ASSOCHAM had predicted in a study that the online luxury market in India would go through the roof by 2020. Thanks to the November demonetisation, this process might be sped up. Immediately after demonetisation, luxury stores had witnessed a steep drop in business. Perhaps this prompted the online counterparts to reduce the prices, which has drawn in a good number of buyers. It is the discount factor and easy availability online that has encouraged smaller cities and towns to patronise luxury brands.
Window shop, but buy online
This seems to be the standard that shoppers are following these days, says Nakul Bajaj, founder of Darveys, online luxury store. Bajaj says,
“Sales were compensated through customers and this new clientele went to stores to check and try new products but eventually bought through us. Discounts matter now and customers who paid a full price earlier bought through us,” he said, “Online transactions were 80% of overall sales, which is good as we make more money on online payments and the chances of customers returning the products are lesser.”
What are sliding off the shelves
Online luxury store Confidential Couture has three categories of products, never used, gently used and fairly used. The never used products are now available at discounts of 30-40%, and gently used have discounts of 40-60%.
Perfumes are more popular, and brands including Burberry, Armani, Gucci, Louis Vuitton and Chanel are selling like hot cakes.
While most retailers had worried about the impact of demonetisation on sale, analysts had soothed fears with hopes of a recovery.Dhanraj Bhagat, partner at Grant Thornton India LLP, advisory and consultancy firm said,
“There will be an impact on luxury retail in the short term, essentially because most of luxury sales in India constitute a large amount of cash, and consumers will put a hold on large spends. However, once the mindset changes, maybe after a period of six months or so, things will stabilize.”
Here is hoping!