Luxury brands suffer a set-back in India

Despite positive predictions, retailers selling high-end fashion and consumer products are witnessing a low consumer response. According to them, the country’s market is still not ready for luxury. It may be recalled that an ASSOCHAM study some time ago had predicted Indians are likely to spend 35 billion dollars (over Rs 2,22,000 crores) on online luxury stores by 2016, compared to 8 billion dollars (over Rs 50,900 crores) in 2012, growing at a compound annual growth rate of about 25 percent.

Several reasons have led to dip in business, these include: low demand, high rentals, import duties, steep online sales and consumers buying luxury good on their visits abroad. And now with the government making it mandatory for people to share their permanent income tax account number for any purchase of over Rs 1 lakh, sellers are trying to split the bill to keep the transaction under Rs 1 lakh.

To relate with India customers purchasing habits, luxury brands are adopting various measures. As D S Rawat, Secretary General ASSOCHAM points out that luxury shoppers are well-connected digitally and it becomes easier for brands to showcase themselves online. Online path helps brand to educate potential consumers about luxury products. With deals or discounts, cash-on-delivery, EMI schemes and easy return policies, online shopping has offered luxury brands a new platform to engage and entice customers.”