Luxury market poised to continue its upward growth trajectory!

Inputs from Siddanth Shetty - Vice President Business Strategy and Operations, AstaGuru Auction House

The global luxury market has been growing steadily over the past decade, and the trend is expected to continue. Art is a significant category in the luxury market, representing a symbol of wealth and status, with collectors willing to spend millions on rare and unique pieces. Apart from art, other prized items such as heirloom jewellery, luxury watches, and antique and vintage collectables are also important categories that are highly valued and sought after.  

Art - an unconventional or non-traditional investment?

Over the past few decades, the art market has emerged as a lucrative avenue for alternative investments. According to the most recent KnightFrank report, the wealthy earned an annual return of 29 per cent on their art investments in 2022. Modern and contemporary art, in particular, has gained popularity among investors looking for assets that offer high returns and diversification benefits. This trend is due to the increasing globalisation of the art world, the rise of wealthy collectors, and the growing acceptance of art as an asset class.  

When it comes to India, the art market has witnessed phenomenal growth in the past few years. This uninterrupted progress, in a way, also challenges the notion of art being an unconventional or non-traditional investment.  

Recent market analysis reveals that Indian art sales in the public domain surged from Rs 13 crore in 2000 to Rs 880.9 crore in FY21, indicating remarkable growth. Additionally, it is also noted that the Indian art market generated Rs 581.5 crore (USD 70.5 M) in revenue during the first half of FY 22-23. These statistics demonstrate an outstanding performance, which has also resulted in global acclaim and recognition for Indian art.  

Modern vs Contemporary Art Market 

“Modern Indian Art, which was shaped by the artists of the post-independent era, holds a special place among collectors. From the works by early masters of Bengal and Maharashtra to the dynamic Progressive Artists’ Group, is enthusiastically acquired by art collectors,” says Siddanth Shetty - Vice President Business Strategy & Operations, AstaGuru Auction House. 

On the other hand, Contemporary art in India is thriving with a dynamic generation of innovative artists. In the calendar year 2022, AstaGuru offered over six hundred works of modern and contemporary art in a range of mediums and generated a total sales value of around Rs 27 crore. There has also been a rise in young collectors entering the art market, particularly those under the age of 40. This trend is driven by a desire for unique and personal investment opportunities.   

However, when it comes to investing in the luxury market, the emergence of other non-art categories has opened a range of options for collectors. Although people collect art for its aesthetic beauty, items such as heirloom jewellery, luxury timepieces, and vintage collectables are highly sought after for their rarity and heritage value.  

For instance, heirloom jewellery is a symbol of heritage, craftsmanship, and history, making it a desired possession for many collectors. While it also holds sentimental value due to being passed down from generation to, the high-quality materials and craftsmanship as well as the uniqueness and rarity of their design also add to the allure. Heirloom jewellery often has an interesting story or provenance attached to it, further increasing its value and desirability. In the year 2022, the sale of heirloom jewellery in the Indian auction market was recorded at approximately Rs 29 crore, which indicates a growth of 75 per cent from 2020 when the total revenue stood at Rs 9.5 crore.  

“AstaGuru has grown in art sales in tandem with the non-art categories. In 2017, the overall market value was around Rs 12.5 crore and AstaGuru’s contribution to the same was 24 per cent. Whereas in 2022, the market was valued at Rs 37 crore and AstaGuru’s share stood at 68 per cent which is a dramatic increase in five years” adds Siddanth Shetty. 

Similarly, luxury watches have garnered an enthusiastic response amongst collectors in the non-art category. The rise of re-sale online marketplaces and auction platforms has made it easier for buyers and sellers to connect and transact to purchase in the secondary watch market. AstaGuru auction house has seen a jump in the watch auction category by more than 174 per cent compared to 2020 with a 66 per cent CAGR year on year reflecting a huge growth potential. (Entire resale market of India which includes retail plus auction)

As per the Knight Frank Luxury Investment Index (KFLII) 2022 report, the category of luxury watches took third place on the luxury index list with an 18 per cent annual appreciation on investment.  

The thriving luxury watch market is fuelled by collectors who appreciate the history, craftsmanship, and rarity of vintage and limited-edition models from some of the world’s leading luxury timepiece brands such as Rolex and The Holy Trinity of Watches - Audemars Piguet, Vacheron Constantin, and Patek Philippe.  

Based on the substantial growth of the luxury market it can be said that India’s wealthy are likely to continue to purchase art along with other luxury collectables such as jewellery, watches, opulent home décor and other rare artefacts. The same enthusiasm can be followed amongst the collector community who often look to acquire luxury through auctions, therefore, cultivating a promising market in 2023 as well.