Tata Cliq separates luxury e-commerce website, launches luxury app

livemint (source) :

Tata Cliq will also launch three new categories, including one for Indian luxury brands

Tata Cliq will also launch three new categories, including one for Indian luxury brands, says Ashutosh Pandey, chief executive officer at Tata Cliq.

Tata Cliq will also launch three new categories, including one for Indian luxury brands, says Ashutosh Pandey, chief executive officer at Tata Cliq.

Mumbai: Tata Cliq, the e-commerce arm of Tata group, will separate the luxury version of its website, and also launch a separate app for luxury brands, including clothing brand Armani, bags brand Michael Kors and men’s formal wear brand Brooks Brothers, among others, said a top company executive.

“Luxury started as an experiment and we had to choose what the right assortment for ‘luxury’ in India is,” said Ashutosh Pandey, chief executive officer at Tata Cliq, in an interview with Mint. “We saw a lot more traction on the more premium end of our brands. A lot of customers come to our (luxury) site, they browse. The conversion is low but they keep coming, the customers there are sticky,” he said.

The company will also launch three new categories, including one for Indian luxury brands, Pandey said, along with 7-8 new brands to be sold on the platform, although he declined to name them.

India does not have a clearly defined luxury e-commerce firm, on the lines of websites such as Net-a-Porter and Matches.com in the US and UK, respectively.

“This helps us both from margin perspective, but it also helps immensely from the main Tata Cliq website,” Pandey said. “Because then we still start becoming more choosy about our mainstream brands and about our customers,” Pandey said.

Tata Cliq said spending on luxury items on its website tend to be repeated and are higher than those on mass brands. “By volume, 7-10% comes from luxury website but the average selling price can be 20x of the (Tata Cliq) marketplace,” Pandey said. “The average cart value for the fashion marketplace (average value spent on goods bought) is Rs2,000-2,500 and typically spent on two products,” he said. “In luxury, it can be anywhere between Rs7,000 to Rs60,000.”

This attempt to specialize comes at a time when the focus on fashion and apparel sales in e-commerce is increasing in India. While Amazon and Flipkart went on sale, Aditya Birla Group’s apparel e-commerce website abof.in announced it was closing operations by the end of this calendar year, as per a report in The Economic Times. According to filings with the Registrar of Companies, Aditya Birla Online Fashion Ltd made revenues worth Rs16.76 crore with losses worth Rs98.61 crore in FY15-16.

Meanwhile, Tata Unistore Ltd, Tata Cliq’s parent, made Rs3.02 crore in consolidated revenues in FY15-16 and consolidated losses after tax worth Rs42.39 crore, as per its RoC filings.

However, e-commerce industry analysts said selling luxury online, particularly in fashion, is a difficult task in India.

“The online luxury category in India would be largely driven by accessories, primarily watches along with bags, shoes, and jewellery,” said Sreedhar Prasad, partner, e-commerce at consulting firm KPMG India. “The Rs50,000+ apparel segment is a very difficult market to crack for an online only model because there would be significant offline touch points,” he said. “For large luxury transactions, you need a personal touch, which could be a phone call/message to the sales man, pictures shared on WhatsApp, or a meeting to complete the deal.”

There are other issues, according to Rajat Wahi, partner at Deloitte India. “Luxury e-commerce will be hard to do in India. For instance, how do consumers make sure the products they are buying are not counterfeits? Then, a lot of small town luxury buyers prefer paying in cash, so the e-commerce businesses must figure out a system of how to collect it,” he said.

The potential market for websites like Tata Cliq could be tier II and tier III towns where businessmen and elite consumers are looking to spend on luxury brands whose physical stores are not present where they live.

“The luxury online business will further help grow the market. The number of Indian consumers, particularly younger single ones, who have large discretionary income, is growing,” Prasad said. “For tier I cities, there could be a multi-channel play, where the catalogue on online, choice and ordering done online, fitting or final selection offline.”

Fashion is now the third largest segment in India’s e-commerce industry, worth $300 million in calendar year 2016, as per data from research firm RedSeer. It grew 10% that year, ranked behind e-commerce horizontals like Amazon and Flipkart and cab aggregators Uber and Ola in contribution to e-commerce, according to the data. It accounted for 20-25% of the Indian e-tailing business behind mobile and large goods, the report said.

 

Leave a Reply

Your email address will not be published. Required fields are marked *

%d bloggers like this: