Aditya Birla partners Christian Louboutin

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December 7, 2023

Christina Moniz, Financial Express

December 7, 2023

Aditya Birla Fashion and Retail (ABFRL) on Wednesday announced a partnership with Christian Louboutin, a designer brand known for its signature extremely high red-soled heels.

As per the terms of the deal, the current Indian business of the luxury shoemaker will be transferred into a newly-incorporated arm of ABFRL where the partners will hold equal stakes. Ashish Dikshit, MD, ABFRL, said in a statement, “This partnership… exemplifies our ambition to develop and shape the future of the luxury market in India.”

Christian Louboutin made its entry into the Indian market with its first store in Delhi in 2012 and later launched its second store in Mumbai. Announcing the JV, Alexis Mourot, Christian Louboutin Group CEO, said, “India is an extremely important market for us.”

The fact that luxury markets in Europe and even in China are seeing sluggish growth has made India a strong emerging opportunity for brands such as Christian Louboutin, note experts.

The brand, which was founded in Paris in 1991, has since diversified into categories such as handbags, accessories and beauty and is present in over 30 countries.

With this JV, ABFRL will be taking on Reliance Brands, which has partnered with global luxury brands such as Burberry, Ferragamo, Hugo Boss and Versace in India.

Devangshu Dutta, CEO of Third Eyesight, said, “For ABFRL, the ambition is to create a diverse portfolio of brands catering to a range of consumer segments.”

Having been in India for a while now, the Louboutin brand is well aware of the potential for growth in the market. One of the key factors driving growth for luxury is the rise of high net worth individuals (HNIs), which is the fastest growing anywhere in the world, say observers.

The number of ultra-high net worth individuals (UHNWIs) in India is expected to rise 58.4% in the next five years from 12,069 in 2022 to 19,119 in 2027, a report by Knight Frank said in May.

In recent years, India has also seen new luxury shopping destinations coming up in cities like Mumbai, Delhi and Chennai, but experts believe that the total addressable market and the number of luxury shopping centres are still small.

Though there is “potential”, notes Santosh Sreedhar, partner at Avalon Consulting, this segment will take a few years to really take off. “Luxury is a long-term game in India, which is why brands need to have Indian partners like Reliance and Aditya Birla with deep pockets and vision to stay committed for the long haul.” E-tailers like Tata Cliq are also enabling omnichannel growth, says Sreedhar.

With a revenue of Rs 12,418 crore, ABFRL has a strong network of 3,977 brand stores across the country. It is present across 33,535 multi-brand outlets and 6,723 points of sales in department stores across India as on March 31, 2023.

It has a repertoire of brands such as Louis Philippe, Van Heusen, Allen Solly and Peter England, besides long-term exclusive tie-ups with global brands like Ralph Lauren, Hackett London, Ted Baker and Galeries Lafayette. Among Indian designers, ABFRL has strategic partnerships with Shantnu & Nikhil, Tarun Tahiliani, Sabyasachi and House of Masaba.

(Published in Financial Express)

Luxury brands script clause to share space with equals at Jio World Plaza

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November 4, 2023

Faizan Haidar, Economic Times
4 November 2023

Some of the super-luxury brands that have opened stores at the recently inaugurated luxury mall, Jio World Plaza in Mumbai, have put in a condition that at least four top brands – such as Louis Vuitton, Gucci, Cartier, Burberry, Tiffany, Valentino, Bulgari, Zegna, Giorgio Armani and Bottega Veneta – should be present in the same complex, to ensure the position of their brands is not diluted.

ET has seen copies of the agreements between Reliance Industries, the owner of Jio World Centre, and five brands, accessed through data analytic firm CRE Matrix.

Reliance Industries and the brands did not respond to emails seeking comment till press time on Friday. Brands often have an exclusivity clause with the mall where they don’t want competing brands near their stores. However, in the high-end segment, to ensure a similar buyer profile, they want similar stores nearby. Jio World Plaza already meets the condition with several of these super-luxury brands having opened their outlets there.

“If at least four among the mentioned brands are not open within six months of us starting the operation, we should be entitled to a reduction of the licence fee by 25% for the period that this criteria remains unfulfilled,” Christian Dior Trading, which will operate Dior, has said in the agreement.

Dior will pay ₹21.56 lakh in monthly rent for a 3,317 sq ft space in the complex. Gucci has given a list of six luxury brands – Louis Vuitton, Dior, Cartier, Bulgari, Valentino and Burberry – and demanded that at least four have to be represented in the shopping centre.

Louis Vuitton, Cartier and Bulgari have also put in similar conditions. Most of them have kept the right to terminate the agreement after serving the notice for nine to 12 months.

“In the super-luxury segment, most of the brands complement each other and that is why they want the presence of these brands next to each other. Good mall developers also go with zoning of brands and don’t want to mix the super-luxury brands with the premium or mid to premium brands. As more luxury brands are contemplating India entry, we will see more luxury spaces coming up,” said Devangshu Dutta, founder of retail consulting firm Third Eyesight.

India only has a handful of malls that give space exclusively to super-luxury brands.

10th Year Of Festive Season Sales: 5 Trends That Will Define Clash Of Amazon, Flipkart, Meesho & Cos This Year

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October 7, 2023

Gargi Sarkar, Inc42

7 Oct 2023

The Indian ecommerce industry anticipates a stronger festive season compared to last year with over 20% sales growth, driven by the D2C segment’s expected 40% QoQ surge

The overlap of festive celebrations and wedding seasons, particularly with a later Diwali this year, is predicted to further stimulate demand

Despite the evident purchase intent, retailers are preparing for a possibly neutral festive season as economic challenges may hit consumers’ spending

As the festive season rings in its 10th anniversary in the ecommerce realm, giants like Flipkart and Amazon are prepping for their annual mega sales, set to begin on October 8. This year, however, they will face tough competition from newer players, including Meesho, which carved out a significant slice of the festive sales pie last year.

With new entrants like Tata Neu and JioMart, and fashion and lifestyle ecommerce players such as Myntra, Nykaa, and AJIO, the stage seems to be set for a fierce showdown.

For these ecommerce platforms, the annual festive sales aren’t merely about revenue generation; they’re pivotal customer engagement and acquisition opportunities. These events lure consumers with compelling discounts and promotions, giving a considerable boost to their yearly sales targets.

Through strategic marketing blitzes, they also aim to amplify brand recognition and glean insights into shopper preferences. Following last year’s subdued festivities, market analysts have predicted a revival in shoppers’ enthusiasm this year, forecasting a robust 20% surge in sales.

The festive season this year is set to witness a remarkable upswing in the ecommerce sector’s gross merchandise value (GMV). According to consulting firm Redseer, the GMV is anticipated to see an 18-20% surge, amounting to INR 90,000 Cr, a leap from INR 76,000 Cr in the previous year.

“The preceding quarter (April to June) witnessed a subdued performance in both offline and online retail sectors, primarily due to persistent inflationary pressures. However, the scenario is expected to undergo a transformation during the upcoming festive season. Festive periods tend to unleash latent consumer demand, prompting individuals to open their wallets more liberally,” Ashish Dhir, EVP (consumer and retail) of business consulting and services firm 1Lattice said.

There is a growing focus on electronics and appliances as traditional categories of interest. However, fashion and beauty are also emerging as important categories. The emergence of luxury goods is another important segment, which will likely make waves during the upcoming festive sales.

The ecommerce industry anticipates a stronger festive season compared to last year with over 20% sales growth, driven by the D2C segment’s expected 40% quarter-over-quarter (Q0Q) surge. However, average user spending is likely to remain flat.

Further, Tier III cities and beyond are becoming key revenue contributors, particularly in the fashion and beauty categories. Although consumer sentiment has improved, retailers are wary that buyers could maintain a cautious stance when it comes to spending lavishly.

While there is much to look forward to, let’s delve deeper into what shoppers and retailers can expect from this milestone year, which marks 10 years of festive sales fervour in the Indian ecommerce space.

D2C Brands To Lead The Charge

Notably, the Indian market is projected to have 500 Mn+ online shoppers by 2030, growing at 12% compound annual growth rate from 205 Mn in 2022, according to a 2020 report.

As far as the upcoming quarter is concerned, industry experts forecast that the homegrown ecommerce sector will likely see impressive growth of over 20%.

Playing a pivotal role in this escalation will be the D2C segment, predicted to grow more than 40% QoQ from October to December. Established ecommerce giants like Amazon, Flipkart and Meesho could also be looking at an approximate 30% uptick in sales, according to experts.

Tracing back to the inaugural ecommerce festive sales in 2014, the industry’s GMV was recorded at INR 27,000 Cr. Fast forward to 2023, the GMV is poised to touch an impressive INR 5,25,000 Cr, a nearly 20-fold increase, per a RedSeer report.

Festive Ecommerce OffersAverage User Spending Could Remain Muted

Despite the rise in GMV in 2022 compared to 2021, average expenditure per shopper held steady at INR 5,200 during the initial four days of the festive season sale, according to a RedSeer report.

This year doesn’t seem poised for a significant spike in individual user spending either. However, there is a silver lining in the form of rising consumer activity in smaller towns and cities. On the flip side, elevated living costs in metropolises like Bengaluru and Mumbai could dent extravagant consumer spending, noted Devangshu Dutta, the founder and CEO of Third Eyesight, a boutique management consulting firm.

Yet, with the growing online shopper populace in these cities, there’s potential for the average order value (AoV) to reduce as more users flock online to shop.

“As the online shopping base continues to expand, the average spending per user naturally tends to decrease. This phenomenon occurs as more people venture into ecommerce, with platforms like Amazon and Flipkart extending their reach to cover a broader audience. However, it’s essential to note that this drop in the average ticket size is a common trend when the customer base expands,” Sangeeta Verma, director of digiCart India said.

Consumers Sentiment Positive, But Retailers Remain Realistic

With the waning impact of inflation, India is witnessing a positive shift in consumer sentiment from the previous year. Unlike several developed nations wrestling with inflation, India has remained largely untouched by its dual impact on demand and supply, experts suggest.

For example, Flipkart delivered strong gross merchandise value (GMV) and sales growth in the company’s second quarter of the financial year 2023-24 (FY24), Walmart’s chief financial officer John David Rainey said during an earnings call.

“In India, the distinguishing factor in terms of festive demand is that it’s not merely brand-driven; consumers here are eager to spend, and the purchase intent is notably high. Unlike some developed economies grappling with inflationary concerns, both the demand and supply sides in India have not seen any impact of inflation. The consumer demand continues to stay buoyant,” Chirag Tanjeja, cofounder and CEO of GoKwik said.

The overlap of festive celebrations and wedding seasons, particularly with a later Diwali this year, is predicted to further stimulate demand, 1Lattice’s Dhir added.

Nevertheless, a note of caution reverberates among retailers. Despite the evident purchase intent, retailers are preparing for a possibly neutral festive season as economic challenges may hit consumers’ spending.

However, a recent study conducted by Nielsen Media India and commissioned by Amazon India says otherwise. According to the report, 81% of consumers are enthusiastic about shopping during the upcoming festive season. More importantly, this positive sentiment towards online shopping is not limited to metropolitan areas but Tier II and III cities and towns.

Ecommerce Platforms Ramp Up Efforts To Woo Sellers

In this year’s festive season, a standout trend is ecommerce giants’ intensified drive to court and captivate sellers with multiple strategic offerings like enticing commission rates, equipping them with advanced selling tools, enhancing the overall selling experience, and broadening their outreach.

Recently, ecommerce heavyweight Meesho made its platform accessible to non-GST registered sellers too. Not too behind in the race is Amazon India, which unveiled its multi-channel fulfilment (MCF) last month for D2C brands and retailers. This initiative is expected to aid sellers in managing customer orders from diverse channels.

Meanwhile, Flipkart flaunted its impressive seller growth, citing a tally surpassing 1.4 Mn — a notable 27% jump since 2022. Meesho currently has a seller base of 1.3 Mn and Amazon has over 1.2 Mn sellers.

Echoing the seller-side optimism, digiCart’s Verma said, “As a seller, we hold a very bullish sentiment. We’re so confident that we started stocking up well in advance. The robust build-up is evident from the current numbers. Mature sellers will expand into existing and new categories after.”

A recent survey by Redseer revealed that sellers are projecting a 15% increase in festive sales year-on-year. Even though the recent sales momentum on ecommerce platforms has been somewhat subdued — with only 40% of those surveyed reporting a 10% quarterly hike — there’s palpable enthusiasm for a significant festive sales boost across a multitude of product sectors.

Who Will Drive The Festive Ecommerce Growth?

Tier II and III cities and towns are expected to be the biggest contributors in this year’s festive season sales. According to experts, customers from these cities and towns are keen on giving their wardrobes and beauty kits a festive makeover. Although Tier I cities are spoilt for choice with numerous offline stores, spanning both legacy and contemporary brands, such luxuries are scarce in smaller cities.

However, this is steadily changing now. Some of the prominent D2C brands that have emerged from the country’s Tier II & III towns and cities are Raipur-based Drools, Mohali-based Lahori, Kanpur-based Phool, Coimbatore-based Juicy Chemistry, just to name a few.

Furthermore, consumer demand in the eastern regions of the country, along with enhanced connectivity in the Northeast, is also on the rise. Semi-urban and rural areas are fast emerging as the driving force behind the new wave of ecommerce growth, a trend expected to be pronounced during the festive season.

Considering that a whopping 65% of India’s populace resides in rural regions, the untapped ecommerce potential is immense, according to the Economic Survey 2022-23.

Yet, fostering trust will be paramount. Residents in these regions typically bank on word-of-mouth endorsements and recommendations from local retailers when exploring new products and brands. This is expected to give local D2C brands a much-needed boost in the upcoming festive season.
What’s Beyond The Festive Sale Fervour

As festive trends leave their mark in the ecommerce landscape, we’re likely to witness several transformative strategies. Central to this evolution will be Buy Now, Pay Later (BNPL) schemes. Yet, the traditional cash-on-delivery remains a preferred choice for many.

Ecommerce brands are increasingly prioritising customer retention, recognising that fostering enduring relationships offers more value. This shift is evident in the rise of loyalty programmes.

Notably, Flipkart introduced “Flipkart VIP” – a direct competitor to Amazon’s Prime – right before the festive sales kickoff. Simultaneously, Meesho debuted a loyalty initiative, targeting both customers and sellers.

Apart from the dominant themes, a few other noteworthy trends are slated to redefine the festive shopping narrative. Black Friday, for instance, is set for a revamp. Gen Z’s influence, especially their propensity to favour specific brands, will be significant.

Last year, for D2C brands, the Black Friday event overshadowed the traditional Diwali and Dusshera festivals in sales figures. GoKwik data indicates that brands on their platform saw a staggering 63% rise in GMV during the Black Friday sale, contrasting starkly with the 10-day Diwali sales.

Also, Christmas, too, is evolving. The allure of winter holidays and modern gifting practices are propelling this transformation, turning Christmas into a significant commercial event.

Given that the final leg of 2023 (October to December) will host almost all the major Indian festivals, the ecommerce players are in for a treat. Even though there will be a lot of cut-throat competition among ecommerce players, there will be no dearth of opportunities for them to woo customers who are eager to splurge to add more flavours to their festive celebrations this year. Going ahead, we will keep a close eye on the ecommerce players and D2C brands that will emerge triumphant after the great Indian festive showdown.

(Published in Inc42)

Qatar Investment Authority invests $1 billion in Reliance Retail – CNBC segment

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August 24, 2023

On CNBC-TV18 | Reliance Retail has established a dominant position and the growth trajectory remains robust – Devangshu Dutta of Third Eyesight tells Prashant Nair, Nigel D’Souza and Sonia Shenoy.

Fine jewellery catches fancy of corporates, PE players

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August 23, 2023

New Delhi, 23 August 2023

Bindu D. Menon, Financial Express

Tata Group’s Titan Company is not the only one to be bullish on the fine jewellery segment by recently raising its stake in CaratLane from 71.09% to 98.28% for a consideration of Rs 4,621 crore. Other corporate groups as well as private equity firms who have entered this segment are making investments and scaling up.

For instance, recently, Aditya Birla Group entered the gold jewellery market with the launch of Novel Jewels with an estimated investment of Rs 5,000 crore. It also plans to launch large-format jewellery formats and in-house brands.

“The younger generation’s changing style preferences and shopping habits have favoured the growth of jewellery chains and a shift in jewellery designs to lighter, more contemporary styles. This has also facilitated the delinking of the cost and the product price to some extent,” said Devangshu Dutta, Founder, Third Eyesight.

Analysts following the sector said that lighter weight jewellery have been a game changer for the industry. Moving away from the traditional 22 carats jewellery line, younger consumers are opting for 12, 14 and 18 carat jewellery in minimalist designs; a trend largely mimicked from the western markets.

From the companies’ perspective gross margins are invariably higher in design enhanced jewellery as compared to traditional designs.

Leading silver jewellery brand Giva jewellery too had recently bagged a Rs 200 crore funding led by Premji Invest to expand its product line. The round also saw participation from existing investors such as Aditya Birla Ventures, Alteria Capital and A91 Partners. Giva reportedly launches 250 new designs every month, as per the company’s disclosure.

“We look forward to leveraging Premji Invest’s playbook on omnichannel across several consumer brands and retail businesses to strengthen our leadership position and establish our pan India presence,” said Ishendra Agarwal, founder and CEO, Giva.

Giva plans to use the capital for inventory management and expanding its offline presence in India. The company has secured Rs 130 crore funding till date, excluding the current funding.

Fine jewellery in India are priced between Rs 5,000 to Rs 50,000. Major players in the segment include Caratlane, Tanishq, Bluestone among others.

(Published in Financial Express)