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Ecommerce boosts Indian luxury market

News, 10 December 2014

HYDERABAD: Ecommerce is expanding the Indian luxury market, as online access and competitive pricing bring hitherto unattainable brands and products within the reach of consumers in the country's lower-tier cities.

Online fashion sales have been one of the drivers of Indian ecommerce, with the sector witnessing some consolidation this year as the major players have acquired, or are seeking to acquire, rivals. Now, niche players are targeting the top end of the market with designer labels and premium products.

"There are two reasons why these e-commerce players will be successful in India," according to Sushmita Balasubramaniam, vice-president at market researcher IMRB International Retail.

"The first is that the Indian luxury consumers come from the tier two and three cities," she told the Economic Times. "Also, the ecommerce facilities will bring better prices to the consumers; this will be seen as one of the advantages of shopping online."

Different models are emerging, with some players opting to develop their own portals, and others to open bricks-and-mortar stores in tandem.

"Tying up with a marketplace model will not work for us though we were approached by a few players," said Nakul Bajaj, founder and CEO at Darveys.com, a portal which retails around 60 high-end accessory brands.

"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," he explained.

While price is always going to be most important for some consumers, others value service, and it this group that Stylista, a retailer of limited edition designer pieces, is going after.

"We will roll out our brick-and-mortar stores by mid-2015 where customers can try on pieces, meet designers and request customised fit on a product," said co-founder and CEO Avnish Chhabria. Orders, however, will have to be placed online.

Sunjay Guleria, the co-founder of Exclusively.in, originally set up to cater to the overseas Indian market, has ambitions in a different direction. "We would like to become the equivalent of an online mall for luxury products," he said.

Balasubramaniam observed that platforms could focus on differentiation or design, but in the end if they could not offer the touch and feel experience that many shoppers wanted, then "a discernible price advantage will help in compensating for that loss".

Data sourced from Economic Times; additional content by Warc staff