Business Today

Affordable luxury

Members-only fashion websites are doing brisk business by offering deep discounts on high-end products.

Anumeha Chaturvedi | Print Edition: October 3, 2010

When not clinching deals for the Who's Who of corporate India, Shruti Rajan, a corporate lawyer at one of India's biggest law firms, likes to destress with, a blog chock-a-block with front row gossip and Bollywood celeb styles. It was here, earlier this year, that Rajan spotted advertisements of membersonly, online sales clubs, brandmile and fashionandyou, and got invited by them. From everyday brands like Esprit and Levi's to designer fragrances and handbags from Chanel and Moschino, these websites promised spectacular merchandise at throwaway prices. She was both amazed and hooked.

Rajan now shops at least twice a week on fashionandyou, and considers the website a boon given her hectic schedule, as most of the brands are just a click away. "As a lawyer, I have long hours, and shopping through this website is like rewarding yourself after tough hours at work," she says.

Launched in January 2010, the website claims to have a staggering four lakh members, with sales orders touching Rs 20 lakh a day. Data compiled by comScore Inc., a Nasdaq-listed marketing research company, shows fashionandyou is India's leading luxury, fashion, beauty and style site - it attracted 528,000 unique visitors in May alone. Other such websites are catching up, too. While 99labels claims its sales orders have been growing at over 100 per cent month-on-month, three-month-old theprivatesales expects to break even by December this year.

Offering both high fashion and luxury brands at discounts ranging from 30 to 80 per cent, websites like fashioandyou, the privatesales, brandmile and 99labels are changing the face of online shopping in India. "The market dynamics are changing, and the Internet is now a great medium to promote high-end brands in tier II cities," says Jeslin Panakal, Group Head, Marketing, The Rose Group, which has partnered with fashionandyou and 99labels to promote the high-fashion watch brand Antonio Bernini.

Panakal says people who have bought high-end luxury brands earlier know what they are all about, and so the touch and feel aspect can be neglected. And the other advantage is that such people can shop for their favourite high-end products from the convenience of their homes, he adds. Shoppers are invited to these clubs by the existing members or by the websites themselves, which sell everything from fragrances, apparel and accessories to home furnishings.

You can get a Rs 18,000 DKNY watch for Rs 4,000, Paul Smith shoes for Rs 5,000 and a Calvin Klein suit for Rs 15,000! What explains such steep discounts? These websites are modelled on the French online sales club that offers off-season stock of designer brands at discounted rates. Launched in 2001, venteprivee has been a big hit and win-win proposition for all for consumers who got steep discounts on luxury brands, for suppliers looking to liquidate excess stock, and for the website that sells the excess stock and keeps its margins even after discounts.

"Every brand - be it premium, high street or luxury - is sitting on excess stock and has very few avenues to liquidate that stock," says Ishita Swarup, co-founder of

Adds Abhay Gupta, Executive Director of Blues Clothing Company, a retailer of international premium and luxury brands: "These websites establish a market for us in the smaller cities, help track buying behaviour patterns and create awareness for our brands where we don't have a reach." Blues Clothing has sold shirts and shoes from Italian brands Cadini and Cerruti on 99labels.

These websites adopt a sell-andprocure model. Typically, the procuring and sourcing team from a website approaches brands and distributors to discuss the inventory and work out the margins and the contract. The contracts range from six months to a year, and the brand promises to reserve a certain amount of inventory for the website.

Once the website starts getting orders, payments are made to the brands or the distributors and the blocked inventory is shipped to the website's warehouses. Goods reach the consumers between seven and 20 days of placing an order. A website's margins depend on the discounts. "Apparel, a category that attracts higher discounts, gives us margins of 20-25 per cent, while in the case of watches and precious jewellery, the discounts are lower and so are the margins - 10-15 per cent,"says Swarup.

Access to suppliers and retailers across the globe allow these websites to introduce international designers and lesser known foreign brands to shoppers in India. Brandmile sells creations of New York-based designers Elizabeth and Jones as well as Beirn bags, made famous in popular US sitcom Sex and the City. Bangalore-based theprivatesales, the sole website that buys its stock in advance, claims to procure merchandise from brands, suppliers and distributors in Paris. "The idea is to bring the highstreet fashion of Paris to India.

Apart from well-known brands such as Paul Smith, Hugo Boss, and Clive Christian, we also sell high fashion labels like Balenciaga and Miu Miu, which are not available in India," says Ashok Malik, Head of Brand Consulting at theprivatesales.

However, there are a few disgruntled customers. A journalist at a leading fashion magazine says that a Gucci wallet and Bvlgari cufflinks she ordered from fashionandyou turned out to be imitations. "The GG logo was upside down, the product brochure had incorrect spellings and Chinese lettering and the cufflinks were hardly sterling silver," she says, asking to stay anonymous.

But the websites brush aside these claims and insist that their products are procured from authorised distributors and retailers of these brands across the globe. Says Uppal, "We don't deal in the grey market and the bulk of our procurement is directly from brands and distributors in India." 99labels, on its part, states that it rarely works with distributors. "The majority of our merchandise comes directly from the brands," maintains Swarup.

Shoppers, though, could take a leaf out of lawyer Rajan's book. "I always pick the cash on delivery option so that I can touch and feel the product before paying. The websites have a "no questions asked" return policy and give you virtual credit points for buying something else if you cancel your first purchase," says Rajan.

So, if it's still hard to ignore the allure of a Chanel or a Dior at bargain prices, happy clicking.

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