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Premiumization in India: Redefining aspiration

From small towns to metros, an emerging middle class is seeking "value with a premium": better quality, better experiences, but still at the right price. This first of a two-part series examines what "premium" means in the Indian context

By Junqiu Jiang

Published: Jul 22, 2025 11:01:08 AM IST

Updated: Jul 22, 2025 11:55:40 AM IST

Premiumization in India isn’t about a select few splurging on ultra-luxury goods, it’s about a broad wave of consumers upgrading their everyday lives. Image: Shutterstock

The next wave of growth in India is likely to come from premiumization of the mass market, not merely the expansion of an exclusive luxury niche. The most successful brands are those that combine international excellence with localized strategies (e.g., a focus on local craftsmanship), to deliver premium experiences at scale. Premiumization, Indian-style, is about scaling the peaks of aspiration without losing the base of the pyramid. It is a critical and optimistic story of a country where hundreds of millions are eager to live better, and are willing to pay for it, as long as they feel they’re getting their money’s worth.

Premiumization in India isn’t about a select few splurging on ultra-luxury goods, it’s about a broad wave of consumers upgrading their everyday lives. From small towns to metros, an emerging middle class is seeking “value with a premium”: better quality, better experiences, but still at the right price. This first of a two-part series examines the big-picture trends powering India’s premiumization phenomenon, and asks: what does “premium” mean in the Indian context?

Macroeconomic Tailwinds for Premiumization

India’s economic and demographic trajectory is a major tailwind. By 2030, over 500 million Indians will move into the middle- and high-income brackets, with private consumption forecasted to surge from $1.5 trillion in 2018 to $5.7 trillion. Crucially, $2 trillion of that growth is expected to come from consumers trading up to more premium goods and services.

This macro shift is already visible. In food, 25% of incremental spending is expected to go to higher-priced goods; in personal care and beauty, 59% will be directed toward premium products. This shows consumers aren’t just spending more, they’re spending better.

A decade ago, “premium” meant niche products for the elite. That is rapidly changing. India’s middle class, projected to hit 580 million by 2030, is now the core engine of premium consumption. Urbanization and exposure to global lifestyles are accelerating the trend. By 2030, 40% of Indians will live in cities, further expanding access to modern retail and global brands.

Even amid economic headwinds, premium categories have remained resilient. NielsenIQ reports that premium FMCG brands are growing nearly twice as fast as mass-market ones, now accounting for 27% of FMCG sales and driving 42% of the sector’s value growth. This suggests structural durability: a widening slice of consumers are willing to pay for quality.

The New Indian Consumer: Aspirational Yet Value-Conscious

But don’t mistake this new premium shopper for a blindly loyal brand evangelist. Today’s affluent Indian shopper is often less brand-loyal and more discerning. The new generation consumers are ready to experiment and explore products which have strong craftsmanship behind them and won’t pay a premium just for a logo. The product needs to deliver authentic quality, storytelling, or a unique experience. They seek craftsmanship, authenticity and an “immersive journey” with premium purchases, not simply status symbols. This marks a shift from the past: a prestige label alone is not enough to command loyalty unless backed by value as perceived by a savvy consumer.

Crucially, “value” remains a cornerstone mindset even among premium shoppers. Indian buyers still love a good deal – they want premium but also practical. This means they evaluate features, quality-to-price ratio, and alternatives before parting with extra cash and companies see success by catering to both mass and premium segments. In practice, that has meant launching premium innovations even in everyday categories (like air fresheners and home insecticides) that offer greater convenience or efficacy, thus justifying a higher price. Indian consumers will pay more if they genuinely perceive added value. For example, an anti-roach gel that actually solves a pest problem, or a face cream with proven results, even if it costs several times more than the basic version.

Also read: Luxury food players bet big on India's appetite for fine things

Global Outlook, Local Sensibilities

India’s premium consumers are globally aware, digitally fluent, and increasingly uncompromising. They no longer wait to travel abroad for access to premium brands—they expect them at their fingertips, online and offline. Yet they also demand local relevance. A “one-size-fits-all” global strategy no longer cuts it.

Smart brands localize without diluting. German automakers, for instance, offer India-specific entry luxury models and financing options. Global skincare and food companies adapt with smaller pack sizes and India-specific ingredients or pricing. It’s not just about import—it's about intelligent adaptation.

In this respect, premiumization in India is not about exclusion but inclusion. It's aspiration without alienation. To succeed, upscale brands must design for the cultural and economic nuances of India’s new middle: brand-conscious, tech-savvy, and fiercely value-driven.

Premiumization Redefined

So what is premiumization in India? It’s not just about fine wine or fashion—it’s about better living, at scale. It’s a ₹300 artisanal cappuccino instead of Nescafé, a ₹1,000 salon facial over a ₹100 cream, or a 4-star resort over a budget motel. It’s about better chocolate, better refrigerators, and better public spaces—from recliner-seat cinemas to curated retail experiences.

In short, it’s not “luxury-for-the-few,” but “better-for-the-many.”

Take beauty: India’s mass-premium boom is reshaping the category. Tiered services, accessible luxury brands like Charlotte Tilbury or Estée Lauder, and booming platforms like Nykaa show how beauty is being redefined for mass affluents. India is now on every global beauty company’s radar, highlighting luxury brands as the fastest-growing segment.

This evolution is visible well beyond metros. Premiumization is becoming a pan-India phenomenon, thanks to digital commerce, social media influence, and rising local incomes. The aspirational consumer in Lucknow or Coimbatore is not far behind their Mumbai or Bangalore counterpart.

The Takeaway

Premiumization in India is not a luxury bubble—it’s a mass movement. It’s about scaling aspiration across cities, towns, and income brackets. The real opportunity lies not in gold-plating products for a tiny elite, but in crafting better versions of everyday experiences for millions.

The brands that will win are those that understand this: that in India, “premium” must always mean “premium enough to justify the price.” In Part 2, I will dive into different sectors and unpack what it takes to capture the next wave of premium consumption in India.

Juniqu Jiang is an Assistant Professor of Marketing at ESSEC Business School.

This article is the first of a two-part series, exploring premiumization in India. The second article, which delves into trends across specific segments, will be published in August 2025.