Ever wondered why Indians buy an ultra expensive Louis Vuitton bag or a Ferrari? Well, the answer, recent research shows, depends on the age of the buyer.
To understand buying behaviour in India, a team headed by Dheeraj Sharma, a professor at the Indian Institute of Management, Ahmedabad, conducted in-depth interviews of 150 persons across three age-groups. Sharma, who shared an abstract of the study with Quartz, divided the sample into three groups according to their ages—those in their 40s, 30s and 20s. Each group had 50 members.
Those in their 40s, called GenX by the study, spent on luxury because of its functionality. It could be the quality, usability or even reliability of the product or the service.
Millennials want exclusivity
Those in the second group (GenY)—the 30-something-year-olds—said they buy luxury products because it makes them happy.
“It implies that GenY purchased luxury for reasons of self-identity and hedonism. In other words, uniqueness and rarity of product was most important to them,” Sharma said in a note.
The last group, the youngest of the lot, want exclusivity. They need to stand out among their friends and in their social circles. And so, Sharma said the price, investment, conspicuousness, and premium-ness of the product are the main drivers behind their buying decisions.
These findings are important for marketers when trying to target specific segments, the study says. The global luxury market is pegged to grow at 3.4% till 2020, touching $374.85 billion.
In India, the market has huge potential as personal incomes have seen a spike. In fact, it is one of the fastest growing luxury goods markets beating even China. The market here is estimated to grow at 86% between 2013 and 2018, according to Euromonitor.