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Why Nikhil Kamath Refuses to Buy Luxury Labels Like LV, Hermes

Aspiring home, fashion and beauty entrepreneurs have a new source of help – none other than Zerodha co-founder Nikhil Kamath. Kamath, who has the distinction of being India’s youngest billionaire, has founded the ‘WTF Fund’ to help young people who want to enter these business arenas.

Mr Kamath was speaking at the latest episode of his podcast ‘WTF is with Nikhil Kamath’, titled ‘WTF Goes into Building a Fashion, Beauty, or Home Brand?’ In the podcast, he also talked of why he no longer patronises big fashion labels like
Louis Vuitton and Hermes. Kamath alleged that these ultra-luxury names played on consumers’ minds, using a “strategy of being arrogant”, and coercing clients to enter into a relationship with them or join their mailing list before they can pur-
chase their goods, despite having the bandwidth to mass produce the goods instead of keeping to an exclusive minimum.

“In the last 3-4 years, I have completely stopped buying from ultra-luxury brands like Hermes and Louis Vuitton because I feel they play you. Their entire marketing strategy seems to be to offend and get some kind of a reaction out of you and then buy from them. The most offensive thing is to go to a shop where
they are marking up a product one is to 1,000 times and then say you can’t buy this product until you build a relationship with us or get on a list or all of these hoops that you have to jump through,” Kamath said on his podcast.

“It is not because they can’t manufacture more of that… they can go make a million of these bags and stuff but that strategy of being arrogant has worked so well for them that I think people have to be cognizant of that,” he added.

Kamath has a point. The Hermes bags are much in demand simply because they do not sell it to every customer. There is so much drama involved. You have to be on their list of high-end shoppers who have a history of buying with them, otherwise for the love of money, you can’t get one. Another trick they use is, they tell people who walk into their store to buy a bag, to first spend that much amount on other items in their store, and only them will they get on their list and be eligible to buy a bag!

Crazy, but this strategy has worked for them. People now crave even more for the bags! The podcast discussed various aspects involved in growing a start-up into a business of Rs100 crore or more, including brand names, logos, community building, SEO and market strategies.

Source : DeccanChronicle