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Kunal Kapoor, founder of Dubai-based online platform The Luxury Closet, hopes to beat the growing competition in the region’s e-commerce sector by serving the high-end luxury segment.
Kapoor revealed that the company closed another round of financing worth $8.7 million earlier this week, with an average order value of more than $700.
Also read: Dubai-based online marketplace The Luxury Closet secures $8.7 million in funding
“We see this as a competitive advantage that will allow us to build a unique business and become a focal point for luxury buyers and sellers around the world. Dubai is a
Amazing city to start a luxury company and we want to expand further beyond the region. Over 20% of our sales come from the US, which shows the global nature of the buyer base,” he said.
Founded in 2012, Luxury Closet focuses on pre-owned luxury goods, with more than 60% of sales coming from brands that don’t discount items like Louis Vuitton, Chanel and Rolex.
While the region’s luxury market is booming — analysts predict the MENA luxury market will be worth more than $12 billion by 2021 — the pre-owned vertical is accelerating.
Estimates suggest the size of the second-hand vertical market in the region could exceed $900 million, Kapoor said.
“In developed markets, one in ten luxury purchases is second-hand, while if we look at watches alone, one in five purchases. In the Middle East, we have a lot of room to grow because we are underserved,” he said explain.
“The concept of pre-owned luxury has only recently become known in the region and is slowly gaining traction. Consumers are starting to see the many benefits of buying pre-owned luxury, both financial and sustainable.
“It’s also a place to find limited-edition products that are on the waiting list when they launch,” he adds.
Some of the limited-edition items currently listed on the site include a Bottega Veneta multicolor leather tote for $2,781, a Montblanc Great Characters Alfred Hitchcock ballpoint pen for $2,463 and a Bvlgari Black Carbongold Abu Dhabi men’s watch for $2,455.
Going forward, the site hopes to focus on adding several new retailers and a new customer experience center to the platform, Kapoor said.
The funds it has just received will also be used to expand its storage facilities, he added.
“The MENA region is experiencing an exciting uptick in entrepreneurial activity and funding. Our lead investor, MEVP, announced a $250 million fund this year that will be one of the largest in the region,” he said.
The company is also considering developing regional or/and international partnerships.
“Retail partnerships like Amazon/Souq and Noon/Ebay are win-win because in this case they happen between non-competing businesses in different regions. Luxury Closet is actively engaging with local or international retailers develop these kinds of partnerships,” Kapoor added.
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