Online trading has helped the sale of luxury products take a leap forward. This upward swing is set to grow over the next couple of years, says ASSOCHAM in its recent study. The study finds that in 2016, the online luxury industry is going to be valued at $35 billion. This figure is set to double in the next four years.
The Indian luxury market is currently valued at $ 14.7 billion. An earlier ASSOCHAM study showed that the metro cities including Delhi, Mumbai, and Bangalore were the highest spenders.
Contributing factors to the rise of demand for luxury products
- Greater Internet penetration – The number of people online in India is growing by the minutes, thanks also to mobile access.
- More exposure through the web – A greater sense of awareness about different cultures has come about through the net.
- Growing middle class – The upper middle class society in India has grown over the last few years. With a greater purchasing power, buyers are now able to look at luxury products more than before.
- Growth in modern retail – Today luxury brands are available at the neighbourhood retail store, making it easier for shoppers to try out luxury products.
Targeting the audience
Luxury brands are using the following tactics to drive sales:
- Discounts
- Interactions and customer engagement on social media
- Tying up with online marketplaces
- EMIs and cash on delivery
Some of the important reasons for buyers to go slow on luxury brands like Hermes, Versace, Prada, and Armani are the high price tag, local unavailability, and low exposure. Now that these issues are being addressed via the online route, Indian consumers are encouraged to give it a shot. Leading marketplaces likeFlipkart, Myntra, Amazon, EBay, and Jabong are hosting luxury products from leading brands on their sites.
One of the main concerns of the luxury segment is the presence of fake products. It is important that sellers and marketplaces focus on preventing fakes from entering the market to ensure credibility.
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