India is a place that has a historical background of being a price-sensitive nation. For that, products that were popular in India were the ones which are cost sensitive and of high utility value.

But in the recent decade, things have started to change as the rising middle class of the country is becoming aspirational, and the affluent section of the nation is becoming more focused on high-end spending. Products that have a brand value are now getting popular. Thus emerges the start of brands like Starbucks as a premium coffee joint to fashion brands like Gucci are now becoming popular.

The rising financial options of the country are a reason for this major shift in purchasing habits. People are now looking at the trends and are making purchase decisions, which helps to signify their status and wealth in society.

In this blog, we will look into some of the possible reasons for the rising affluent class and what is propelling this growth toward luxury products within the Indian consumers.

COVID-19 and the Start of the Consumption Shift

During the phase of the pandemic, people suddenly lost access to their daily locations and their places of visit for months, and this created a pent-up demand within thee consumers. Economists and people from the banking industry refer to this as “revenge shopping.” Here, individuals, after the lockdown phase, went on a shopping spree where they started to use the fund for leisure activities.

Brands have captured this trend and used smart and promotional marketing tactics to cherish this behavior and make them addicted to this habit of consumption. With the right financing tools from a loan agency, people now can easily get personal loans and credit cards that help to make the purchase affordable for the new consumers in the market.

The Rising Middle Class in the Economy

The next reason for this spending in the luxury segment is the rising group of middle class. It’s the group of people who are first-time earners and have started earning in recent times. With the sudden influx of cash, this group of people is making purchase decisins which are more towards fulfilling their desires.

The first pair of Air Jordans looks tempting, and therefore, these new earners are the ones who can get their hands on it in the first place. The trend of getting the “coolest” thing within the peer group is the common motivating factor that brings aspiration among people. The same pattern can be observed in the 1980s in China, and thus, the role of the rising middle class is essential for increasing the consumption habits of the country.

The Aspirational and Status Value of Products

Now, the products and services that are coming into the country are also new as the brands that were previously outside the country are now flocking to the country to tap into the new class of aspirational buyers. The rise in travel is also another reason which shows the rise in consumption.

The new Gen-Z and millennial workforce loves to take breaks from their work, go on vacations, and spend some time traveling. Therefore, the brands are also targeting this group for their product sale and increasing market share in the sector. One such example is the motor brand “Royal Enfield” as it has a youth-centric approach and, therefore, is one of the reasons for the growth in this market.

Financing Options to Make Big Purchases Possible

The holy grail of all purchases is the flexible financing option, which allows first-time buyers to go for the easy EMI options, and that makes these purchases happen. An individual who is making these purchases either using consumer loans or a personal loan with the help of a DSA app from India or some other agents who are connecting these people to the right lender.  

The rise of the credit card market and the products that are now available at the fingertip of the person is making a person access the market 24/7. It, therefore, promotes the chances of impulse buying and debt-fueled growth in the market. A person who loves to get their favorite sneakers, t-shirts, or jewelry can check the options online, find the right seller, and buy them immediately.

Thus, the affluent section of the country is getting more prone towards organized markets and luxury products which is increasing the total addressable market of the company.