Ultra-luxury brands "play you," according to Nikhil Kamath.
Zerodha co-founder Nikhil Kamath recently claimed that he no longer purchases ultra-luxury brands due to what he perceives as arrogance in their marketing strategies. 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?'. During the show, he opined that ultra-luxury brands intentionally make the customer build a relationship or get on a list to buy their products, not because they can't make a million of those products but because their "strategy of being arrogant" has served them well.
"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," Nikhil Kamath said.
He further added, "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."
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Kishore Biyani, founder of Future Group who was a guest at the show, then highlighted the difference between his approach with Big Bazar and the ultra-luxury brands. Mr Biyani stated that Big Bazaar was built on three things - fear, greed and altruism. He explained that 'greed' is that the products are available at lower prices and "fear" is that it won't be available after a while. All the brands are built on appealing to your ego and vanity, he said.
Further, differentiating between Big Bazaar and the ultra-luxury brands, Mr Biyani said that they were going after greed and fear and the ultra-luxury brands were going after ego and vanity.
The podcast episode lasted nearly 3.5 hours. It delved into what goes on to scaling fashion beauty or a home brand from Rs 0 to Rs 100 crore and beyond. Guests spoke on topics such as brand names, logos, community building, SEO, and marketplace strategies.