Luxury labels stay away from booming e-commerce market

While e-commerce is in a boisterous stage with players like Flipkart, Amazon and Snapdeal fighting for a larger pie, luxury labels present in India are keeping themselves away from this medium. Fear of fakes is another major concern, against which they are constantly fighting. Also, government policies do not allow brands with FDI to sell online.

These labels believe in maintaining their exclusivity and loyalty towards their select customer group, with whom they keep in touch directly. Experts also point out that after investing large funds in establishing premium positioning, they do not want to dilute their appeal by reaching out to masses.

Fake or replicas of famous foreign labels are easily available on e-commerce portals at discounted rates and consumers get fooled. Taking strict action against such fake products, global luxury retailer Louis Vuitton and writing instruments major Mont Blanc had approached the Delhi High Court after they found that Chandigarh-based e-commerce firm Digaaz was selling duplicates of their products. Both have a case through law firm Anand and Anand last month. Several other brands such as Hermès, Cartier and Gucci have also earlier resorted to legal recourse to protect their brands from cheap replicas.

As per a report by Assocham, the fake luxury goods market in India is growing at a 40-45 percent rate annually and is likely to more than double to Rs 5,600 crores from about Rs 2,500 crores at present. The industry body noted that web shopping portals account for over 25 percent of the fake luxury goods market in India. Handbags, watches, sunglasses, perfumes and cosmetics are the most imitated products and come largely from China.