How do India's ultra-rich spend their billions?

The answers may surprise you

Pankti Mehta Kadakia
Published: Nov 23, 2019 07:28:43 AM IST
Updated: Nov 25, 2019 12:05:01 PM IST

g_123995_luxury_spend_280x210.jpgIllustration: Chaitanya Dinesh Surpur

There’s that white-and-gold Hollywood-conjured image of life as a billionaire—the claw-footed bathtub and the gilded chandelier, the orchard-backyard and white-gloved butler—and then there’s 2019.

India’s wealthiest may not have the land to create sprawling mansions that are not of the vertical variety, and yes, they probably do have a desi butler and some shimmering light fixtures to boot, but those aren’t things that make it to their pride lists anymore. In fact, those factors are a bit of a given, an old-school way of life that the country’s noveau riche—and indeed, those fledgling tycoons now breaking out of their golden eggs—are growing bored of. As a travel writer once told me, “It’s almost downmarket now to holiday in Switzerland. It’s what your parents did back in the 20th century, or worse, a cheesy Yash Raj film cliché.”

India’s ultra-rich keep getting younger. According to a 2018 Kotak Wealth Management report, about 60 percent of India’s ultra high net-worth individuals (UHNIs) are under the age of 40, as compared to 47 percent the previous year. The young—and yes, perhaps more restless as a generation than ever—forgive themselves a lot of sins, but as they sniff for ‘likes’, living an insipid life is not one of them. 

Where do their billions find themselves then? Not as much in vaults and bonds, as was with their ancestors. The Kotak study finds that the country’s ultra high net-worth households (UHNHs) are spending more than they invest—in fact, UHNIs blow up 55 percent of their income on what the report calls ‘discretionary spends’, or whims and fancies.

The idea is, as the millennial mantra goes, to collect experiences, not things. So the growth in jewellery spends dipped to about 12 percent from 17 percent in the previous year, according to the report. Apparel and accessories formed the top spend, followed closely by travel. But it is no longer enough to just book a trip to London and stay at the Ritz. One must also be invited to dine with the Queen of England on her 90th birthday.

Yup. An Indian UHNI wanted to be at the birthday party of the century, and dialled the American Express India (Amex) concierge service, the exclusive perk that promises to grant your every wish if you’re part of the swish set. “While this was not a ticketed event, the Amex concierge was able to secure invites, that too at the seating closest to the Queen’s table during the event,” says a company spokesperson.

It's not about ownership, but investing in a state of mind. There is a growing appreciation for finding unique and unpredictable experiences.”
Mishti Bose, CEO, Quintessentially India


Similarly, another Amex client coveted a seat at another world leader’s birthday celebration, which probably sported a different party vibe. “The team secured invites to the restricted event for a card-member and his family in less than five hours. The Dalai Lama’s 80th birthday celebration was being managed by the Ministry of External Affairs, and not open to the general public,” the spokesperson adds.

“There’s been a huge change in the way people indulge themselves over the past decade,” says Mishti Bose, CEO, Quintessentially India, the country arm of the global luxury lifestyle concierge service, a membership service that reportedly counts Madonna and Richard Branson among its members. “It’s not about ownership anymore but investing in a state of mind. There is a growing appreciation for finding unique and unpredictable experiences, an attention to detail, a demand for better customer service. It’s about enriching your entire life, not just a certain aspect of it.”

India, she adds, is at the centre of this change. “India is seen as a critical consumption group across the world, and the growing list of billionaires is a good indicator. Their ability to spend across the world is extremely high. Indians are far more discerning as consumers now, used to a much higher level of service as compared to the West.”

Without blinking, Indians are dropping as much as €100,000 (approximately ₹79 lakh) for a single experience. Flying specially escorted Birkins around the world is a routine ask; now, the focus is on building up the V in VIP.

Bose says that in addition to gaining private audience with world leaders and global business bigwigs, the words ‘sold out’ are fast becoming redundant to India’s tycoons. “We have found ways to get them VIP access to top-billed music concerts, award nights, film premiers and private auctions, to name a few, even when tickets were not available,” she says.

According to Kotak Wealth Management’s data, spends on such events increased by 9 percent. While traditional hallmarks of luxury—watches and art—saw no rise in spending, that in electronics and vintage spirits climbed 9 percent and 4 percent respectively. Rare whiskey and wine, along with coins, topped the ‘objects of desire’ index plotted by Knight Frank’s Wealth Report 2019, with whiskey seeing a 12-month change in asset value touching.

“Values for certain old vintage rarities of single malt Scotch whisky soared past previous records, achieving almost unimaginable new auction highs,” the report said, adding that it’s in Asia where the trend seems to be accelerating fastest. Sales of Scotch whiskey to India rose by 44 percent in the first half of 2018—as compared to 35 percent in China and 24 percent in Singapore—with a leaning towards single malts.

“For some collectors, however, tracking down individual bottles is not enough,” the report says. “They want their own casks and are prepared to pay six-or even seven-figure sums to get them. Putting your own whisky into customised decanters created for you by a premium crystal-maker, and giving them to your friends in a stunning presentation box really is the ultimate gift.”

Gifting, long since beyond branded wallets and monogrammed belts, is taking the hyper-personalised route. A home-cooked meal for two hasn’t gone out of style, but it could likely be three-Michelin-star Italian chef Massimo Bottura pottering about in the kitchen. Bose recalls a case where a special pair of Japanese puppies, male and a female, made the trip to India in time for Valentine’s Day, for a couple to gift each other. And another, in which a husband wanted to gift his wife something “to cherish forever” for a milestone birthday.

“After a lot of thought, we came up with the idea of adopting three baby elephants in Indonesia for a year on her behalf, as she is passionate about the animal,” Bose says. “She got to choose each elephant’s name, and we gifted her a bunch of personalised gifts around the theme, including works from well-known African artists. I thought that was a fabulous indication of how thoughtful buying has become.”

(This story appears in the 27 December, 2019 issue of Forbes India. You can buy our tablet version from Magzter.com. To visit our Archives, click here.)

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