Indian Luxury Market Maybe Much Bigger

Indian Luxury Market Maybe Much Bigger
Innovation

We had covered Ledbury Research's estimate of the Indian Luxury market earlier. Ledbury Research had estimated that 53,000 households in this segment and predicted that it would reach 140,000 by...

Sukumar
  • 23 march 2006

We had covered Ledbury Research’s estimate of the Indian Luxury market earlier. Ledbury Research had estimated that 53,000 households in this segment and predicted that it would reach 140,000 by 2010. Interestingly, yesterday’s Times of India (TOI) reports that there are over 1.6 million households in this segment and is expected to jump to 3 million by 2010. If you dig further, Ledbury Research has used a $230,000 annual household income for the luxury segment (approx. 1 Million Rupees in today’s exchange rate) and TOI has used 45 Lakh Rupees annual household income for the luxury segment (approx $100,000 in today’s exchange rate). From my own observations and applying Economist’s purchasing-power-parity principle based Big Mac Index, I can say that the TOI’s definition seems more appropriate – 1 Big Mac in India is approx US $1.30 compared to US’s $3.06 giving a PPP ratio of 2.25, in other words US $ 100, 000 seems like you have US $225,000 in India which is magically similar to the $230,000 number used by Ledbury Research. Therefore, you may want to go by TOI’s interpretation and that makes the luxury market in India seem even more appealing.  BTW, Economist, could you please add India to your Big Mac Index?

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