Global luxury brands take e-tail path to reach masses

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Global luxury brands are taking the e-tail path to reach mass buyers, even extending their reach in Tier-II and -III cities in India.

Renowned brands are reportedly keen on entering the e-tail space in India, as they want to overcome the barriers typically associated with introducing bricks-and-morter operations in India, reports the Times of India. According to a McKinsey report, online sales of luxury items in India are growing twice as fast as the overall e-tail domain.

Commenting on why the e-tail path is most preferred by luxury brands, Vikram Chopra, Founder & CEO, Fabfurnish.com, told the Times of India, "It is a great way for them to find foothold in an important market like India. Given the time it takes to get approvals, find right locations in India, going for offline retail is a big decision which needs long-term planning and focused execution. On the other hand, online helps them get relatively easy entry, start interacting with the market and test it without having to incur heavy establishment cost."

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Fabfurnish.com has launched over 10 tableware/glassware brands — Noritake, Lodge, Nauni, Stoelze — which were so far found at high-end hotels such as Taj and Hilton in India. The company is in talks with another 10 brands at the moment from across the globe.

According to KPMG, the overall market of luxury brands in India stood at $8.5 billion in 2013 and is expected to grow to $14 billion by 2016.

"Luxury shoppers are well-connected digitally and it becomes easier for brands to showcase themselves online. The e-tail path helps them position their brand and educate potential consumers about luxury. They can even reach out to tier-II cities," Chopra told the Times of India.

Recently, Jabong.com has brought international fashion labels like Dorothy Perkins, River Island to India. Fashionandyou.com has launched a "Luxury Lounge" section wherein they have crossed oceans to pick the best fashion brands like Salvatore Ferragamo watches, Coach handbags, Aston Martin sunglasses and Burberry & Versace handbags, which are otherwise not easily available offline in India.

Aasheesh Mediratta, CEO, Fashionandyou.com, finds e-tail as the easiest route to scan the market for sales potential without significant commitments and long gestation period. Mediratta was quoted in the report as saying, "Most importantly, it addresses the fundamental issue of reach. Further, it's an ideal situation to dip-test styles, local aesthetics and preferences. Also, e-commerce has conventionally been rooted in providing its shoppers the best deals which is possible due to optimised value chain"

However, according to industry experts, if precious luxury brands take the discount route on e-tail domain, they would face the risk of losing stringent price and brand positioning. Retailers' Association of India CEO Kumar Rajagopalan told the Times of India, "All brands, including luxury ones, will embrace e-tail route for sure. But they should not imitate discount players. It would definitely hurt their top-end brand positioning."
 


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