Luxury items 

The class has become massive: luxury brands True Blue sell products online; What does this mean to you? – BusinessToday

Geetu Uppal, a communications professional, had dreamed for years of owning a Prada bag and a pair of Chanel pumps. But the mere thought of the looks of death from the sales executives after inquiring about the prices of these products dissuaded her from even entering the stores. And his fears weren’t unfounded either, as there’s a popular adage that “if you have to ask the price, it’s too rich for you”. But recently, I saw her carrying her new Prada handbag to our last meeting. She humorously told me about her new online purchase and how she is now saving money for Chanel pumps, which she should be able to buy for her birthday in November.

Generally speaking, anything that is beyond the reach of the masses can be classified as a luxury item. While everyone has their own definition of what luxury is, expensive luxuries are something everyone finds desirable and yearns to own. Building on these aspirations, major e-commerce players in India have launched their luxury e-commerce stores over the past few years. With products ranging from clutches to watches and shoes to men’s three-piece suits, among other high-end products, they have collections from international fashion houses, from Jimmy Choo and Michael Kors to Salvatore Ferragamo and Emporio Armani, and in some case, even Indian fashion. Houses.

Consumption of luxury goods in India has been on the rise over the past few years, with luxury goods market revenue expected to grow by 1.63% annually between 2022 and 2027. From just $4.92 billion during the In fiscal 2016, the figure rose to $6.94 billion in fiscal 2019, according to Statista. Then it dipped to $4.58 billion in FY20 due to the effects of the pandemic, and rebounded to $5.19 billion and $7.52 billion in FY20. 21 and Exercise 22, respectively. It is expected to climb to $7.74 billion in FY23 and reach $8.16 billion by FY27 due to growing demand for luxury goods. Incidentally, while the majority of these revenues still come from offline retail, the contribution of online channels increased from just 3.5% in FY17 to 6.5% in FY21. , and is still expected to reach 10.1% by FY25.

And it’s Millennials and GenZs, with their higher incomes and exposure to luxury designers around the world, who are driving this trend. With the increasing acceptance of shopping for luxury goods, even a designer bag worth more than Rs 50,000 only touches the lower price bracket of the luxury market. And consumers willingly buy products that are worth far more than that. “Luxury is growing and should continue to grow. In the past it was an aspiration, but today you have Indian designers selling bags etc. at a price that has increased significantly,” says Rajat Wahi, Partner-Consulting at Deloitte India.

Previously, consumers preferred to buy luxury items when traveling abroad because in many cities like Milan and Dubai they could get a VAT refund. Unlike overseas tax refunds, consumers pay 28% GST on luxury items in India. A vacuum has been created by travel restrictions imposed during the pandemic and most people have not been able to splurge on luxury purchases abroad. This gap in their shopping habits was filled by luxury-focused e-commerce platforms offering deals and discounts to encourage a shift to luxury shopping online.

Tata CLiQ Luxury is one of the few platforms to play in the luxury e-commerce space for the past six years, and it claims to have seen remarkable growth. “Since Covid-19, we have experienced strong triple-digit growth,” says Gitanjali Saxena, Business Head of Tata CLiQ Luxury. Focused on offering a curated selection of global and Indian luxury brands, Tata CliQ Luxury serves over 1,000 cities nationwide. Another platform is Darveys, which started operations as a members-only platform in 2014. As one of the first luxury-focused e-commerce platforms in India, it started with offer its members products directly from designers and international boutiques.

But with the intensification of competition in the segment, the platform switched to an open format just before the pandemic. “A lot of people go to the store to see the products, try them out and then place an order with us because we have the largest collection of 300 stores on the platform. A lot of items are priced the same as in Europe” , explains Nakul Bajaj, founder and CEO of Darveys. An achievement in Bajaj’s words, given that it has a good success rate with loyal customers. “One in two people come back to Darveys, and that’s saying a lot.” , he said, adding that the average selling price on Darveys is close to Rs 22,500, and his average recurring revenue will be close to Rs 100 crore by the end of this year.

A changing landscape

Another challenge that online luxury portals are taking up is to provide an alternative to the opulent experience of shopping in luxury brand stores that are limited to a few cities in India. There are not many shopping streets where luxury brands can set up their stores. Even the concept of having a store in five-star hotels is quite restrictive as consumers want to enter a mall-like setting where they can visit multiple stores and brands before finalizing a purchase. And while metro customers can still enter stores in their cities, the aspirations of non-metro shoppers are met through online channels. “In addition to metros and Tier I cities, we are seeing healthy growth coming from Tier II-Tier IV cities and towns. We have a good revenue mix, with nearly 40% of our revenue coming from non-metro markets,” says Saxena of Tata CliQ Luxury. Darveys revenue also comes from its metropolitan and non-metropolitan markets. “Even smaller cities like Agra and Ludhiana have a decent percentage of revenue compared to all the cities we get orders from,” adds Bajaj of Darveys.

Not only that, Ajio, owned by Reliance Group, with its Ajio Luxe play; The Nykaa Global Store; and the luxury offering of Myntra, owned by Flipkart, in partnership with Aditya Birla Fashion Retail, are also present in the luxury market in India.

Buying luxury is not just about the cost of a product. It’s also about the shopping experience. Whether it’s walking into a gilded store, being happily greeted and pampered, being offered a glass of wine, paying attention to your every whim and experiencing the product, nothing this is only reproduced when buying online. And while there is a significant gap, e-commerce players are working to improve the luxury shopping experience online. For example, Tata CliQ Luxury has introduced new experiences like the select program and a premium delivery service. “As we have a very engaged watch enthusiast clientele, we have introduced assisted selling in the form of a 24-hour chat designed to offer real-time advice to customers,” says Saxena. Additionally, consumer concerns about product authenticity when shopping online are understandably resolved by the easy exchange and return policy.

Moreover, some of the luxury e-commerce players are even hosting sale events that allow consumers to experience and celebrate the luxury life by availing deals on the most coveted global and Indian luxury brands across all categories. . Some of these signature events are timed to coincide with periods of increased demand and special occasions. For example, the Tata CliQ Luxury Anniversary Sale takes place during the summer months when there is fair demand for wedding purchases; and another sale takes place during the holiday and wedding season. “These are some of our biggest sales events that give consumers access to an array of luxury brands at great deals,” says Saxena.

The luxury business in India is still in its infancy, and there is still a long way to go. Yet, over the past few years, e-commerce has achieved something that offline stores have never been able to do. And it is to transcend the physical and psychological barrier of luxury shopping to make these products more accessible to as many people as possible.

@nidhisingal

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