has led to emergence of
the closet consumer.
• The Indian culture has been an impediment to the consumer’s
confidence in flaunting wealth: traditionally only the royals flaunted
their wealth and the other classes kept a low profile.
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their wealth and the other classes kept a low profile.
• The average Indian who is on his/her aspirational climb from middle
class to the upper class is intimidated by luxury.
• Culturally the Indian consumer is one who demands value for
money which in the luxury segment is hard to define as the quality
of product and service is not supposed to have a transparent
costing system.
• Indians want a personal connect with the people they buy from and
the more they pay the more they expect something in return.
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The Indian luxury contradiction
OLD INDIA
– Maharajas
– Mega Cities
• NEW INDIA
– Masses
– Smaller Cities & Rural
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– International
– Restraint
– Old Luxury
– Transactional luxury
– India
– Openness
– New Luxury
– Holistic luxury
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Priorities of the Indian Luxury CustomerPriorities of the Indian Luxury CustomerPriorities of the Indian Luxury CustomerPriorities of the Indian Luxury CustomerPriorities of the Indian Luxury CustomerPriorities of the Indian Luxury CustomerPriorities of the Indian Luxury CustomerPriorities of the Indian Luxury Customer
History/
Legacy
Lineage
Value For
Money
Price
Brand
recogniti
on
Quality &
Service
Exclusive
& Elusive
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Legacy Money
on
Service & Elusive
Least Important Most Important
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18. VEDACTAdvisorsPLimited
Strategy to stimulate desireStrategy to stimulate desireStrategy to stimulate desireStrategy to stimulate desireStrategy to stimulate desireStrategy to stimulate desireStrategy to stimulate desireStrategy to stimulate desire
Breaking barriers
Create a cultural connect
Identifying the highly dispersed target groups and reaching out to
them
Promoting & Positioning a wider bandwidth of products
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POSITIONING RELEVANCE ACCESSIBLE
RELATIONSHIP
ENHANCEMENT
•Communicate
Brand Story
•Contextualization
•Establish
Credibility & ensure
Social Acceptance
•Traditions
•Values
• Culture
•Physical Access
•Price Access
• The Access to
experience
•Engage
Communities
•Address
aspirations
•Meaningful
interactions
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