Apparel April 2019 Apparel May 2019 issue | Page 24

MARKET WATCH
Small-town India Loves
Luxury
Growth in luxury spending in India is now moving
beyond Delhi, Mumbai and Bengaluru. Kolkata,
Chennai, Pune and Hyderabad have emerged
as new centres of luxury consumption. While
Chennai witnessed a 65 per cent rise in luxury
spend from 2017 to 2018, luxury spending in
Kolkata doubled from 2013 to 2018. In Pune,
weekends make up for 58 per cent of luxury
spending. The proportion of luxury spends on
jewellery in Delhi grew from 13 per cent in 2013
to 39 per cent in 2018. In Bengaluru, the share of
spend at luxury retail increased from 53 per cent
in 2013 to 65 per cent in 2018. In Mumbai, the
share of spending on jewellery fell from 27 per cent
in 2013 to 23 per cent in 2018, while luxury retail
gained share from 36 per cent to 44 per cent. In
Hyderabad, the share of electronics grew from
16 per cent in 2013 to 52 per cent in 2018.
Tier I cities spend the highest on high-end
boutiques and jewellery, whereas tier II spends
more on high-end fashion boutiques and shop
boutiques and lesser on jewellery. Look and feel
are major deciding factors when it comes to
luxury products.
Reliance Industry to Go Online Soon
Arvind to Drop Bad
Performing Global
Brands from Its
Portfolio
Arvind will drop Swedish brand Gant and
American brand Nautica and Aeropostale from
its portfolio. Licences for these brands will be
returned to their owners. Nautica has been
struggling for some time on the global stage as
well. Arvind has taken this decision since sales
have not matched expectations. The company
is shutting down exclusive stores, and till the
time the licence expires, the brands may be
available exclusively on Flipkart. The plan is
to regularly assess its portfolio and focus on
brands that create long-term value.
Arvind has 28 global brands available across
1,300 stores. There are three segments where
it believes it has the strength to be the leader.
These are premium inner wear brand US Polo
Association, premium kids’ wear brand Gap,
and premium beauty brand Sephora. From next
year, speciality retail and emerging brands are
expected to contribute materially to bottom
line growth.
Arvind Fashions has power brands like US
Polo Association, Arrow, Flying Machine, and
Tommy Hilfiger; speciality retail brands such
as Gap, Sephora, and Unlimited, which are
the company’s family fashion store chain; and
emerging brands that include Calvin Klein,
Aeropostale, The Children’s Place, and Ed
Hardy. Arvind also has a speciality value retail
format Unlimited.
Reliance Industry is set to launch its own business-to-consumer marketplace that will sell everything from food to fashion.
The hybrid online-to-offline venture will take advantage of the synergies between Reliance Jio Infocomm and Reliance
Retail’s stores. Reliance Retail is planning a business-to-business marketplace as part of its comprehensive omnichannel
strategy that will enable large suppliers and distributors to carry out business with millions of small traders and
kirana stores.
In the meantime, Reliance has started withdrawing its clothing, footwear and lifestyle products from rival marketplaces.
Reliance wants to create exclusivity for global as well as its own brands to attract consumers to its portal. Reliance
Trends and Reliance Brands will expedite the phaseout from non-Reliance marketplaces in the coming weeks.
The company has big plans for the B2C marketplace too. Reliance already operates the online fashion platform
Ajio.com, which also sells global and Indian brands outside of the group’s stable. Reliance has an edge over foreign-
funded players such as Amazon and Flipkart. The two FDI-funded online marketplaces can only act as technology
platforms that connect independent sellers and buyers. They cannot sell, own or control inventory. However, an Indian
firm with no foreign investment can exercise control over inventory, thereby controlling pricing, quality and speed of
delivery—key elements for the success of any e-commerce firm.
18
I APPAREL I
May 2019