expert speak

eRetail of
luxury bags:
The Indian story
eRetail is slowly making inroads and global
brands are all set to take the Indian luxury
bags market by storm – or shall we say,
the eRetail way. Let’s find out more about
what is it that’s changing the luxury brand
market scenario in the country.

Envision a dream and then wake up to realise it. Businesses around the world have
been conceived with this basic truth. To sell – these are two words that sum up the sole
purpose of any business.
Luxury has been, and will always be, the most sought after quality in a product or service.
The emergence of luxury brands across the globe stands testimony to this fact. There has
been a growing awareness about brands in India, and global trends today have become fashion
statements. This, clubbed with the increase in individual buying power, has led to a boom in
luxury retail over the last decade in India.
With shopping malls like the DLF Emporio providing the perfect luxury shopping experience
to the consumer, Indian luxury is arriving, and for good. According to the India Luxury Review
2011 report by the Confederation of Indian Industry and A.T. Kearney, the Indian luxury market
reached US$ 5.75 billion in 2010, a growth of close to 20 per cent over 2009. Categories such
as jewellery, electronics and cars have shown remarkable growth. The market is expected to
reach a size of US$ 14.72 billion by 2015, the report states, a compound annual growth rate of
about 21 per cent, indicating that the Indian luxury story is only getting started.
According to a study by TNS, brands such as Mercedes Benz and Jaguar Land Rover, fashion
houses including Hermes, Fendi, and Louis Vuitton, and watchmakers like Tag Heuer have
plans of expansion in the country. The total size of the business selling retail goods on the
internet, commonly known as e-tailing, is set to touch US$ 76 billion mark by 2021 in the
country, according to a study by Technopak.
eRetail has been the next consequential move by luxury brands across the globe. But they
first need to test waters in the Indian subcontinent.

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for online luxury market,
the key to success will be
cutting-edge customer
service tools in addition to
all classical luxury market
success tools.
A survey was recently conducted to find if the Indian market is
ready to welcome eRetail of luxury bags in particular. A survey
conducted to separate fiction from facts led to interesting but
puzzling revelations. Where on one hand some of the luxury
retailers like Burberry, who are willing to experiment, have
already taken the bold step, others like Armani have their
doubts. Yet others are following the policy of wait and watch.
When contacted, the store manager at Burberry shared their
philosophy that eRetail is only adding to the possibility of
more sales with more consumers being able to purchase and
possess their bags, leading to a higher brand loyalty.
The high-end consumer is eager to experience this luxury but
is still apprehensive if this can replace the tangible experience
at a store. Some of the other restricting factors could be
high cost, issues related to delivery and, of course, the brand
identity, which is as much about the product as it is about the
experience of buying it. Brands such as Armani shared these
apprehensions.
So, is the Indian market really ready to take the leap? Are we
willing to spend so much on luxury just by viewing it? Are the
mindsets changing and has window shopping become a thing
of the past? eRetail is still a virgin territory; those who dare to
take the million-dollar risk will be christened ‘the Pioneers’,
while the traditional, careful players will be ‘the Followers’.
This is not a fiction story, just the dawn of this worldwide
phenomenon waiting for its sunrise on the Indian sub-
continent. Luxury brands from across the world after
having tasted sweet success in offline showroom sales
and a persistent growth pattern are now planning to create
and reach a loyal customer base pan India through this
revolutionary business idea.
According to a recent survey, the Indian luxury market is
ripe to go digital, and there is a real eCommerce opportunity
emerging, but it remains to be seen whether it will replace
offline retail or happily co-exist to increase the volume of sales
and give an undeniable boost to the brand identity and loyalty.
One thing is for sure. eRetail is making inroads and is here to
stay, so let’s welcome it with open arms, open wallets and with
only a click of the mouse. After all, ‘small’ is the new ‘big’ and
as you read this, eRetail would have slowly made its way in
your life. Luxury stands redefined and more approachable to
the common man today. So, go ahead and buy your Burberry,
Gucci, Louis Vuitton, Salvatore Ferragamo, the list is only
limited by your imagination!
The offline luxury market included originality, creativity,
emotional appeal and an enhanced image due to the
presentation involved. On the other hand, for online luxury
market, the key to success will be cutting-edge customer
service tools in addition to all classical luxury market success
tools. It will also include inducing that level of trust through
clean payment process, quality shipments, et cetera.
In addition, reflecting the brand image, brand story and
heritage, creating the feel of the product and value proposition
using design features are equally important to luxury brands
on the online platform. For a luxury retailer to offer a true
experience of the brand universe online, they need to provide
not only a great online shop but captivating storytelling across
multiple devices, platforms and social media. By tailoring each
of these platforms with product-focused content and site-
wide personalisation, retailers will build stronger emotional
relationship with their customers and reassure them that the
luxury purchase is worth every penny spent.
Ultimately, it depends on a particular brand (which in turn
depends on their individual strategies and ideologies) how it
interprets the future of eRetail. Remember, it’s always easy to
fulfill a demand than to create one. To sum up, it can be said
that it is not a false dawn for eRetailing of luxury bags in India
but, currently, the sun is as yet below the horizon despite the
recent advancements. BoF

About the author:

Suruchi Mittar is an academician with more than 13 years of experience.
She is an associate professor with the Technology department and Center
Coordinator for Foundation Programme of NIFT. She has been doing research
projects with NIFT students and faculty related to human resource,
marketing research, technology in textiles, and database management systems.
Amim Fatmi and Aakash Anand are second year B.F. Tech students of NIFT,
New Delhi. Both have done a research on e-retail of luxury in India under
Ms.Suruchi Mittar.

The views expressed in the guest articles are those of the respective authors. The
Suruchi Mittar Aakash Anand Amim Fatmi
editor and publisher may not necessarily subscribe to the same.

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