BackLifestyle International to launch online retail venture by 2016
Dubai-based retailer expects the portal to account for 5-7% of the company's sales in less than five years
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Bengaluru: Lifestyle International Pvt. Ltd, the owner of departmental store Lifestyle, home goods store Home Centre and fashion brand Max, will launch Landmarkshops.in by early 2016, to sell branded apparel, home furnishing and accessories online.
Currently, the company only sells its value-fashion brand Max through third-party websites such as Jabong.
A consumer shift from offline to online, said a top executive at the company, is aiding growth of online portals. “From a consumer point of view, there is a definite trend that we don’t wish to ignore," said Kabir Lumba, managing director at the company.
The Dubai-based retailer, which clocked a turnover of ₹ 4,600 crore in the latest financial year between its 44 Lifestyle stores, 20 Home Centres and 120 Max stores in India, expects the portal to account for 5-7% of the company’s sales in less than five years.
The company’s online foray in the country, on the lines of its United Arab Emirates portal Landmarkshops.com, has been in the works for over a year now. “We’ve been doing this for four years in the Middle East and the foray into India has been part of our strategy," Lumba said.
He said the online team will comprise 50-60 executives at the company’s Bengaluru office—hired from within the group and e-tailers such as Flipkart.com.
Devarajan Iyer, ex-head of Home Centre, is heading the company’s online retail venture. The site will allow users to shop for most brands that Lifestyle and Home Centre carry, apart from Max’s private label.
“Initially, it will be a pure e-commerce initiative, and over a period of time we will converge," said Lumba.
Lifestyle’s move comes at a time when Indian shoppers are increasingly shopping online for everything from gadgets to clothes, making it a $60 billion market by 2020.
The company joins a growing group of Indian brick-and-mortar chains such as Reliance Retail Ltd, Shoppers Stop Ltd and the Future Group that are trying to become better “omnichannel" retailers, driven by market share gains of online stores such as Flipkart, Amazon and Jabong, among others.
Earlier this month, departmental store chain Shoppers Stop said it would spend ₹ 60 crore over the next three years to push its omnichannel play. By 2020, Shoppers Stop is aiming at 15% revenue from digital sales.
“E-tailers have nudged the offline guys and enforced them to move online," said Sunita Sachdev, consumer and retail analyst at UBS Securities India. Sachdev added that the current scenario wouldn’t have emerged if it wasn’t for market share gains being made by e-tailers.
The popularity of online commerce has altered the retail ecosystem in the country, especially for brick-and-mortar stores that are planning expansion. Digital sales will decide how retailers open shops in smaller markets that have limited access to retail infrastructure, Lumba said.
“I think in the long run, companies will become choosy about the locations they pick to open stores... If markets are extremely weak, you will end up using e-commerce to service those markets rather than creating physical infrastructure," he said.
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