E-commerce is expanding the Indian luxury market: ASSOCHAM

The Dollar Business Bureau Indians are likely to spend US $35 billion on online luxury stores by 2016 compared to that of US $8 billion in 2012, says the Associated Chamber of Commerce & Industry (ASSOCHAM), in its recent study. The online luxury industry in India is growing at a compound annual growth rate of about 25%, added the study, while referring to the reasons contributing to the rise of the industry in the country. According to the study, a rise in disposable incomes, expansion of modern retailing and the impact of western culture have provided a platform for promising growth of online luxury industry in India. The study said that the major growth is being driven by the rising income levels which lead to a change in spending patterns and creating good business opportunities in India. With more than 140 million internet users (75% under the age of 35), India is the third largest internet market in the world, the study said, adding that the role of rising middleclass as the biggest drivers of the online retail growth in the country. Most of the luxury products being sold online are offered for sale at the best offers which is incomparable and this definitely benefits the middle class audience too, the study added. “E-commerce is expanding the Indian luxury market as online access and competitive pricing bring hitherto unattainable brands and products within the reach of consumers in the country's lower-tier cities,” said D S Rawat, Secretary General, ASSOCHAM, at the release of the study. He said the luxury brands are well-connected digitally and the online path helps brand to educate potential consumers about luxury products. EMI schemes, deals or discounts, cash-on-delivery, easy return and other policies have created a better platform for the brands to entice the customers through online shopping, he added. According to the study, the luxury clothing market in India grew by 35% to 13,230 crore in 2012 and is likely to touch Rs 32,000 crore by the end of 2015. The global online market is expected to grow more than double by 2020 as major brands continue to increase their range availability on the web with pure-plays set to outpace the sector as a whole, the study added.  

May 9, 2015 | 3:31 pm IST.