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When German luxury major Montblanc’s Indian arm — a 59:41 joint venture between the Hamburg-headquartered company and Titan — decided to offer its products through the e-commerce platform Tata CLiQ Luxury in April this year, little did it expect the response it got.
After all, it was an early mover when it comes to an uber luxury brand tapping online sales in India.
The first sale came from Kanpur, followed by more orders from Bilaspur, Raipur, Coimbatore and other tier-I and II cities.
“The majority of the online sales were coming from cities and towns where we do not have a boutique,” said Nicolas Baretzki, Chief Executive Officer, Montblanc International GmbH.
The surprise did not end there.
Buyers’ profile
The buyers were not necessarily young professionals or entrepreneurs or millenials who have grown up shopping online, but included people who were middle-aged and have been connoisseurs of luxury.
The most sought-after Montblanc products online so far have been leather accessories followed by writing instruments, especially consumables such as ink or ink cartridges.
Montblanc watches and limited-edition writing instruments are not available online yet. While the company maintains it is too early to reveal the numbers, officials reckon that online sales will soon grab a large share of the overall sales, if this early trend is indicative.
“This is yet more evidence that wealth in India is scattered across the country and so is the consumption of luxury products,” said a senior luxury retail expert, who did not wish to be identified. Montblanc writing instruments cost upwards of ₹20,000 and run up to a few lakh per piece, while the smallest of the leather accessories like card-holders cost ₹10,000 or more.
Maintain upscale image
Baretzki sees e-commerce is an opportunity rather than a threat. “E-commerce is about how you want to service your customers. We cannot tell them to buy only in our boutique or only online. We have to give them all the options,” he said.
Globally, uber luxury brands such as Louis Vutton, Chanel, Gucci and Montblanc are overcoming their inhibitions about e-commerce.
They no more fear loss of their exclusivity or commoditising of their brand.
They tie-up with luxury online marketplaces like Farfetch, Matchesfashion and Net-a-Porter to maintain their upscale image.
There is a reason for this change.
A recent Bain & Co report estimated that the global luxury market grew by 5 per cent in 2017, but online sales jumped by 24 per cent (millenials accounted for 84 per cent of this growth).
The report further added that by 2025 the share of online purchase of luxury goods will rise to 25 per cent from 9 per cent in 2017.
Expansion plans
The strong debut at Tata CLiQ is, however, not slowing Montblanc’s brick-and-mortar push in India.
It recently opened its tenth boutique in India, in Chennai, and plans to add five new stores every year for the next three years.
The future boutiques may well be located in towns where the online demand for the brands product is high.
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