Middle East ‘E-tailers’ optimistic despite cautious consumers
A candid interview with Federica Mazza, Creative Director, Lemuda.com reveals how online retailers in the Middle East are sharpening their survival skills to beat the odds in this nascent market.
July 29, 2012 12:16 by Priyanka Pradhan
You’ve been in the Middle East Market for a while now, what have you learned about the Middle east consumer in terms of shopping for Luxury fashion online? Could you give us an insight into the consumption patterns of the typical consumer in the region?
Online shopping for luxury fashion has undergone a great change in the last 10 years in the Middle East. Due to a rapid rise in the number of Internet users and explosion of social media, there has been an increased awareness and acceptance of this convenient shopping method. Nevertheless, there is still some hesitation on part of the consumer to use credit cards online and hence we offer cash-on-delivery which is a more favored mode of payment.
Our consumers who are mainly Middle Eastern women have a great love for luxurious fashion and designer wear. They are aware of the latest fashion trends and follow them passionately and do not settle for anything less.
The main draw of Lemuda is the fact that it offers upto 70% discount on luxury and designer wear. How does Lemuda manage to make a profit despite offering such massive discounts year throughout the year?
Our business model focuses on featuring end-of-season designer products at great discounts, thus bringing these coveted labels within the reach of middle class and upper middle class segments of society. Our direct relationships with designers, manufacturers and official retailers worldwide, allows us to offer these exclusive prices for most popular brands and guarantee the authenticity for each and every item sold on our web site.
Of late, there has been a slew of online businesses in this region, offering heavy discounts on Luxury designer wear. How, in your opinion, does it affect the entire online business and impact the full price luxury designer stores?
The growing popularity of discount e-tailers in the region has definitely impacted the online business favorably. The opportunity to grab a bargain online has increasingly drawn many traditional shoppers to make an online purchase. Ultimately, this leads to consumer confidence in the domain of online shopping as a whole. As most discount e-tailers sell end-of-season products, full-price luxury stores will continue to appeal those who wish to own designer goodies straight off the runway. However, there is an increasing pressure on full-price luxury designer stores to have frequentmarkdowns to maintain consumer ppresence in their stores in this ever-changing trend of shopping.
Ecommerce is not a part of the Middle East region’s culture, in the sense that people are more comfortable buying clothing and apparel off the store racks rather than punch in their credit card numbers online. There is a lot of hesitation and suspicion about ecommerce networks amongst the Middle East consumers. Do you agree?
Nowadays, online shopping is a common way to shop as it is incredibly easy and secure. Nonetheless you are right, as people always wonder “how safe is it to shop online?” – Several people are apprehensive as they are unaware of the websites and their services and hesitant to divulge credit card information. To instill confidence in our consumers, our site is VeriSign certified and is completely safe to shop. We also offer an option to pay by cash-on-delivery and have equipped our organization with all the tools in order to safeguard our customers and serve them with complete transparency.
While purchasing heavily discounted merchandise, there’s always the question of authenticity. What is the assurance and guarantee you provide to consumers buying from Lemuda?
Lemuda ensures that each product sold on our website is 100% genuine. We deliver products to our customers in their original packaging as provided from the supplier. Our buying team located in Italy, verifies the origin of all products sold on our website and sources them only from suppliers and manufacturers who are authorized to deal in the luxury brands we offer.
What is the annual turnover of Lemuda’s online business? Has there been an increase in revenue from the Middle East and if so, by how much?
As Lemuda has been live to shoppers for just over six months, it is still too soon to comment on the annual turnover and revenue details. We have a road-map ready with projected growth over the next 5 years and we are very satisfied with the market response so far. In the future, we have drawn out plans to move to different regions and set up base in those regions with partners who would be beneficial for our customers to ensure our commitment of delivering on-time and providing outstanding customer service.
What are the main challenges faced by online retail businesses such as Lemuda, that offer heavy discounts on luxury designer wear?
The biggest challenge faced by Lemuda and online portals in the region is gaining customer confidence and reaching out to consumers. As shoppers in the Middle East are still hesitant to use their credit card for online purchases, we have introduced a cash-on-delivery service to let consumers feel confident in making purchases from Lemuda which stocks only genuine products from renowned brands. Also, with the entry of many new local shopping websites, there is a growing competition among different players in this sector.
Do you think online fashion retail will be the single biggest platform and will overshadow store retail in the Middle East in the near future?
Traditional fashion retail will continue to co-exist alongside the growing popularity of online shopping. Online fashion retail allows consumers the ease of getting their favorite products delivered to their doorstep and offers them a platform to compare prices and shop for only the best. In the Middle East, online shopping is still in its infancy and has a huge potential to grow. As shopping here is a social activity anda pastime for many, store retail seems to still rein strong for the next few years.