Luxury market seen returning to steady growth as AI reshapes consumer buying
New Delhi, July 10
The global personal luxury market is expected to return to steady growth in FY26 after a period of slowdown, supported by a stronger consumer base and the increasing use of artificial intelligence in the buying journey, according to a report by Boston Consulting Group and Altagamma.
The report projects the personal luxury market to grow by 2-5 per cent in FY26, with growth expected to accelerate to 4-7 per cent by 2029, driven by a more balanced consumer mix, stronger customer retention and rising domestic spending.
"After a period of reset, luxury is back on track, but on a healthier and more balanced foundation. The next growth cycle will be driven by a more balanced consumer pyramid, deeper client relationships, broader lifestyle spending and local wealth," said Filippo Bianchi, BCG Managing Director and Senior Partner, Global Head of Luxury.
The report said India is to benefit from these changing trends as rising affluence, digital-first consumers and evolving buying behaviour reshape the country's luxury market.
It noted that consumers are placing greater emphasis as self-reward, time, health and longevity over traditional status-driven motivations, creating new opportunities for luxury brands.
Abheek Singhi, Managing Director and Senior Partner at BCG India, said, "India's luxury market is evolving beyond aspiration to appreciation. Consumers are becoming more intentional in their purchases, placing greater emphasis on quality, craftsmanship and lasting value. At the same time, AI is becoming an integral part of the purchase journey."
The report also highlighted the growing role of AI in the luxury sector. Nearly 90 per cent of luxury consumers now use AI or generative AI tools every week, while 79 per cent already use AI to research, compare and evaluate luxury products and experiences before making purchases.
At the same time, around 60 per cent of fashion and luxury companies remain at emerging or stagnating levels of AI maturity, indicating room for further adoption.
According to the report, the luxury market is entering a new growth cycle where stronger customer relationships, changing consumer preferences and wider adoption of AI are expected to shape future business strategies and long-term growth.
— ANI
Reader Comments
Rising affluence in India is real, but let’s not ignore the inequality that persists. While luxury brands celebrate 2-5% growth, many still struggle with basic needs. Hope this ‘balanced consumer pyramid’ includes thoughtful spending on local artisans too, not just imported labels.
AI transforming luxury shopping is no joke! I used a chatbot to pick a birthday gift for my wife—it saved hours of browsing. But 60% of luxury firms stuck at low AI maturity? That’s surprising for India’s tech-savvy market. Time to upskill!
Interesting that consumers now value self-reward and health over status. As a young professional in Bangalore, I’d rather spend on a quality watch that lasts a decade than a flashy bag that’s out of style next season. AI helps me make that call!
It’s fascinating to see India becoming a key player in luxury. The blend of digital-first consumers and AI-driven buying mirrors trends in the West. However, brands must ensure they don’t lose the personal touch—nothing beats a human recommendation in a boutique!
As someone who works in retail tech, I’ve seen firsthand how AI assistants boost conversion. But for India, the real opportunity is in ‘phygital’—blending online AI tools with offline experiences like premium lounges. That’s where the luxury magic happens!
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.