Go Back

Luxury product companies' stampede in e-comm sites

The Economic Times:  December 10, 2014

Hyderabad: Niche players with designer products and premium offerings are checking into the crowded e-commerce fashion space to cater to a select clientele looking for a deal on their favourite labels. The growing customer base for luxury products coupled with the awareness of international labels and discounts are driving the business of premium products online.

The touch and feel of a product -the mainstay of luxury products -have been influenced by discount and easy availability of international brands and designer labels to a larger audience online. Customisation and after-sales services offered by some of the online players bring them on par with shopping at a high-end boutique.

"We will roll out our brick-andmortar stores by mid-2015 where customers can try on pieces, meet designers and request customised fit on a product, though orders will have to be placed online. We have our own manufacturing facility in Delhi and Mumbai for vertical integration," says Avnish Chhabria, co-founder and CEO of Stylista, which retails limited edition designer pieces by names such as Wendell Rodricks, Masaba Gupta as well as in-house high street fashion as part of Stylista Select range. The e-tailer raised Rs 5.5 crore from Rishi Khiani's in` novation fund Ant Farm earlier this year and has clocked in Rs 3.4 crore as revenue over the past six months.

The luxury market in India has been insulated from the market slowdown and has shown significant growth over the past few years. A report by IMRB International pegged the current marketsize for luxury in India at $10 million-plus with the luxury products segment growing at a CAGR of 21.8% in the past three years.

"There are two reasons why these e-commerce players will be successful in India. The first is that the Indian luxury consumers come from the tier-2 and 3 cities.Also, the e-commerce facilities will bring better prices to the consumers; this will be seen as one of the advantages of shopping online," says Sushmita Balasubramaniam, vice-president at IMRB International Retail. Though the reach provided by a large marketplace is incomparable, the deep discounting has led online luxury players to drive the discerning customer to their flagship sites by rewarding customer loyalty.

"Tying up with a marketplace model will not work for us though we were approached by a few play ers -you can't buy a Prada bag there. We retail the products at heavily discounted prices as we tie up with international boutiques that are authorised dealers of the luxury labels and hold inventory which they would like to sell," says Nakul Bajaj, 23-yearold founder and CEO at Darveys.com, which retails around 60 high-end accessory brands on its portal.

The portal charges Rs 1,000 per user to register following which they can see the prices for the curated collection. The price disruption invited legal notices from brands such as Christian Louboutin, Jimmy Choo and Burberry which have a footprint in India.

Stylista experimented with marketplace model at Jabong between March and June in 2014, currently it is exclusive to Myntra and Flipkart. "It is our discretion what products we choose to put up on the marketplace," says Chhabria.

After a brief association with Myntra's marketplace, the platform recently signed up a number of offline boutiques which can showcase designs and has a target of adding 100 retailers by end of 2014 to become a marketplace for premium labels.

"We would like to become the equivalent of an online mall for luxury products," says Sunjay Guleria, co-founder and executive director of Exclusively.in which was among the first online platforms serving the Indian diaspora in 2010. Though the market largely consists of Indian diaspora in case of ethnic collections or international buyers, the buyer base for luxe is showing a steady growth. "Presently, up to 70% of our sales are driven by buyers outside India though we expect the numbers to come down to 50% by January next year," says Guleria.Exclusively.in ships its products to nearly 150 countries. Stylista counts Brazil, UK, Australia and Canada among its major markets abroad. Value-for-money is definitely at the top of Indian luxury shopper's wishlist.

"Indians traditionally are value shoppers. Even if these platforms focus on differentiation and design, price advantages will be critical for the model to succeed. In this model, the shopper loses out somewhat on the shopping experience, `touch & feel' that is a critical part of apparel or accessory shopping. A discernible price advantage will help in compensating for that loss, to a large extent," says Sushmita Balasubramaniam.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

x IBEF : India Brand Equity Foundation