Photo Credit: Screenshot/ Snapdeal
India’s e-commerce superstar Snapdeal just announced its acquisition of luxury fashion estore Exclusively. With this deal, Snapdeal plans to build an online luxury mall where top fashion brands can open their estores.
“We have witnessed a surge in demand from consumers across the country for premium and luxury products. Given that access to luxury brands is severely limited in our country, we have brought Exclusively into our family to provide our 40 million plus users access to the widest range of aspirational, high-end products, and services,” co-founder and CEO of Snapdeal Kunal Bahl says in an announcement on the acquisition.
Exclusively’s exclusive advantage
Currently, Exclusively has most of the leading designers in India, including Manish Malhotra, Tarun Tahiliani, and Ritu Kumar, fashion boutiques, and brands on its site. This Delhi-based startup, which also has an office in New York, was founded by Sunjay Guleria and Mohini Boparai-Guleria. “The partnership with Snapdeal comes at the right time. With increased awareness and growing disposable incomes, premium and luxury consumption in India is seeing a significant upward trend. With the geographical limitations of the brick-and-mortar model, we strongly believe that the luxury and premium segments can only be grown by sharing access with the consumer,” the founders say.
Pricey luxury items have been slow to pick up online sales, because people like to have a touch-and-feel to see if the products suit their individual tastes before shelling out big bucks. But this is changing. A recent McKinsey report says online accounts for only four percent of luxury sales, but it is growing twice as fast as overall sales. “By 2017, pure online sales of luxury goods should account for 6 percent of the sector as a whole,” the report states.
The major e-commerce players clearly think India is in step with this trend. Last year, Flipkart acquired fashion portal Myntra, and Amazon India even launched a multi-brand jewelry estore recently. Now Snapdeal has made its move.
Post acquisition, Exclusively will continue as an independent site, expanding its operations to smaller towns in India. According to the announcement, “Snapdeal, with its nationwide reach, robust technology platform and deep consumer insights, will help Exclusively scale up and expand its current business and reach.”
Four-year-old e-commerce marketplace Snapdeal, founded by Kunal Bahl and Rohit Bansal, has close to 100,000 sellers on board, and a distribution network spanning over 5,000 cities and towns in India. It scaled up quickly last year, especially in mobile m-commerce, and raised a whopping US$627 million investment from SoftBank, making it one of India’s highest funded tech startups.
Snapdeal is aiming to hit a GMV (gross merchandize value) of US$2 billion in its fashion category this year.
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