Preparations for the five-day festival began a while ago in India with shoppers on the lookout for even more luxurious gifts and outfits for this year’s event which has increasing importance to Europe’s leading luxury brands.
Diwali, derived from the Sanskrit word “Deepavali,” translates to ‘row of lights’ and stands as a joyous celebration across Hindu, Jainism, and Sikh traditions, symbolizing the victory of good over evil. This festival, observed between late October and November, with the main day on 12 November this year, emphasizes abundance, good fortune, and the ritual of lighting candles. Diwali provides an opportunity for indulgence in sweets, elaborate dressing, and the joy of gift-giving, creating a vibrant tapestry of cultural festivities.
Traditionally, Diwali attire featured saris, lehengas, and salwar kurtas, but a contemporary shift is evident. The evolving preferences of India and its diaspora, showcasing a surge in high-spending consumers, have created a significant market for luxury brands. Icons like Jimmy Choo, Swarovski, and Gucci have seized this trend, introducing limited edition ranges that blend international flair with traditional outfits. Cecilia Morelli Parikh, co-founder of Mumbai’s Le Mill, notes the clientele’s style-forward and experimental nature, seamlessly merging the best of both worlds with a harmonious fusion of global brands and traditional garments, as shared with Vogue.
Demand for luxury goods. In the earlier part of this year, we highlighted the remarkable surge in demand for luxury goods among the wealthiest segments of society. In a significant milestone, April witnessed French conglomerate LVMH surpassing the $500 billion mark, marking a historic achievement as Europe’s first company to do so. LVMH, boasting ownership of 75 prestigious brands, including fashion icons like Dior, Louis Vuitton, and Tiffany, concurrently secured a position among the world’s top 10 most valuable companies. This global fascination with luxury finds resonance in India, where a noteworthy 70 percent of the population expresses a willingness to increase their spending this Diwali. This figure signifies a substantial 35 percent rise compared to the previous year, underscoring the growing affinity for luxury shopping in the Indian market.
According to research by Mileu, this is due to more than half of consumers viewing their financial situation as improved (53 per cent), and just under half being eager to celebrate a lot more this year (49 per cent).
A significant majority also said they were interested in purchasing luxury goods and apparel (84 per cent) and gold (80 per cent).
Luxury slowdown. The optimistic sentiment prevailing among Indians ahead of Diwali brings positive tidings for luxury brands, including LVMH, which has witnessed a perceptible shift in the overall vibe in recent months. However, this buoyancy comes amid challenges, as demonstrated by a seven percent dip in LVMH shares in October, primarily attributed to a slowdown in spirits sales, notably Hennessy cognac. The conglomerate, which enjoyed several record years in the post-pandemic luxury boom, now faces potential uncertainties. Despite this, LVHM remains confident, asserting its growth trajectory in an uncertain economic and geopolitical landscape.
In a broader context, the STOXX Europe Luxury 10 index experienced its most substantial quarterly decline since 2020, attributing the setback to uncertainties surrounding the European and Chinese economies. Retailers are increasingly observing a widening gap in spending patterns, with the affluent and “aspirational” shoppers diverging, the latter constrained by limited means to regularly indulge in high-priced items. These fluctuations underscore the intricate interplay of economic factors shaping the luxury market’s dynamics.
India’s luxury market. India’s burgeoning middle class, comprising 31% of the population, is a pivotal force driving the country’s expanding luxury market. A Bain & Company report highlights the potential for significant growth, projecting a 3.5-fold expansion by 2030, driven by a youthful demographic and an expanding upper and middle class. “The Established,” a cultural website in India, underscores the importance of culturally inspired collections, urging brands to align with Indian consumer preferences.
While leveraging Indian festivals, particularly Diwali, presents a lucrative avenue, there remains a gap compared to the global outreach seen during the Chinese New Year. Unlike luxury labels releasing globally accessible collections for the Chinese New Year, such a trend is yet to be established for India. Notably, even within India, the availability of Diwali editions from luxury brands is often limited, signaling an untapped potential for more expansive and globally accessible festive collections.
