Indians’ love for luxury e-shopping on the riseWednesday, 30 May 2012
In the recent Union Budget Finance Minister Pranab Mukherjee has said that a model legislation for Centre and State Goods and Services Tax (GST) is under progress. The GST network will be set up as a National Information Utility and will become operational by August 2012. E-commerce entrepreneurs are seeing GST implementation as a positive move, and expect the prices of products sold online to come down with its implementation. They expect the legislation to make supply-chain more cost effective.
No wonder top luxe retailers are now focusing on e-retailing. Take Genesis Luxury Fashion for example, it represents top brands like Bottega Veneta, Burberry, Paul Smith and Jimmy Choo in India and has been concentrating on store expansion so far, but it has now decided to focus on e-commerce. Another known platform, Myntra.com is betting big on India, since it feels that e-shopping is emerging as a major e-commerce industry with the customer base growing from 10 million to about 50 million in the next four years.
Excluzen.com, launched in January 2012 by Urvashi Sahay has already witnessed as many as over 300 transactions in four weeks, mostly under the vertical of travel, electronics and fashion. The company attributes its success to the discount factor. The website offers brands like Apple, Bang & Olufsen, Tag Heuer, Omega, Satya Paul, Just Cavalli, Rosenthal and Callaway. Having 100 partner brands at the moment, it is looking at expanding its portfolio by adding another 150 labels by the end of next fiscal. While 80 per cent of the brands are Indian, by next year, it is hoping to change the ratio of Indian and foreign brands to 60:40.
E-commerce industry players say the demand for online shopping has perked up since the mind-set of Asian consumers is conducive for the luxury market with an increase in disposable incomes, nuclear families, awareness even in Tier II, III towns. Indian consumers’ love for luxury brands and these platforms offering them at discounted rates has also led to people taking to the online shopping platforms.
Boston Consulting Group has predicted in a report released recently that online shopping in India is set to explode. Indians are likely to spend $84 billion on online stores by 2016, compared to the $7 billion they spent in 2010. Online sales will account for 4.5 per cent of the total retail sales in India by 2016, from 0.9 per cent now, it said in the report titled ‘Connected World Series’. No wonder online luxury stores such as fashionandyou.com, 99labels.com, which sell discounted luxury products, claim to be growing well. These websites source unsold inventory from brands such as Burberry, Versace, Michael Kors and Roberto Cavalli to sell online.