Zerodha’s Nikhil Kamath
Nikhil Kamath, co-founder of Zerodha, a leading Indian stock brokerage firm, recently revealed his decision to abstain from purchasing ultra-luxury brands. He articulated his rationale during an episode of his podcast series ‘WTF is with Nikhil Kamath,’ titled ‘WTF Goes into Building a Fashion, Beauty, or Home Brand?’. Kamath expressed his concerns about what he perceives as arrogance in the marketing strategies of ultra-luxury brands and how they compel customers to engage with them.
Ultra-Luxury Brands’ Marketing Strategy
Kamath pointed out that his shift away from ultra-luxury brands such as Hermes and Louis Vuitton is due to his perception that these brands intentionally employ a strategy of arrogance in their marketing tactics. According to him, these brands make customers jump through various hoops to build a relationship or get on a list to purchase their products. This approach, in Kamath’s view, aims to evoke a reaction from customers and plays on their desire to acquire exclusive products. Despite their ability to manufacture ample quantities of their products, ultra-luxury brands choose to restrict access, capitalizing on the strategy of perceived exclusivity.
Reasons Behind Kamath’s Decision
“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,” remarked Nikhil Kamath.
He further emphasized that the most offensive aspect of this approach is the brands’ practice of marking up their products exorbitantly and then stipulating that customers must build a relationship or navigate through various requirements to make a purchase.
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Comparison with Big Bazaar Approach
During the podcast episode, Kishore Biyani, founder of the Future Group and a guest on the show, differentiated his approach with Big Bazaar, a popular retail chain, from that of ultra-luxury brands. Biyani explained that Big Bazaar’s strategy was built on three fundamental factors: fear, greed, and altruism. “Greed” signified that products were available at lower prices, while “fear” implied that these products might not be available after a certain period. In contrast, Biyani asserted that ultra-luxury brands primarily cater to customers’ ego and vanity.
Divergence in Approaches
Kishore Biyani drew a distinct contrast between Big Bazaar and ultra-luxury brands by underscoring that their strategies targeted different human motivations. He noted that while Big Bazaar appealed to customers’ greed and fear, ultra-luxury brands aimed to satiate ego and vanity.
Podcast Highlights
The podcast episode spanned nearly 3.5 hours. It delved into various aspects of scaling a fashion, beauty, or home brand. That too from the initial stage to a substantial turnover of ₹100 crore and beyond. The guests shared insights on several topics. It included brand names, logos, community building, SEO strategies, and marketplace approaches.
Conclusion
Nikhil Kamath’s decision to discontinue purchasing ultra-luxury brands underscores a shift in consumer perception regarding the marketing tactics employed by these brands. His remarks shed light on how customers are increasingly scrutinizing the strategies of ultra-luxury brands and how these brands may need to adapt to evolving consumer expectations.
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The podcast episode provided valuable insights into the strategies of fashion, beauty, and home brands and the factors that contribute to their success in the market.
