‘Stopped buying from Hermes, Louis Vuitton': Zerodha's Nikhil Kamath’s problem with ultra-luxury brands

Zerodha co-founder Nikhil Kamath said that he has stopped buying products from ultra-luxury brands – and their unusual strategy has a lot to do with it. Kamath said that ultra-luxury product companies will 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. 

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?’ with guests Kishore Biyani, founder of Future Group, Raj Shamani, content creator and podcaster, and Ananth Narayanan, founder of Mensa Brands and former CEO of Myntra. 

“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,” he said. 

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Kamath 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.”

Biyani, who was one of the guests, said that Big Bazaar was built on three things – fear, greed and altruism. Greed is that the products are available at lower prices, fear is that it won’t be available after a while, and all the brands are built on appealing to your ego and vanity, he said.

Differentiating Big Bazaar from a luxury brand like Hermes, Biyani said that they were going after greed and fear and the ultra-luxury brands were going after ego and vanity. 

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The latest episode of the podcast, 3.5-hour long, looks at what goes on to scaling a fashion, beauty or a home brand from 0 to Rs 20 crore, and then to Rs 100 crore and beyond. The guests spoke about all the important aspects of scaling a brand including brand names, logos, community building, SEO, marketplace strategies and more. 

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