Luxe Brands take legal course to curb e-sales of fakes and second-hand products

NEW DELHI: In the nascent market for luxury goods, international brands are taking steps to protect their turf from alternative platforms, mostly online marketplaces, which offer, what they claim, are genuine bags, shoes and clothing at as much as half the price of products sold at exclusive retail stores here.
A few online portals have emerged in the recent past in India, selling products ranging from Alexander McQueen dresses to Fendi bags at"highly competitive prices" on the back of"intelligent and legal business models".

One such website, Darveys-.com, has caught the attention of brands such as Jimmy Choo, Judith Leiber and Christian Louboutin, which have initiated legal proceedings against the startup to stop it from selling their products online in India. Fashion houses are not only going after such businesses but also alleging they could be selling fakes or second-hand products.

Luxury French shoe and bag designer Christian Louboutin has filed a case against Darveys.com for"infringement of trademarks, publicity rights, passing off, unfair competition, dilution, damages, rendition of accounts and delivery up against the defendants".

Genesis Luxury, which has the exclusive rights to market Jimmy Choo shoes in India, has also taken similar action. When the Indian partner of high-end clutch brand Judith Leiber noticed that the bags were being sold on the same platform at a much lower price, it informed the parent company and took stock of the situation.

“There are a limited number of handbags produced by the brand for every single design and the headquarters keeps track of every single piece sold anywhere in the world," said Sangeeta Assomull, CEO of Marigold Group, which runs the brand in India.

She suspects that such sites are either selling fakes or second-hand products."How can they offer such huge discounts? It could even be a case of some kind of financial fraud," Assomull said.

Speaking in the defence of his"legitimate business model", Nakul Bajaj, CEO of Darveys. com, says he was able to offer products from close to 60 high-end brands on his website by creating an international marketplace.

“We have tied up with close to 300 sellers outside India who are able to supply to our consumers genuine products at a price lower by 20-50% compared to what the brands sell at the retail stores in India."

He does not have any direct tie-ups with any of the brands. In the past three months, his site has done about 600 transactions, with each purchase averaging about Rs 25,000."We have 1,000 registered users who have paid Rs 1,000 for registration," he adds.

Experts point out that India is not an exception to the emergence of alternative channels."It happens across the world. In India, because the import duties are very high, people who do not go by the rules are often at an advantage," says Yashovardhan Saboo, chief executive of Ethos, a retailer of high-end watches in India.

The luxury fashion houses and their Indian partners find it hurtful as they invest a lot in marketing and branding, while the alternative channels grow on rising consumer demand.

Darshan Mehta, CEO of Reliance Brands, says whenever the company notices or comes across any other business activity, both online and offline, it ensures it is stopped with immediate effect. c