Affordable luxury

Members-only fashion websites offer deep discounts on luxury brands and high-end products. It's a win-win proposition for all - consumers, suppliers and the websites.

Anumeha Chaturvedi        Print Edition: December 2010

When Shruti Rajan was checking a blog earlier this year, she came across advertisements of online sales clubs, Brandmile and Fashionandyou. A corporate lawyer at one of India's biggest law firms, Rajan was invited to the members-only clubs.

The Websites promised spectacular merchandise- from everyday brands like Esprit and Levi's to designer fragrances and handbags from Chanel and Moschino-at throwaway prices. She was hooked. Rajan now shops at least twice a week on Fashionandyou, and given her hectic schedule, considers it a boon.

Offering both fashion and luxury brands at 30-80% discounts, these Websites are changing the face of online shopping in India. Shoppers are invited to these clubs by existing members or Websites and one can easily snag a Rs 18,000 DKNY watch for Rs 4,000 or a Calvin Klein suit for Rs 15,000!

www.fashionandyou.com

FOUNDERS
Pearl Uppal (in pic), Harish Behl, Rahul Narvekar
TIME OF LAUNCH
January 2010
BRANDS SOLD
Gucci, Paul Smith, Chanel, Dior, Armani, Versace
NUMBER OF MEMBERS
Over 4 lakh
AVERAGE ORDER
Rs 2,000
TRANSACTIONS IN A DAY
1,000
BREAK-EVEN PERIOD
One-and-a-half years
How do the sites manage such steep discounts? These are modelled on the French online sales club venteprivee. com, which offers off-season stocks of designer brands at discounted rates. It's a win-win proposition for all- consumers get big discounts on luxury brands, suppliers look to liquidate excess stock, and the Websites keep the margins even after discounts.

"Every brand is sitting on excess stock and has very few avenues to liquidate it," says Ishita Swarup, co-founder, 99labels.com. While 99labels says its sales orders have been growing at over 100% monthon-month, Fashionandyou claims to have 4 lakh members and sales orders touching Rs 20 lakh a day. Three-month-old Theprivatesales.com expects to break even by this month. These Websites adopt a sell-and procure model.

Typically, the procuring and sourcing team from a Website approaches brands and distributors to discuss the inventory, margins and 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 site starts getting orders, payments are made to the brands or 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 attracts higher discounts and gives us margins of 20-25%, while watches and jewellery fetch lesser discounts, so the margins are low at 10-15%," says Swarup.

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 Websites brush aside these claims and insist their products are procured from authorised distributors and retailers of these brands.

Says Uppal: "We don't deal in the grey market and the bulk of our procurement is directly from brands and distributors in India."

"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.

It's a sound advice if you are planning to click for your brand.

Courtesy: Business Today

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