Recession & Luxury Lifestyle

Recession has impacted the luxury life style of wealthy people of India. Rich people of India are very smart. Even during the time of recession, they are not compromising with their luxury lifestyles. But they have find the alternative luxury brands to maintain their life styles.

Here are few sectors which I will discuss about in this article.

01) Luxury Automobiles sector

02) Demand for Yachts

03) Luxury Brands

04) Luxury Vacations

In the all of the above sectors, rich have find out their own way to maintain their luxury lifestyle. Here is how.

01) Luxury Automobile Sector -

- The Luxury Car Market is growing even during the time of recession because of the lowering of duties in some cases and easier regulation for automobiles have encouraged and inspired luxury automakers to launch their vehicles in India. Like anywhere else in the world, cars are one of the most visible symbols of a country’s high spending customers.

Let’s take the example of 2 Luxury Brand Motorcycles (Bikes) – Ducati & Suzuki.

Ducati’s progress has been slow. It has sold around 20 super bikes in India in the last 1 year. In comparison, Suzuki sold 74 super bikes in the last 3 months only. The reason is simple. Ducati’s price tags range from Rs.14 lakh to Rs. 48 lakh. And Suzuki super come for a more affordable Rs.12.5 Lakh.

- Another case is of German Car maker BMW. BMW has sold more 3 series & 5 series cars rather than 6 series and 7 series cars. During the time of recession, the rich customers of these Brands want a true value deals.

02) Demand for Yachts & private jets -

Both the Yachts & Privet jets are the status symbols of Money & Power. And that’s why their demand in wealthy people is more. Previously the average budget for a private boat was Rs.30-40 Lakh in year 2005. But this budget shot up to an average Rs.10-12 crores just before the recession.

But because of the recession, the Business of selling boat is down by 30%. The HNIs are looking for a bargain that could be as high as 20%.

In case of private jets, HNIs have cancelled the contracts of private jets. But instead Fractional ownership programmes has been surge during the time of recession. Because it gives you all the benefits of aircraft ownership and more, like 365 day a year guaranteed availability which even your own aircraft can not do as it will require maintenance.

The Bjets (Private jets company) has 5 aircraft in operations in India and Southeast Asia and will have at least 10 aircraft by the end of the year.

03) Luxury Brands -

- Some HNIs are maintaining the same life style as that of before recession. The reason is very simple. Those who are rich in the true sense have enough reserves to maintain their lifestyle. They are thus not so impacted by these market dynamics.

There is a certain shyness that has come in buyers. Even those who can afford very discreet in their shopping experiences. Many brands have introduced customers to spend less wothout forsaking luxury brands. Impulsive shopping has come down.

Goods that can be justified as an Investments, like watches and jewellery are still popular.

- Liquor Companies, typically perceived as recession proof are also seeing a dip sales of expensive brands. Liquor companies say that, people drink more when they are sad. But there is a catch. Though people drink more, they drink cheaper during recession. Expensive liquor brands have seen a dip in sales.

Recession has become more of a catch phrase. It’s a new fashion mantra in the social circles. some use it as an excuse to be fashionably cool.

04) Luxury Vacations -

- Rich people are also looking for value for money while enjoying their luxurious vacations.A new trend is emerging and many people are now mixing their holiday with playing golf so that their preferring places where both can be accommodated.

Cruises, which combine many destinations, are also seen as value for money luxury holidays. Another area which continues to grow irrespective of slowdown is the cruise segment.

- Luxury Spas such as Kaya Kalp & R the Spa did feel the slowdown during the winter  but they are seeing an upswing now. Harnn, with outlets in 22 countries, opened its first centre in India recently