A decade ago, Kanika Tekriwal worked for the private aviation vertical of investment giant IndiaBulls. The experience emboldened her to set up in April 2014 JetSetGo.com, which connects private jet operators to wealthy customers seeking their services. "High net worth households spend most on jewellery, followed by travel," she says. But although there are about 130 jet operators in India, there was no standard means of hiring private jets before she started. On the one hand, jet owners struggled to find customers. On the other, customers went from one broker to another looking for available planes and often faced last minute cancellations due to inefficient communication or insufficient information.
JetSetGo has set up an online marketplace where jet operators list their inventory and customers book their flights, which can cost anything between Rs 60,000 and Rs 70 lakh, depending on the distance and seating available on the aircraft. (A 16-seater jet from Bangalore to Srinagar, and back, would cost Rs 60 lakh to Rs 70 lakh for a single flight.) The company gets about 20 enquiries a day and books at least one flight. Apart from the splurging rich, customers include corporate houses, tourist groups, or those needing air ambulances in a medical emergency. Among its investors are cricketer Yuvraj Singh's YouWeCan Ventures. "These luxury planes are amazing," adds Tekriwal. "They are like a flying home. The food and other services are extraordinary."
Exclusively founders Sunjay Guleria and Mohini Boparai-Guleria. (Photo: Vivan Mehra)
JetSetGo is only one of many. Exclusively.com, which was set up in 2010 and sold only luxury fashion and lifestyle products, made an impact strong enough for it to be acquired by Snapdeal in February this year. (Snapdeal has set itself a target of $2 billion in gross merchandise value from the fashion business alone by the year-end.) Exclusively started as a flash sales site modelled on US-based website Gilt, and later pivoted to the marketplace model and setting up online stores for other designers.
Exclusively.com, which was set up in 2010 and sold only luxury fashion and lifestyle products, made an impact strong enough for it to be acquired by Snapdeal in February 2015Yet another is Nykaa, whose range of beauty and personal care products includes luxury brands such as Calvin Klein, Davidoff, Giorgio Armani, L'Occitane and Roberto Cavalli. Started by Falguni Nayar, former CEO and Managing Director of Kotak Bank, it has, apart from its online channel, one store at Delhi Airport opened last year and plans three more soon at select locations. About 60 of the 356 brands it stocks are premium to luxury ones.
The company raised Rs 20 crore from private investors last year and is looking for another Rs 60 crore this year. "The biggest challenge is competing against counterfeits," she says. "Genuine products from well known brands are often not available at a discount. But the counterfeit ones are." She sticks to the inventory-led model, sourcing products only from the company or authorised distributors rather than employ the marketplace model where ensuring quality and genuineness of products is a challenge.
Nykaa founder Falguni Nayar. The company's range of beauty and personal care products, include luxury brands such as Calvin Klein, Davidoff and Giorgio Armani.
Mumbai-based Envoged.com sells branded luxury products too, but with a difference - it offers used luxury products, not new ones, on which heavy discounts can be freely given. Started in March this year by Anandita Singh, Manisha Baranwal and Sahil Narang, the first two batchmates at IIT-Kharagpur, it currently stocks around 400 products, having sold about 100-150 so far. Any individual seeking to sell a used, branded product can upload its image on the site, which is then vetted. The physical product, too, is subjected to the concerned brand's authentication tests, and its degree of wear and tear examined before it is accepted and a price put on it. "We are meeting aspirations by providing very high discounts," says Baranwal. A Louis Vuitton bag, in good condition, for instance, originally bought for Rs 55,000 was recently sold for Rs 21,000. Envoged has raised funding from a clutch of investors including former Canaan Partners' Managing Director Alok Mittal, Indian Express's Anant Goenka and the Nijhawan Groups Ankush Nijhawan.
Counterfeit products have proved a bugbear for Delhi-based Darveys.com, begun by 24-year-old Nakul Bajaj in October last year. This members-only site offers global luxury brands at prices 30 to 70 per cent lower than retail stores and claims partnerships with 287 luxury boutiques as well as with brands such as Miu Miu, Prada, Fendi and Luly Guinness. The site has reportedly been charged by several brands for selling fake, discounted products and has also been castigated by companies like Jimmy Choo and Burberry for selling their products without a warranty and for infringement of trademark.
"The biggest challenge is competing against counterfeits. Genuine products from well known brands are often not available at a discount. But the counterfeit ones are"With the number of high net worth individuals in India rapidly increasing, such services are bound to grow. A KPMG report on India's luxury market pegged it at $8.5 billion in 2013 and predicted it would grow to $14 billion by 2016. In 2013, India had 55 people on Forbes' global billionaire's list, with a total net worth of $194 billion, up from just nine in 2004.
"Traditional definitions and characteristics of luxury consumers are evolving with increasing awareness among consumers. This is creating a host of opportunities for the existing and new players," the report said.
Start-ups have risen to cater to those too busy to run their own errands, such as, for instance, the US-based Magic or the Indonesia-based YesBossGiven this growth, other kinds of services for the wealthy, available elsewhere in the world, could well be replicated here. Start-ups have arisen to cater to those too busy to run their own errands, such as, for instance, the US-based Magic or the Indonesia-based YesBoss. India, no doubt, has its grocery delivery apps, but these go much further - they supply any product sought (provided doing so is legal!) at the summons of a mere SMS. A response arrives within minutes - a guaranteed five to seven minutes in the case of YesBoss. Industry experts, however, note such services have their pros and cons in Indian conditions - the cheap labour available is an asset, but scalability remains a problem, especially coping with too many orders coming in at the same time.
Globally, there is also a segment of the 'sharing economy' catering exclusively to the very wealthy, which could well be replicated in India in coming years. Start-ups such as the London-based Onefinestay.com or the Montreal-based Luxury Retreats.com specialise in listing luxury homestays. They aspire to compete with luxury hotels, not the regular sharing sites, exemplified by the US-based Airbnb. Indeed, to differentiate itself, Onefinestay also offers concierge-on-call services to fulfill every kind of mundane needs for the guests, a free iPhone and free WiFi. It vets both guests and the quality of homestays before putting the two in touch. In the five years since its launch, Onefinestay has started operations in London, Paris, New York and Los Angeles, and has raised funding of $80 million so far.