India believes in going big when it comes to celebrations, more so, wedding celebrations. The Indian wedding industry, valued at US$130 billion, drives immense economic activity, with an average Indian spending twice as much on wedding as compared to on education. According to a report by Jefferies, the average expenditure on a wedding at US$15k, is a multiple of per-cap or household income. “Interestingly, an average Indian couple spends approximately 2x on weddings vs education (pre-primary to graduation), in sharp contrast to countries such as the US where the spend is less than half vs education,” it stated. When compared on a global lens, Jefferies said that India’s wedding market is nearly double the size of the US although still smaller than that of China.
Besides, India is also the largest wedding destination globally, with 8-10 millions weddings taking place each year, with 34 per cent of the total population falling within the marriageable age of 20 to 39 years, and an estimated 280 million individuals currently unmarried.
Wedding spends are also concentrated in certain months and the two distinct peak periods are – November to mid-December and mid-January to July – which is often referred to as the ‘Wedding Season’ in India. “Economic activity across India surges during the wedding season, especially during the first peak period which also coincides with the festive period in India, and sector beneficiaries track this closely,” Jefferies stated.
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As lavish as it can get
Interestingly, Indian weddings are multi-day and multi-event celebrations, ranging from simple to ultra lavish, with region, religion and economic background playing a critical role. A lavish wedding includes exotic domestic and international locations, luxurious accommodations, lavish catering with menus curated by Michelin star chefs and performances by professional artists & celebrities. Luxury weddings in India typically have guest counts on average ranging between 300 and 500 people. The average expenditure for luxury weddings falls within the range of Rs 20 million to Rs 30 million (~US$200k to ~US$400k USD), with the higher end of the luxury wedding spectrum often exceeding these figures by several multiples.
It is worth noting that India being an otherwise value-conscious country, weddings in the country stand out for their grandeur, especially relative to income and wealth. According to the Jefferies report, the current average expenditure per wedding of approximately Rs 1.2 million (~US$14.5k) is 5x India’s GDP per capita of ~US$2.9k and greater than 3x the average annual household income of ~Rs 0.4 million (~US$4.5k). Interestingly, this spend is nearly 2x the total amount spent (including both the bride and groom) on nearly 18 years of education in India from pre-primary to graduation (US$8k / ~Rs 0.6 million). As a comparison, the wedding spend/ education spend ratio in the US is only 0.5x for public education and 0.1x for private education.
Consumption surge for weddings across key categories
Now, how does the consumption surge during the wedding season? The wedding industry spurs consumption in categories like jewellery, apparel, catering services, photography & decorations, entertainment, wedding planning, etc. It also indirectly fuels various sectors indirectly and these include automotive and consumer discretionary. Besides purchasing cars and two-wheelers as wedding gifts, the industry also witnesses a surge in sales of consumer electronics such as high-end televisions, smartphones, and home appliances. Additionally, home improvement sector beneficiaries such as paint manufacturers also witness a surge in demand as families invest in renovating homes.
From a spend perspective, wedding jewellery typically accounts for the largest proportion of the wedding spend, making up approximately a quarter of the total spend followed by catering at nearly 20 per cent and events at around 15 per cent, etc.
Weddings are a key demand driver for the jewellery industry with 50- 55 per cent of the total market by weight being wedding jewellery, followed by daily wear at 35 per cent and fashion wear at 20 per cent.
Next is the US$84 billion apparel retail market, wherein around 11 per cent of sales is led by wedding and celebration wear, bulk of which are driven by the former. This includes apparel not only for the bride and groom but also for the families, friends and even the guests.
Predominantly unique to Asian countries, match-making is another industry gaining prominence. Then, there is wedding planning which is a multifaceted task which not only requires intricate planning and execution but also the knowledge of navigating cultural traditions and familial expectations. Wedding planners typically charge a percentage of the wedding budget as fees, which ranges between 8- 10 per cent.
Stay and travel is another large expenditure in a wedding, given the large number of guests involved, many of which are outstation guests. Further, with the growing trend for destination weddings, demand for hotels and travel has grown further. Leading hotels chains such as IHCL, EIH, Chalet Hotels and airline companies such as Indigo, SpiceJet, etc. are key among listed companies. According to the 2023-24 wedding industry report by WedMeGood, 21 per cent of the surveyed couples had destination weddings, up from 18 per cent in 2022. Popular domestic destinations include Goa, Udaipur, Jaipur, Kerala and Uttarakhand, while popular international destinations include Thailand, Bali, Italy and Dubai to name a few.
Photography and decorations are yet another expenditure, with experienced photographers available across all budgets ranging from Rs 10k per day (~US$ 120 per day) to Rs 0.5 million per day (~US$ 6k per day). Decor, meanwhile, typically makes up 5 per cent to 10 per cent of the total wedding budget. Wedding decor typically includes intricate floral arrangements, colorful drapes, lights, candles and other decorative elements.
Jefferies further stated that service providers to the wedding industry largely fall in the unorganized and highly fragmented category, consisting of many small scale businesses and individual service providers who cater to both low and high spenders.
From: financialexpress
Financial News
