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In India, luxury e-commerce is starting to take off, despite the low starting base, and a new dynamic is felt throughout the country since the beginning of the pandemic.
For a market as geographically vast as India, e-commerce seems to be the ideal solution. However, it is still struggling to develop in the country and Indian designers and international brands are trying to catch up.
With the arrival of the pandemic, the Indian subcontinent has been hit hard and several health restrictions have been imposed throughout India. The closure of luxury stores has pushed various key players to emerge as the only alternative in a crisis situation.
The emergence of e-commerce in India
Thus, many luxury e-commerce websites such as Ajio Luxe, NNNOW.com, Darveys, Tata CliQ Luxury or Nykaa.com, have emerged since the beginning of the pandemic in India and have become references for the wealthy customers.
The luxury market in India is estimated to be worth 6 billion dollars, and is finally experiencing a real shift to digital, forced by the consequences of the health crisis. According to Euromonitor International, the beauty sector would even surpass the fashion sector in online sales.
Indeed, according to figures reported by Euromonitor International, 12.1% of luxury beauty and personal care items are sold via online distribution channels, while this is the case for only 5.5% of ready-to-wear clothing and shoes.
“High-priced discretionary spending has been depressed by external macro shocks – demonetization, GST [Goods and Services Tax] and the Covid-19 virus. Liquidity has been squeezed in the value chain [affecting] retailers, distributors, importers, which has impacted their ability to do business, limiting stocking capacity,” says Ketki Paranjpe, partner at L Catterton Asia. “Slow growth is hardly surprising.”
Thus, luxury companies see India as a country of new opportunities for the luxury e-commerce sector. In particular, they are banking on the emergence of the new middle class generation. The main advantage of e-commerce put forward by this new clientele during the pandemic is the possibility to make contactless purchases.
Major Indian e-commerce investors include conglomerates such as Reliance, which owns Ajio Luxury; Tata, which owns Tata CliQ Luxury; and Arvind Lifestyle Brands Limited, which owns NNNOW.com.
An unpromising market
Yet, at first glance, the numbers are not encouraging for the future of luxury e-commerce in the subcontinent. According to data reported by Euromonitor, there were only 230,000 high net worth individuals (with at least $1 million in liquid financial assets) in India.
“I think a retail renaissance is happening in India,” says Supriya Dravid, adding that more than 60 percent of Ajio Luxe‘s orders already come from outside the country’s eight major cities.
“There is a huge target audience of people who aspire to buy luxury. They may start with Michael Kors, but eventually they want to buy Salvatore Ferragamo,” says Nakul Bajaj, founder and CEO of luxury e-commerce company Darveys.
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In India, luxury e-commerce is starting to take off, despite the low starting base, and a new dynamic is felt throughout the country since the beginning of the pandemic.
For a market as geographically vast as India, e-commerce seems to be the ideal solution. However, it is still struggling to develop in the country and Indian designers and international brands are trying to catch up.
With the arrival of the pandemic, the Indian subcontinent has been hit hard and several health restrictions have been imposed throughout India. The closure of luxury stores has pushed various key players to emerge as the only alternative in a crisis situation.
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In India, luxury e-commerce is starting to take off, despite the low starting base, and a new dynamic is felt throughout the country since the beginning of the pandemic.
For a market as geographically vast as India, e-commerce seems to be the ideal solution. However, it is still struggling to develop in the country and Indian designers and international brands are trying to catch up.
With the arrival of the pandemic, the Indian subcontinent has been hit hard and several health restrictions have been imposed throughout India. The closure of luxury stores has pushed various key players to emerge as the only alternative in a crisis situation.
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