Say hello to the new Maharajahs: India is the next luxury hub
For a decade, China has been the engine for global luxury growth. China now accounts for 25% of global luxury spending, but this year, China’s growth has slowed to a trickle.
India today is a much smaller luxury market, representing 5% of global luxury spend, but it’s suddenly seeing explosive growth.
GDP growth, 8.2% in 2023, lit the touch paper. Next: the fireworks.
India is the fastest-growing major global economy. Political reform and a fast-growing, hyper-aspirational, young middle-class are driving India toward being the third largest consumer market globally.
The luxury and ultra-luxury sectors, across real estate, hospitality, apparel, accessories and automotive, are witnessing phenomenal growth. In BDA’s latest insight piece, we analyse the tremendous growth of luxury in India.
- India successfully rebounded from the disruptions of COVID-19 to emerge as the fastest-growing major economy
- By 2030, 25% of India’s population will be aged between 20 and 33, positioning India as the largest “young consumer market” globally
- The credit landscape has significantly shifted towards “buy now, pay later”, driven by an expanding ecosystem and increased discretionary spending
- The Reserve Bank of India is enhancing credit accessibility in underserved sectors such as agriculture, small and medium enterprises and housing
- India as a global tech hub has driven widespread adoption of digital payments, online shopping and social media engagement, prompting local companies to integrate new technologies to cater to evolving consumer demands
- India’s luxury market is set to more than triple by 2030, driven by a growing consumer base and increasing wealth, particularly from high-net-worth individuals
- India’s burgeoning high-end market is attracting global brands and incubating local luxury too
Download the full report for more insights on the luxury sector in India
About BDA Partners
BDA Partners is the global investment banking advisor for Asia. We are a premium provider of Asia-related advice to sophisticated clients globally, with over 25 years’ experience advising on cross-border M&A, capital raising, and financial restructuring. We provide global reach with our teams in New York and London, and true regional depth through our seven Asian offices in Mumbai, Singapore, Ho Chi Minh City, Hong Kong, Shanghai, Seoul and Tokyo. BDA has deep expertise in the Chemicals, Consumer & Retail, Health, Industrials, Services, Sustainability and Technology sectors. We work relentlessly to earn our clients’ trust by delivering insightful advice and outstanding outcomes.
BDA Partners has strategic partnerships with William Blair, a premier global investment banking business, and with DBJ (Development Bank of Japan), a Japanese Government-owned bank with US$150bn of assets.
US securities transactions are performed by BDA Partners’ affiliate, BDA Advisors Inc, a broker-dealer registered with the Securities and Exchange Commission (SEC). BDA Advisors Inc is a member of the Financial Industry Regulatory Authority (FINRA) and SIPC. In the UK, BDA Partners is authorized and regulated by the Financial Conduct Authority (FCA). In Hong Kong, BDA Partners (HK) Ltd is licensed and regulated by the Securities & Futures Commission (SFC) to conduct Type 1 and Type 4 regulated activities to professional investors. www.bdapartners.com
In the weeks following India’s lockdown to contain the spread of novel coronavirus (COVID-19), the chemicals sector has witnessed considerable short term volatility but is well positioned to benefit in the near future, given the decline in prices of key feedstocks, and COVID-19 related manufacturing shifts away from China. We have examined both the short-term and long-term factors shaping this sector in India, and where future opportunity may lie for corporates, private equity and private owners of business.
The BDA Chemicals sector team would like to share our latest findings with you.
Executive Summary
- India’s chemicals sector is the 6th largest in the world and has witnessed strong growth momentum over the last couple of years. Following global supply-chain disruptions and the government’s lockdown measures to restrict the spread of COVID-19, Indian capital markets experienced a significant decline in March 2020, and a subsequent rebound in April. Given the essential nature of the chemical sector, manufacturing operations resumed shortly after the initial lockdown, reflected by a moderate price impact for listed Indian chemical companies
- Even before COVID-19, global chemical manufacturing operations had already increasingly relocated to India from China, which will only continue after COVID-19 as more companies evaluate alternative supply chain solutions. Decline in crude oil prices since the beginning of this year will also have a significant impact on the raw material pricing from a short-term to medium-term perspective
- The short-term impact related to COVID-19 will disrupt the current year financial performance of companies until virus-related economic disruption is mitigated. However, companies with strong balance sheets and low debt levels will be well-equipped to operate through the uncertainty, likely emerging stronger and more resilient operations
- For unorganized players, the inability to adhere to strict social distancing guidelines for resuming operations have led to loss in business to large organized players
- Sectors like Specialty Chemicals, Agrochemicals and Pharma Intermediates will have limited impact given their essential nature
- Insights informed by BDA’s longstanding experience in the Chemicals sector highlights how M&A activity will evolve for corporates, PEs and private owners of chemicals business. We would see consolidation, new investments, and distress sale raise the level of M&A activity for corporates and private equity
Overall, we continue to see M&A activity such as growth capital and distress sales to continue in the short-term while consolidation will resume once the impact of the virus can be translated to the financials and future of the businesses.
Contact us
- Andrew Huntley, Senior Managing Director: ahuntley@bdapartners.com
- Kumar Mahtani, Managing Director: kmahtani@bdapartners.com
- Kunal Dattani, Vice President: kdattani@bdapartners.com
- Aditya Jaju, Associate: ajaju@bdapartners.com
About BDA Partners
BDA Partners is the global investment banking advisor for Asia. We are a premium provider of Asia-related advice to sophisticated clients globally, with over 24 years’ experience advising on cross-border M&A, capital raising, and financial restructuring. We provide global reach with our teams in New York and London, and true regional depth through our seven Asian offices in Mumbai, Singapore, Ho Chi Minh City, Hong Kong, Shanghai, Seoul and Tokyo. BDA has deep expertise in the Chemicals, Consumer & Retail, Health, Industrials, Services and Technology sectors. We work relentlessly to earn our clients’ trust by delivering insightful advice and outstanding outcomes.
BDA Partners has strategic partnerships with William Blair, a premier global investment banking business, and with DBJ (Development Bank of Japan), a Japanese government-owned bank with US$150bn of assets.
US securities transactions are performed by BDA Partners’ affiliate, BDA Advisors Inc., a broker-dealer registered with the Securities and Exchange Commission (SEC). BDA Advisors Inc. is a member of the Financial Industry Regulatory Authority (FINRA) and SIPC. In the UK, BDA Partners is authorised and regulated by the Financial Conduct Authority (FCA). In Hong Kong, BDA Partners (HK) Ltd. is licensed and regulated by the Securities & Futures Commission (SFC) to conduct Type 1 and Type 4 regulated activities to professional investors. www.bdapartners.com