Online shopping for luxury brands clicking with Indians

Online shopping for luxury brands clicking with Indians
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First Published: Tue, Mar 20 2012. 01 21 AM IST

Gaining ground:In November, 27.2 million people in India aged 15 or above accessed an online store, 18% more than in the previous year, comScore said in a report in December. By Priyanka Parashar/Mint
Gaining ground:In November, 27.2 million people in India aged 15 or above accessed an online store, 18% more than in the previous year, comScore said in a report in December. By Priyanka Parashar/Mint
Updated: Thu, Mar 22 2012. 02 47 PM IST
Bangalore/New Delhi: A lot more Indians are buying their Jimmy Choo’s and Roberto Cavalli’s online, often only because they can pull a neat bargain on high-end exclusivity.
Gaining ground:In November, 27.2 million people in India aged 15 or above accessed an online store, 18% more than in the previous year, comScore said in a report in December. By Priyanka Parashar/Mint
In November, 27.2 million people in India aged 15 or above accessed an online store, 18% more than in the previous year, digital measurement firm comScore Inc. said in a report in December. Although a bulk of the traffic went to discount sites, entrepreneurs, impressed with the value and volume of online shopping, see a potential for luxury labels gaining presence online, comScore said.
Genesis Luxury Fashion Pvt. Ltd, which represents top brands like Bottega Veneta, Burberry, Paul Smith and Jimmy Choo in India, has been expanding more on ground than online. But it is now weighing the e-commerce option. “In the case of international brands we are exploring the e-commerce framework to see how we can integrate with the respective brands’ global e-commerce platforms,” said Sanjay Kapoor, managing director of the company.
Or consider Singapore-based non-resident Indian Urvashi Sahay. She launched excluzen.com a couple of months ago. Its multibrand top-end and high-street luxury online showroom deals in brands such as Apple, Bang & Olufsen, Tag Heuer, Omega, Satya Paul, Just Cavalli, Rosenthal and Callaway. The site also offers services such as premium travel, hotels, shopping, nightlife, health and beauty, golf lessons and private charters.
Excluzen was born to fill in the gap of quality products and services in the online space, said Sahay, the chief executive of excluzen. “There is demand for quality and luxury products in India. For me, as a user, there was hardly any Internet site that gave me quality product or experience. We wanted to capture this opportunity for people living in India.”
Even excluzen offers discounts ranging from 15% to 45% depending on the product category. The most expensive item sold on excluzen last month was a Rs 2.25 lakh Tag Heuer watch that went for Rs 1.54 lakh.
The change in spending capacity and the mindset of Asian consumers is conducive for the luxury market now, Sahay believes. “Unlike our parents who would make a list of things to shop for, consumers today enjoy spontaneous indulgence, which spurs growth for luxury,” she said.
Abhay Gupta, CEO and founder promoter of the newly launched Luxury Connect could not agree more. The market, though nascent, has potential, he believes. “Earlier, only youngsters were experimenting with buying stuff on the Net. Now, even the mature customer is getting accustomed to e-commerce, opening up an avenue for premium and luxury labels,” he said.
Indians have gradually embraced luxury. According to international market researcher Euromonitor, the luxury designer clothing market in India grew 34.5% to Rs 9,767.4 crore in 2011. Luxury electronic gadgets grew at 36.7%, and the luxury jewellery market at 42%.
AT Kearney Inc.’s study of the Indian luxury market for last year also shows a 20% growth. In almost all the 12 categories the company measured, the actual growth exceeded estimates.
Online shopping in India is set to explode. Indians are likely to spend $84 billion on online stores by 2016, compared to the $7 billion they spent in 2010, Boston Consulting Group predicted in a report released on Monday. That’s not all. Online sales will account for 4.5% of the total retail sales in India by 2016, from 0.9% now, it said in the report titled ‘Connected World Series’.
Online luxury stores are seeing a steady growth. 99labels.com, which sells discounted luxury products, claims to be growing at 20% a month. The website sources unsold inventory from brands such as Burberry, Versace, Michael Kors and Roberto Cavalli to sell online. Ishita Swarup, founder and chief executive, said people mostly buy online because of the deep discounts on offer.
Willis Shah, a 30-year-old who stays in Mumbai’s Malad suburb, for instance, wouldn’t have bought Apple Inc.’s MacBook computer from Exlcuzen.com if he hadn’t spotted a discount. “Initially, I was sceptical to buy the MacBook online but... price points were cheaper by Rs 1,500 over other sites. So I was tempted to make the purchase,” he said.
The bargains are precisely why luxury brands have stayed away from e-commerce, because they do not wish to be seen as discount brands, said Luxury Connect’s Gupta. “Most brands, even in the mature markets, have a marginal presence online as they are worried about the environment, the adjoining brands on the platform and other such issues. However, some of them are slowly moving online,” he said.
Adrian Terron, executive director (retailer and shopper) at the information and measurement company Nielsen India, earlier said luxury brands have grown in the country because they have become more accessible.
But nascent online payment systems have hampered the luxury e-commerce story in India. Consumers who buy large value goods tend to shy away from online consumption; they research online and purchase offline, said Arvind Subramanian, partner and director, The Boston Consulting Group. They also look forward to a high level of service attached to the physical experience of luxury shopping.
At present, there are no pure-play luxury e-commerce companies in the country. Neelesh Hundekari, principal and head, luxury and lifestyle practice, at AT Kearney India, said hi-end luxury e-commerce in India is nothing to write home about. Tissot, for instance, advertised that its watches cannot be purchased online.
Titan Industries Ltd, makers of watches, jewellery and eyewear, is launching an integrated e-commerce platform. But its Nebula range priced at Rs 3 lakh and above will not be sold online. “There is a charm associated with luxury shopping in the brick and mortar space, hence e-commerce is a non-driver for us in the luxury space,” said Harish Bhat, chief operating officer, Titan.
Excluzen’s Sahay, though, is upbeat about the future of luxury e-commerce in India. “Simpler payment gateways, lower duties on luxury could drive this market. However, the biggest game-changer could be bank schemes that extend credit and allow users to purchase products on equated monthly instalments.”
byravee.i@livemint.com
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First Published: Tue, Mar 20 2012. 01 21 AM IST
More Topics: Mint Luxury 2012 | Nielsen | BCG | Retail | Jetsetter |
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