The 'by invitation only' shopping portals, a popular concept in the US, are now slowly taking roots in
India. In this format, designer and premium brands in products like clothes, watches, shoes and accessories are sold at discounted rates in the range of 40-50%.Three out of just about 6-7 companies that play in the space have received private investments in the past two months. The latest deal was struck earlier this month when private shopping site for luxury brands and designer apparel Fashionandyou-. com raised $8 million from Sequoia Capital India. Last month, Helion Ventures and Accel Partners invested $2.8 million in Exclusively.in, and Germany's multimedia group Axel Springer AG acquired 19.1% stake in BagIt-Today .com.
And these are only the deals which have been announced. Some say there are other VCs which have made small investments that are yet to be announced.
Other major players in this segment include Brandmile and 99 Labels. While the industry is estimated at around $50-100 million, the growth potential is forecast to be substantial.
Rahul Chowdhri, VP, Helion Advisors, said that some of these portals are currently clocking sales of around Rs 40-60 lakh a month. The portals source these products, which are typically highmargin merchandise, directly from the brands or international dealers and sell them at discounts of up to 50% of their original price.
From the merchandisers' perspective, these portals serve multiple purposes such as offloading out-of-season or excess stock or even offering a new way of branding or marketing their products.
Membership is invitation based and the portals are like private shopping clubs that provide members with access to fashion and luxury brands at insider prices. Though membership is not as stringent as it is in the US, it is based on certain parameters like buying capacity. Harish Bahl, founder of Fashionandyou .com, said the portal works on thin margins.