Luxury Products on Online Retail

In recent past, online retail portal like www.rockasap.com is started selling premium and luxury products. One may ask that whether there is a market for luxury products in India, where better part of the population still lives in rural area and there is also a sizeable number of it is still living under extreme poverty. CII-AT Kearney Report on the market of luxury product says that a market of USD 4.5 Billion in 2009 saw a growth of more than 20% and has reached to the level of USD 5.75 Billion in 2010 and keeping up with 5 year projection. Mall on Mobile has gone beyond Delhi, Mumbai and Bangalore to Chennai, Hyderabad, Pune and Ahmadabad. Car dealership is one of the examples of most penetrated, having 50% of their dealership outside metros. Jewelry market is nothing new in India, but branded jewelry has spread its reach across the country, even in rural areas. So, the market is definitely there in India. Digital and social media has helped in finding out and connecting with the hard to find affluent and aspiring population of the country.

But this is again one side of the story. There are lots of challenges of bringing luxury products on ecommerce platform.

1. All the big and luxury brands have got physical infrastructure, i.e., retail outlets in different part of the country. Consumers, who have got the money to spend on luxury, would definitely want to be treated differently then the mass and internet is mass.

2. In India, it is easy to find a consumer who spends on aspirational products than a consumer who spends on luxury product. What I mean to say is, in the journey of affluence, people buy lot of products or services, which they think suitable to be bought by affluent people. These types of buyers do not leave any kind of behavioral structure to fall back upon, which will be pre-requisite to do the sales planning. They are aplenty in number but very fragmented in location.

3. Almost all the electronic products come with manufacturers’ warranty or replacement guarantee for a certain period and this will be the case with luxury brands as well. A retail chain with physical infrastructure normally has the promoter employed by the manufacturing company or its own trained sales staff, who normally provides pre-sales information to the customer to allay his or her hesitation. This service is unavailable on e-commerce portals. So, while making a purchase decision of lower denomination, consumer may not look much for pre-purchase consultation, but for luxury and premium products, scenario may be bit different.

4. All the luxury brands have got their own fan following and devoted customer base. Companies manufacturing it have also got different sales and marketing strategy accordingly. So, creating online shopping stores in India place for these products and aligning it with the manufacturing company’s strategy and policies will be easier said than done.

5. Indian tax structure is not very encouraging to goods produced in one state and sold in other state. Multiple taxation regime has given rise to much malaise, which has been hurting the domestic trade eco-system very badly. Scenario in the case of online retail is also not good. If we couple it with the imported products, because, this is what most of the luxury and premium products are, tax complications can be very well understood.

These are some of the challenges, which I could list out. There may definitely be others as well, but market is growing and that also at very fast pace. It is in nascent stage, so, anybody who is able to build a market, will be the leader and market size is big, so, pain is worth taking.

Happy Shopping….

Mukul Bhartiya(Digital Media Professional and Independent Blogger) writes for RockASAP that is a mall on mobile, where you can buy eBooks, mobile phones, computers/Laptops, gifts and entertainment items and more online so visit our website: for online shopping stores in india.

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