<img class="gwt-Image" src="/photo/49919930.cms" style="width: 800px; height: 600px;" />Unexpectedly, 35 per cent of the sales of <a href="http://www.businessinsider.in/searchresult.cms?query=luxury+brands+">luxury brands</a> in India are coming from non-metro cities like Aurangabad, Ludhiana, Kochi and Bellary, and it has posed a challege to <keyword id="6574071" type="UNKNOWN" weightage="100" keywordseo="Luxury-brands">luxury brands</keyword> who now need to try much harder to tap the ready to spend but very smart consumer group in such places, according to the new <keyword id="3149795" type="UNKNOWN" weightage="100" keywordseo="CII-IMRB-report">CII-IMRB report</keyword>. 

	The report, titled 'Emerging Consumers of Luxury, India tier 2 and 3', states that despite low engagement and outreach by luxury brands, sales through references in tier 2 and tier 3 cities are twice as much as those in the metros, and that the growth rate of luxury product and service consumption these cities has been outpacing metros for the past three years. The key Indian cities which contribute to the rising luxury and premium goods consumption are Ahmedabad, Pune, Nagpur, Hyderabad and Ludhiana, which account for 16 per cent of total luxury sales. 
 

	The report is based on data collected from both primary and secondary sources and respondents included both male and female high-networth individuals in the age group of 20-55 years with an annual household income of over Rs 1 crore. The report covered tier 2 and tier 3 towns like Chandigarh, Ludhiana, Kanpur, Coimbatore, Anand, Bhopal, Patna, Kochi and Rajkot. According to the report, consumers valued quality the most in luxury products at 75 per cent, followed by the luxurious aspect (69 per cent), style (64 per cent), modernity (63 per cent) and reliability (61 per cent). 
 "I definitely feel that there are a lot of luxury buyers in the interiors of India, a section that is still largely unexplored by brands. We've only touched the tip of the iceberg in the main metros," said Sanjay Kapoor, founder and managing director of Genesis Luxury, which sells brands like <keyword id="157707" type="PERSON" weightage="100" keywordseo="Jimmy-Choo">Jimmy Choo</keyword>, Bottega Veneta, Canali, <a href="http://www.businessinsider.in/searchresult.cms?query=Armani+Jeans">Armani Jeans</a> and Giorgio Armani. "A lot of our clients from smaller towns visit our stores in the metros regularly. These people also travel overseas and shop there. At times we also organise home shopping for some key clients upon request," he added.
 While men like to spend on <keyword id="6362766" type="PERSON" weightage="100" keywordseo="Apparel">apparel</keyword>, accessories as well as gadgets and cars, according to the report peer pressure plays an important role in the decision-making of women, who like to buy jewelry, apparel and accessories. Younger people up to age 35 showed an inclination towards financial and individual values compared with the older ones, while consumers above 35 exhibited an inclination towards the uniqueness of the product. 

	"The smaller cities have huge spending capacities and we end up underestimating them. It is our privilege to have a loyal customer base from these cities. People are indulging in luxury of all kinds. Be it cars, watches, fine dining, thematic weddings and elaborate wedding trousseaus and luxury holidays. High-priced watches from the Swiss watch brands are preferred and bought and we provide a huge variety which they keep coming back for," said Yasho Saboo, CEO and founder of Ethos Watch Boutique, which sells brands like Carl F Bucherer, Omega, Rado and Longines in India. 
 Arvind Singhal, chairman of <keyword id="156794" type="CITY" weightage="100" keywordseo="Technopak-Advisors">Technopak Advisors</keyword>, said the top 14-15 cities are driving the bulk of growth for luxury brands and consumers in cities like Chandigarh and Ludhiana are very well acquainted with them. Rajat Wahi, partner and head consumer markets at <keyword id="50041" type="CITY" weightage="20" keywordseo="KPMG">KPMG</keyword> in India said luxury, automobile and jewellery brands have gone beyond the trunk-show model and have set up showrooms, retail outlets in tier 2 and smaller cities. 

	"This is primarily since the market for luxury automobiles and jewellery outside the metros is now larger. A German luxury car maker estimated 60 per cent of its sales to be outside of Delhi and Mumbai," he added. 
	 
	(Image credit: BCCL)

India’s luxury brand market to be driven by tier 2, 3 cities: Report

<div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5b8fd6ea8ea82fcc3a8b53f0-1396/screen shot 2018-08-14 at 111329.png" border="0" alt="Jeff Bezos India" data-mce-source="Reuters" />ReutersAmazon CEO Jeff Bezos on a visit to India in 2014.</div></div></div><ul class="summary-list"><li><a href="https://markets.businessinsider.com/stocks/amzn-stock">Amazon</a> is in talks to acquire a 26% stake in India's <a href="https://relianceretail.com/">largest</a> brick-and-mortar retailer, according to <a href="https://economictimes.indiatimes.com/industry/services/retail/amazon-may-shop-for-stake-in-reliance-retail/articleshow/70474456.cms">The Economic Times</a>.</li><li>The deal could give Amazon access to Reliance <keyword id="6354851" type="UNKNOWN" weightage="60" keywordseo="retail">Retail</keyword>'s vast network of stores, which could prove to be invaluable for its fulfillment of online grocery orders in the future.</li><li><a href="https://www.businessinsider.com/amazon-driving-adoption-in-india-2019-1?r=US&amp;IR=T">Analysts</a> say that India's ecommerce market has massive potential for growth. It is <a href="https://e.businessinsider.com/click/15587465.1895/aHR0cHM6Ly93d3cuaWJlZi5vcmcvaW5kdXN0cnkvZWNvbW1lcmNlLmFzcHg/5bc4a934678089748b04a3b4B3fbb784e" target="_blank" rel="noopener">expected</a> to be worth $200 billion by 2026, up from $38.5 billion in 2017.</li><li>Amazon is the current leader in India, racking up sales of $8.8 billion in 2018. However, Walmart-owned Flipkart is expected to <a href="https://www.businessinsider.com/flipkart-will-overtake-amazon-india-2019-3?r=US&amp;IR=T">overtake it for the top spot by 2023</a>.</li><li><a href="https://www.businessinsider.com/?hprecirc-bullet">Visit Business Insider's homepage for more stories</a>.</li></ul>Amazon is eyeing up India's largest brick-and-mortar retailer, according to <a href="https://economictimes.indiatimes.com/industry/services/retail/amazon-may-shop-for-stake-in-reliance-retail/articleshow/70474456.cms">The Economic Times</a>.Two senior executives told the Indian newspaper that Amazon is in talks to acquire a 26% stake in Reliance Retail - the retail arm of Reliance Industries, which is controlled by Mukesh Ambani, one of the richest men in India with a <a href="https://www.forbes.com/india-billionaires/list/">net worth of $47.3 billion.</a>Reliance, <a href="https://relianceretail.com/key-facts.html">which says it serves 5 million customers a week</a>, was previously in talks with China's Alibaba Group but the deal fell through because of differences in valuation, the two sources said.This deal would give Amazon access to Reliance's vast network of stores in India, which number 10,415, and its telecoms platform, Jio, which could prove to be invaluable for its fulfillment of online grocery orders in the future.Read more: <a href="https://www.businessinsider.com/amazon-driving-adoption-in-india-2019-1?r=US&amp;IR=T">Amazon is trying to expand its reach in India's soon-to-be $200 billion e-commerce market</a>Being connected to one of the most powerful companies and families in India could also put Amazon in a better position when it comes to lobbying against the Indian government, especially as <a href="https://www.reuters.com/article/us-india-ecommerce-explainer/explainer-what-are-indias-new-foreign-direct-investment-rules-for-e-commerce-idUSKCN1PP1Y2">rules around how foreign companies can operate</a> within the country have become more stringent."There could be synergies which are beyond retail," Arvind Singhal, chairman of retail consultant Technopak Advisors told <a href="https://www.reuters.com/article/us-reliance-retail-amazon-com-stake/amazon-in-talks-to-buy-stake-in-indias-reliance-retail-et-idUSKCN1UR376">Reuters</a>. "Whenever there is any kind of policy intervention needed, to be a partner with Reliance certainly will be a big asset."Amazon did not immediately respond to Business Insider's request for comment. It declined to comment when contacted by The Economic Times. "As a policy, we do not comment on media speculation and rumours," a spokesman for Reliance said in a statement to Business Insider.The partnership would be mutually beneficial, however. Reliance stands to benefit from having access to Amazon's giant ecommerce platform and potentially being able to use its technology, supply chain, and logistics platform as it aims to connect its stores digitally through its telecoms network, Reuters wrote.Analysts say that the Indian ecommerce market has enormous potential for growth. <a href="https://www.businessinsider.com/amazon-driving-adoption-in-india-2019-1?r=US&amp;IR=T">It is expected to be worth $200</a> billion by 2026, up from $38.5 billion in 2017, according to the India Brand Equity Foundation.But while Amazon is the current leader in the market - racking up sales of $8.8 billion in 2018 - competition is continuing to heat up. According to <a href="https://www.businessinsider.com/flipkart-will-overtake-amazon-india-2019-3?r=US&amp;IR=T">recent data from Edge by Ascential</a>, Walmart-owned Flipkart is poised to overtake Amazon for the top spot by 2023.<a href="https://www.businessinsider.com/intelligence/40-big-tech-predictions-for-2019?IR=T&amp;itm_source=businessinsider&amp;itm_medium=ctgr_bii&amp;itm_term=ctgr_leadgen&amp;itm_content=amazon&amp;itm_campaign=40-big-tech-predictions-for-2019-2"><img src="https://static.businessinsider.com/image/5d371804a13c9573827f1cb9" alt="Exclusive FREE Slide Deck: 40 Big Tech Predictions for 2019 by Business Insider Intelligence" border="0" style="width: 100% !important" /></a> <div class="margin-top"> <h3>NOW WATCH: <a href="https://www.businessinsider.com/robotic-farm-uses-90-less-water-than-traditional-farming-2018-10">This robotic farm uses 90% less water than traditional farming</a></h3> <div> <iframe class="bijwplayerclass" data-player="jwplayer" src="https://content.jwplatform.com/players/FgrxR161-CEZHWCBG.html" width="100%" height="100%" frameborder="0" scrolling="auto" style="margin:0px;" allowfullscreen=""></iframe><script>function receiveMessage(event){ console.log(event.data.fullscreen); Android.fullscreen(event.data.fullscreen); }window.addEventListener("message", receiveMessage, false);</script> </div> </div>

Amazon is reportedly in talks to acquire a 26% stake in a huge Indian retailer, meaning it will dominate a $200 billion market

<img class="gwt-Image" src="/photo/51438389.cms" />Aggrieved sellers on <a href="http://www.businessinsider.in/searchresult.cms?query=amazon">Amazon</a>, <a href="http://www.businessinsider.in/searchresult.cms?query=flipkart">Flipkart</a> and <a href="http://www.businessinsider.in/searchresult.cms?query=snapdeal">Snapdeal</a> are raising their voices against a penalty by these <a href="http://www.businessinsider.in/searchresult.cms?query=marketplaces">marketplaces</a> and have even formed an eSeller Suraksha Forum for the same. 
 
Sellers have complained that the marketplaces are penalising them in case of an opened packaging and returned item. 
 Around 1,000 sellers have conveyed that <keyword id="18635" type="CITY" weightage="20" keywordseo="Amazon">Amazon</keyword>, <keyword id="6354742" type="COMPANY" weightage="20" keywordseo="Flipkart">Flipkart</keyword> and <keyword id="541988" type="COMPANY" weightage="20" keywordseo="SnapDeal">Snapdeal</keyword> do not share logistics costs or returning commissions in case a customer opens the package and then doesn't want the item. 
 
Instead, sellers say the marketplaces put the blame on them, saying the product they shipped was fake or faulty products leading to return. 
 
"In case of a customer return (where the customer has opened the package) we have to (still) pay commission to the platforms. In case of courier return (where packaging is intact), we don't have to pay commission," a seller told ET. 
 
The <a href="http://www.businessinsider.in/searchresult.cms?query=return+of+products">returns</a>, sellers say, have shot up and are mostly from Uttar Pradesh, where the sellers have stopped shipping in many areas. 
 
Arvind Singhal, chairman of consultant Technopak Advisors, told ET, “There could be multiple reasons for this. First, with high penetration of smartphones, there are non-serious buyers who order for the sake of fun, like window shopping on ecommerce sites.” 
 
Secondly, he said, in categories such as <a href="http://www.businessinsider.in/searchresult.cms?query=apparel">apparel</a>, footwear, etc, touch and feel could be different from what it looks like on the website. 
On the contrary, Amazon and Flipkart said the returns had declined. 
 
"Our returns process is designed to create a win-win situation for both our customers as well as sellers," a Flipkart spokesperson said, adding “Majority of our sellers have significantly lower return figures compared to the industry. We have an easy return policy for our sellers which ensures prompt returns as well as exchanges." 
 
Likewise, Snapdeal too said that returns had declined. 
 
"The returns on the Snapdeal platform have steadily gone down over the last one year due to introduction of various technology upgrades and tighter monitoring of quality aspects," a Snapdeal spokesperson told ET.

Sellers on Amazon, Flipkart, Snapdeal cry foul over rising return of products; marketplaces have different numbers

<img class="gwt-Image" src="/photo/48199393.cms" /> 
With just a few more months to go, the countdown for the festive days of Diwali has begun. If not for you, at least definitely for the e commerce players diwali is almost here. Flipkart and Snapdeal are gearing up to get the deal fireworks started! 
 
Both the companies are in talks with a number of investors since 6 months now. While competition is getting tough, especially in this segment, increasing valuation mismatches and performance pressures have made the struggle to get funds a mark tougher. 
 
Bengaluru-based Flipkart is said to be raising $1 billion (Rs 6,300 crore) from its existing investors at a post-money valuation of $15 billion, according to a news report by The Economic Times. 
 
The new round of funding will come from existing investors like Tiger Global and DST Global, sources have informed the financial daily. 
 
Even rival Snapdeal is engaged in negotiations with Taiwanese corporate giant Foxconn Technologies along with Chinese etailer Alibaba and existing investor SoftBank to raise as much as $1 billion, according to three sources. Two of them said that the investment from Foxconn has been finalised, and one indicated that that the Apple iPhone-maker has committed up to $600 million to Snapdeal. 
 
But talks with Alibaba have been stuck on valuation, as Snapdeal is targeting a post-money valuation of around $5 billion while Alibaba does not want to pay over $3.5 billion, prolonging closure of the deal. 
 
"This is a speculation and as a policy, we do not comment on speculations," said a Snapdeal representative. "As a listed company, we typically do not comment on markspeculations. If any material events happen, we will put out formal announcements," said Vincent Tong, head of Foxconn's investment arm, in an emailed response to ET queries. Alibaba did not reply to ET's queries. A Flipkart representative declined to comment. 
 
The large financing rounds come after a fundraising lull at the two leading etailing giants this year, who between themselves raised nearly $3 billion in 2014 besides Amazon's commitment of $2 billion to India operations. But other players entering the space have also been able to attract funding, like Paytm's $575-million raise from Alibaba affiliate Ant Financial. 
 
And competition is only bound to increase as the online retailing industry grows in size to an estimated $50 billion by 2020 from $3 billion in 2014. 
 
"Within the next 12 months we will also see conglomerates like Tatas, Reliance and Aditya Birla Group throwing their hats in the ring in a much more forceful manner," said Arvind Singhal, founder of retail consultancy Technopak. "This doesn't give much of a headroom to current players to slow down their spend on marketing, infrastructure and discounting. Therefore the need to raise more funds will increase rather than decrease." 
 
Indian online retailers suffer gross losses of 35%, with much of it attributed to discounts, according to a recent Goldman Sachs report. The re port stated that etailers will need additional $20 billion in incremental cash infusion till 2020. 
 
Flipkart said that it is targeting annual gross merchandise value (GMV) run rate of $10 billion by early 2016, more than doubling the $4-billion mark that it crossed in April 2015. In March 2014 it had crossed the $1-billion mark, indicating a four-fold increase in GMV. Similarly, Snapdeal recently stated that it has reached GMV of $3.5 billion, indicating similar growth, as per the news report. 
 
But as etailers start operating with a larger revenue base and the initial euphoria around etailing starts ebbing, similar growth will be hard to achieve. A venture capital investor said that growth in 2014 was being fueled by new buyers coming on board, which has tapered this year. 
 
"The whole ecommerce wave last year erupted after hundreds of crores was spent on marketing and these firms brought in a new class of consumers on board who wanted to try ecommerce. But they haven't transformed into repeat buyers immediately, which for them will happen organically," he said on the condition of anonymity, underlining that with a larger base the rate of growth of etailer has been slowing. This is likely to have an impact on valuation multiples. 
 
For instance, Flipkart was eyeing a valuation of $18 billion for the new round of funding but is now closing the round at $15 billion, according to a person source privy to the details of the negotiations. 
 
"This is exactly how Future Group also built the business, which was borrowing money and their valuation was going up. In this case instead of borrowing Flipkart has been raising equity," Harminder Sahni, founder and managing director of Wazir Advisors, a management consulting firm told the ET. 
 
(Image: Thinkstock)

You Searched For "Technopak Advisors" and got 4 results

India’s luxury brand market to be driven by tier 2, 3 cities: Report

BI India Bureau

Amazon is reportedly in talks to acquire a 26% stake in a huge Indian retailer, meaning it will dominate a $200 billion market

Mary Hanbury

Sellers on Amazon, Flipkart, Snapdeal cry foul over rising return of products; marketplaces have different numbers

BI India Bureau

Diwali is coming: Indian ecommerce giants sun-dry funding crackers

BI India Bureau

You Searched For "Technopak Advisors" and got 4 results

India’s luxury brand market to be driven by tier 2, 3 cities: Report

BI India Bureau

Amazon is reportedly in talks to acquire a 26% stake in a huge Indian retailer, meaning it will dominate a $200 billion market

Mary Hanbury

Sellers on Amazon, Flipkart, Snapdeal cry foul over rising return of products; marketplaces have different numbers

BI India Bureau

​Diwali is coming: Indian ecommerce giants sun-dry funding crackers

BI India Bureau

Diwali is coming: Indian ecommerce giants sun-dry funding crackers