Car market in slow lane, Mercedes rides high on branded merchandise sales

From watches and shades to fitness bicycles, online shoppers have been lapping it up all in a big way; 75% of shoppers in 18-34 age bracket, firms' revenue tops Rs one crore from this biz

Even as the broader car market has seen significant slowdown, following the Covid-19 pandemic, Mercedes-Benz India is seeing huge traction for its branded accessories and merchandise. From watches and sunglasses to trekking/fitness bicycles, online shoppers seem ready to loosen purse strings, says Santosh Iyer, vice-president-sales and marketing at the firm. The aggregate transaction value of these has exceeded Rs 1 crore, even as the number of visitors has crossed the 100,000-mark — a threefold jump in six months.
 
Encouraged by the response, Mercedes now plans to list the accessories on Amazon. It is also looking to expand the fitness and gifting range — two segments have been fuelling overall growth — says Iyer. To lure younger buyers, it is also looking to add to the AMG merchandise. 
 
“We saw significant traction in demand for these products during the lockdown, even though we were able to deliver only after the curbs were eased. There is exponential growth month-on-month (MoM),” says Iyer.

 
Among other things, the demand for fitness bicycles has been the most. This is despite the premium pricing it commands. A majority of these items are imported from Germany. Depending on whether one is looking to buy cufflinks or a bicycle, one has to shell out anything between Rs 1,200 and Rs 1 lakh.

 
“At a time when people are not in the mood to buy cars, branded merchandise and accessories can be a good way to retain top-of-the-mind brand recall. The online sale enhances the scope to reach out to a larger segment of buyers.  Also, the fact it’s a decent margin business must be prompting firms to push the segment,” says Kavan Mukhtyar, partner and leader-automotive, PwC.
 
Mercedes has been selling accessories and apparel for many years in India. It’s only recently after it took the online sales route that sales have picked up, says Iyer. Close to 75 per cent shoppers on its website are in the 18-34 age bracket; 20 per cent being women.
 
Meanwhile, luxury car sales have started picking up MoM and expected to reach pre-Covid levels during the festive season, says Iyer. “Since the Shradh period has ended, we are seeing more bookings and enquiries,” he adds.
 
The company’s inability to launch the new A-Class and GLA, which accounted for a third of its total sales, will weigh on the full-year sales. The models are expected only by the end of the year or beginning of next year, says Iyer. “We are seeing demand for the Rs 40-lakh-plus cars pick up,” he adds.