It has been evident from our long human history that luxury has been present in one or other form of consumption practices and that the luxury goods have existed for ages, dating back to Roman times, where luxuries such as silks were consumed for status, respect, and pleasure to the reformation in Europe (during the 1600s), where luxuries were consumed secretly, since their extravagant nature seriously compromised consumers' modesty and equality, important values at the time. Since the early 1990s, the luxury goods sector has been growing at an unprecedented pace. The Indian market for luxury goods has proved to be a very lucrative market and the rate of growth has outpaced that of other consumer goods categories. According to the ASSOCHAM-KPMG study, the Indian luxury market growth is estimated at 30 per cent and projected to reach $14 billion by 2016. This rate of growth has been triggered by accelerating influence of the affluent class, high net worth individuals with an appetite for luxury good consumption, ever growing middle class population, sophisticated consumers with a desire for exclusive products and several other related factors. But, still it is in a nascent stage of development in India and presently estimated to have just one-two per cent share in the overall share of the global luxury market. While the Indian market for luxury goods depicts business opportunities, it is also accompanied with a lot challenges which necessitates formulation of a strong legal structure and framework of intellectual property protection.
A key dilemma here in this scenario is that unless one understands the Indian Luxury market from various perspectives like key supply side/demand side trends, international product segmentation policies and overall market drifts; it is hard to evaluate the present legal structures and economic policies. Possible explanations for restrictive growth of Indian Luxury market would be (1) Constraints pertaining to Luxury Infrastructure, (2) Lack of policy support for Maximum Retail Price, (3) Not being viewed as policy/regulatory friendly by Luxury retailers, (4) High Import duties, (5) FDI policy of 30% sourcing tough for International luxury players (6) policies regarding Intellectual property rights, (7) Measures taken for the presence of counterfeit luxury goods and (8) Emergence of channels- Online and Grey.
