Luxe, Click, Buy

A clutch of homegrown companies are vying for a piece of the online luxury market. The big brands are watching

Fashion fiends in India needn't wait for their next shopping trip abroad to buy the latest 'Tory Burch' handbag or a '7 For All Mankind' jeans. From premium labels to top drawer luxury brands, they are now all available online. Large luxury retailers like Saks Fifth Avenue, Macy's, Harrod's and Neiman Marcus have been shipping to India for a while but now a clutch of online shopping platforms are bringing several luxe brands into the country. None has direct partnerships with the brands, but the products are being sourced from the vast legion of other authorised dealers.

So far luxury brands have shown tremendous resistance to online sales, as replicating the in-store customer experience and maintaining brand salience online was perceived as a challenge. But with the smartphone becoming a primary channel of discovery, brands cannot afford to ignore it any more. India's largest luxury conglomerate Genesis Luxury, which has brought some of the biggest names to India (Jimmy Choo, Armani), is talking to big industrial houses and small online luxury shopping portals to chart an online path. Its chief operating officer, Nikhil Mehra, says, "Customers will want an omni channel - retail play spanning online and offline - and a diverse range of products. We are evaluating relationships and models to do this."

The online concept has been tested globally by Net-a-Porter and Yoox, two of the largest online luxury retailers who merged in March this year to form a $1.5 billion entity. In India, smaller players like Darvey's and Elitify have tested the market and found success. Consumers too have migrated willingly to the online space, as it offers value and convenience.

Like all segments, plenty of numbers are bandied around for the luxury and premium segment too. Going by conservative estimates, India's luxury market is expected to grow to $35 billion by 2020 and pundits expect online sales to account for 10 per cent of this market, which probably explains why Neiman Marcus, Saks Fifth Avenue and Harrod's are all shipping to India. Popular brands like Under Armour too ship out, even as they look for partnerships in India.

Over time, the share of online is expected to increase in India. Amit Rawal, founder and CEO of Elitify, explains: "We expect 10 per cent of the affordable luxury market to move online, online sales would be in the range of $3-5 billion by 2020."

Given the concerns that brands have about positioning and customer experience, players like Elitify and Darvey's are not yet dealing with the brands directly - they source from other large dealers globally. This helps even those customers who are price sensitive as the sales section often gives interesting deals on collections from previous seasons. Elitify's Raval says his company handpicks and curates the most trendy and unique products from all over the world such that 95 per cent of the products they sell are not sold on any other website in the country. The online portal claims to have grown 20 times over the last 12 months. He says: "We are currently on a run rate of Rs 36 crore in GMV and are growing 10-15 per cent per month." Genesis Luxury is currently in talks with some of these online portals toevaluate a relationship going forward. 

Darvey's on the other hand claims to be a marketplace where luxury boutiques sell their products at the same price at which these brands are sold in any global capital like New York, London or Milan. Nakul Bajaj, CEO of Darvey's, says the purpose of starting his business was to allow Indian consumers to access various international luxury designers, which were not easily available in the country. Says Bajaj: "We provide products at prices they could get only while travelling abroad. Ours is an international marketplace model, wherein global luxury boutiques/sellers get to sell directly to consumers exclusively in India. Being a 'members only' portal, our members shop from the hand-picked bona-fide collection of 70+ luxury designer products procured from 285+ global boutiques."

These portals also have a cash-on-delivery model which is a big advantage as a majority of the transactions are in cash, which is not possible while shopping on global websites. Sarah Levinson, manager, Luxury Fashion Terminal, who sells on Darvey's says:

"E-Marketplaces furnish more clarity in the purchasing process as the availability, prices and stock levels of products are within reach of both the seller and the buyer. We were amazed by the idea of cash-upon-delivery and it's an absolute revelation for us."

But there is a potential downside. Since none of the online sellers source directly from the companies, the authorised marketers believe that offering global warranties could be an issue. Some believe that copycat websites may face authenticity issues if proper warranties do not accompany these products. Despite this, online global luxury is here to stay.

CASHING IN

• Online luxury market expected to hit $3-4 billion
   
• Global retailers like Neiman Marcus and Saks Fifth Avenue already ship products to India
   
• Large industrial houses eyeing luxury portals to capture rising tide of luxury shoppers
   
• Large authorised dealer Genesis Luxury looking at partnerships for online consumers