Spends: Attitudes, Motivation and the Ultra Wealthy Lifestyle

SPENDS
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. 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 income and wealth among many sections of Indian society. 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. The comparison across age groups coughed up what, at first glance, appeared to be a bizarre statistic: 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. 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. 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. 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. 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 probably be 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.

Ultra HNIs and spending

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!"

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

Inheritors

Self-made

Professionals

Expenses
21.5% 20.0% 28.8%

Investment in primary business

30.2%

32.6%

15.9%

Savings

19.0%

20.1%

20.8%

Investment for growing personal wealth

18.9%

18.6%

21.6%

Charity / Philanthropy
6.2% 4.3% 10.4%

Others

4.2%

4.4%

2.5%

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

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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. Ultra HNIs who are active or very active 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. 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

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, 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. Following closely are items such as domestic and international branded wear, high-end cameras, and luxury leather products. Ultra HNIs prefer to spend more on products meant for the family
A significant portion of overall expenditure goes into customised holiday packages, luxury watches, jewellery, and household electronics.

Vintage spirits 52 Home decor / Crystals 57

Art / Artefacts 36

Household electronics 90 Luxury watches 98 Jewellery / Precious stones 90 Exclusive holiday packs 100

Luxury writing instruments

56

Apparel / Accessories 73

Note: The data values have been indexed to Exclusive holiday packs. Source: T.O.P. India - Kotak Wealth & CRISIL Research

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Planned versus impulse purchase

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, 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.

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. 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. 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

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 driven by their own particular whim or fancy, but was more the result of family deliberations.

averse to bargain purchases. Apart from these categories, most buying is impulse-led. Most purchases are spontaneous, something catches the eye and I pick it up. I cant recall the purchase time and price, one respondent observed.

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

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

Exclusive holiday packs

Household electronics

Jewellery / Precious stones

Luxury watches

Home decor / Crystals

Vintage spirits / Liquor

Apparel / Accessories

Luxury writing instruments

Art / Artefacts

82% 17%
1% Planned

67% 28%
5%
Impulse Both

57% 37%
6%

56%
43%
1%

54%
44%
2%

42% 58%

41% 58%
1%

39% 61%

38%
59%
3%

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

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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. 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. 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.

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.

Travel
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 as their topmost priority. Professionals have a penchant for travel

143

Professionals

100

Overall

94

Inheritors

91

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

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. A majority of the ultra HNIs travel at least twice a year, while about 1520 per cent of the Inheritors and the Self-made travel thrice or more

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annually. For the Inheritors and the Self-made, the most common Ultra HNIs in Mumbai spend far lesser on travel 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
Other cities

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

116 100
Bengaluru

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

99

work.
Mumbai

99 91
Note: Data values for the cities are indexed to All India. Source: T.O.P. India - Kotak Wealth & CRISIL Research

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

33

54%

13

%
36%

8%
10%
Source: T.O.P. India - Kotak Wealth & CRISIL Research

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

Once a year

Twice a year

Thrice a year

More than thrice a year

No fixed frequency

1-2 days

11.1%

3 days - 1 week
24.2%

30.0%

15.4%

41.7%

22.2%

1 - 2 weeks

54.5%

59.2%

76.9%

41.6%

33.4%

More than 2 weeks

15.2%

8.3%

7.7%

16.7%

11.1%

Not fixed

6.1%

2.5%

22.2%

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

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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 luxury hotels.

Luxury watches
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. Even in this high-tech age, luxury watches still easily outrank expensive electronic gadgetry such as luxury mobile phones in terms of aspiration. 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 reflect 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

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Luxury watches are a coveted item for Inheritors

Jewellery a traditional fascination for Inheritors

96 109
Self-made

73
Inheritors

100
Professionals

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

80
Inheritors

110

93

Self-made

in Mumbai or Delhi, although the aspiration for them is quite high in other Tier I and Tier II cities.

100

Overall

Jewellery and precious stones

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 value diamonds 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. 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.

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

Ultra HNIs in Delhi are relatively the biggest spenders on jewellery

Delhi 111 Bengaluru 91

Other cities 109 All India 100

Mumbai 93

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

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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 in the 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.

In February last year, in Aurangabad, while working out at a gym, a citybased 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. 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. 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

Luxury cars
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.

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

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Japanese brands the most trusted cars for Indian roads

HONDA

64%

TOYOTA

52%

SUZUKI (MARUTI)

36%

Other brands

HYUNDAI

31%

SKODA

24%

MERCEDES

17%

BMW

12%

MAHINDRA

11%

CHEVROLET

11%

FORD

9%

VOLKSWAGEN

6%

TATA

6%

MITSUBISHI

5%

Note: Ultra HNIs have multiple car ownership. Hence, the percentage values do not add up to 100. Source: T.O.P. India - Kotak Wealth & CRISIL Research

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

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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.

Ultra HNIs in Bengaluru relatively the lowest spenders on household electronics

Other cities

109
Bengaluru

Household electronics
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. 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. 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.
Delhi

96

Mumbai

98 100
All India

100

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

appliances and gadgets at home can be operated through remote control. The potential luxury electronics market in India was estimated at ` 51 billion in 2010-11. Although the market in India for luxury mobile

Household electronics resonate more with Professionals

100

109 86
nals
Self-m ade

133

Professio

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

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

Overall

Inher itor

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

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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.

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 Professionals spend a relatively lower portion of their income on dressing, and they show no particular proclivity towards either domestic or international brands. 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

Apparel and accessories

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.

market. International brands, with the exception of Canali, have by and large stayed away from the Indian wear market. Ultra HNIs in Mumbai are bigger spenders on apparel and accessories
Delhi 84 Bengaluru 100 All India 100

Other cities 92 Note: Data values for the cities are indexed to All India. Source: T.O.P. India - Kotak Wealth & CRISIL Research

Mumbai 119

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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 fivestar 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.

Professionals show the lowest inclination to spend on branded apparel and accessories

Inheritors

107

Self-made

100

Overall

100

New trends in spending

Professionals

77

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

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

circuit. So, marriage in Canada, reception in Morocco, and honeymoon in Thailand is not a novelty anymore.

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Even losing has its virtues, apparently. One ultra HNI talked about how Ultra HNIs in Mumbai relatively the highest spenders on home dcor
Delhi Mumbai Other cities All India Bengaluru

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

91

118

107

100

83

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

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.

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. 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. 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 skyjumping 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 multimillion dollar celebration involved 600 guests from 26 countries being ferried around on chartered jets.

Ultra HNIs in Delhi and Bengaluru spend relatively less on luxury writing instruments

All India

Delhi

Mumbai

Bengaluru

Other cities

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

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