If there’s no room in your garage for a new Mercedes or BMW, how about a Mercedes fitness bike or a bottle of perfume?
Luxury auto companies are looking at a boom in their branded merchandise lines — everything from t-shirts, caps, scale models, fitness bikes, bluetooth headphones, mobile coffee machines have flown off the virtual shelves in the last 18 months, with growth rates between 12 and 15%.
“Earlier merchandise was bought by customers for self-consumption, now it’s more for gifting purposes,” says Santosh Iyer, Vice President Sales & Marketing, Mercedes-Benz India. He says that some of its most popular items are bluetooth headphones, fitness bikes and scale models. Mercedes started online merchandise sales in March 2020 and it already accounts for 20% of overall sales. The perfume range, launched in July 2021, is already in short supply, says Iyer.
BMW’s cruise bikes are proving a hit with the cycling fans amongst potential customers, though the most popular items are miniature models and clothing (including t-shirts, caps and jackets), a BMW spokesperson said. And for Audi, customers are buying espresso mobile coffee makers, as well as clothing and scale models.
Merchandise offers an entry point to a high-end brand for a first time buyer, but experts say it also increases customer affinity towards the brand. And it’s proving to be a profitable channel for companies dealing with pandemic slumps in other areas.
Sales have picked up via online channels, with Mercedes and BMW licensing Amazon and Ducati partnering with Flipkart to retail their merchandise. But like other popular luxury brands, the carmakers companies too are having to battle a stream of counterfeits.
Bipul Chandra, India head, Ducati says, “Customers initially joyous at getting merchandise cheaply, start complaining of colour fading and faster wear and tear.” He adds that the brand sells its merchandise only through nine authorised channel partners across India. However, Ducati-branded sneakers are available on Amazon for prices in the Rs 889-1221 range, but the originals sell for Rs 15,000 a pair.
This is a problem that Amazon, which strictly prohibits the sale of counterfeit products by its sellers on its marketplace, is working on. “In order to protect both customers and sellers, we have selling policies that all sellers agree to and we take swift action against those that violate them, including suspending or removing selling privileges,” says the company spokesperson.
Flipkart has similar policies. “Our Strong Seller Onboarding process validates the legitimacy of the business and our Product & Brand Gating process validates the authenticity or proof of purchase of the brands/products/trademarks the seller is trying to list on our platform before the product goes live,” a spokesperson explained.