US flash sale site to be implemented in India by licensing
American LuxeYard, the fast growing boutique luxury flash sale site for luxury home furnishing, decor and fashion plans to expand to India under an exclusive licensing agreement with India veteran technology and retail entrepreneur Sashi Chimala known for his capabilities to create consumer brands and place them successfully in the market, might it be in India or the U.S.A.
Sashi Chimala will set up LuxeYard India with a motivated team formed for product acquisition, marketing and merchandising operations to manage the site. Together with the American team LuxeYard India will leverage the company’s existing e-commerce platform and operations infrastructure plus extensive knowledge of selling fashion, home furnishings and decor via the flash sale model. Braden Richter, CEO of LuxeYard, Inc. (USA) stated: “This exciting deal provides access to one of the fastest growing e-commerce markets in the world, where rising consumer spending power and demand for luxury goods will combine to help us achieve our revenue goals and business objectives”.
Findings from the Internet and Mobile Association of India tell us that non-travel e-commerce is amounting actually to 30% of the industry and is earmarked to grow tenfold to approximately USD 6 billion by 2015 (see also TextileFuture’s March issue of the e-paper www.textile-future.com). Other sources estimate that the e-commerce market will grow between USD 125 to USD 160 billion over the next 12 years. In the fiscal year 2010/11 e-commerce in India had a share of only 1 % or USD 10 billion of India’s retail sales and the same sources estimate that it will increase until 2016 to USD 84 billion and gain a share of 4.5 % of retail sales. It has to be added that today only around 2 % of India’s population are credit card holders and therefore e-commerce orders are usually cashed upon delivery leading to the fact that more goods are returned as if payment would have been effected by credit card. Flipkart is the most popular internet shopping site in India. It was founded by two former software developers at Amazon. Today, the site has more than 2 million customers and 18000 orders daily and the company has outlets in 37 cities and employs 4800 people. The company’s turnover in 2011/12 should reach USD 100 million but at the latest in 2015 it should reach USD one billion however, profitability after taxes is stil in the red and since the Flipkart was founded in 2007.
In addition to the India new venture LuxeYard secured further international territory and is also present in Australia and New Zealand. LuxeYar will be at the reins in view to all intellectual property related to the venture.