The Evolution And Future Of The Fashion E-Commerce Landscape In India
With the ever-growing popularity of the World Wide Web, the trends of online shopping are also rising remarkably in India. This is appealing more and more retailers to reach out to their consumers online and turning the country into a hotbed for e-commerce.
Indian fashion retail market has also not been out of this loop. In last few years, the advancement of ‘e-tail’ or online retail has caused more than a few significant changes to the fashion marketplace across the country. In fact, the scenario has been evolving continuously towards a promising future for the fashion e-commerce industry.
Evolution of Indian Fashion E-Commerce
The evolution of the online fashion retail sector in India is enough to disclose how the industry has developed as a ‘sunrise sector’ for investors. Let’s have a look at it:
- It all started back in 1999, when only a couple of names, such as Indiatimes Shopping and Rediff Shopping were associated with the industry.
- After 6 long years, eBay joined the industry.
- The change in the game began in the year 2007 with the emergence of a number of brands like Flipkart, Myntra, Infibeam, Inkfruit, Futurebazar, etc.
- During next 5 years, the market got flooded with plenty of big, medium, and small e-tail brands including Fashionbuzzer, Shoppers Stop, GoVasool, Yebhi, Grabmore, Snapdeal, Tradus, Yepme, LimeRoad, FirstCry, Babyoye, Fashion and You, CaratLane, ShopClues, HomeShop18, Craftsvilla, Bestylish, Zovi, EDabba, Jabong, Fashionara, and Koovs.
- In 2013, Amazon entered the market and came out as the game changer.
- The very next year, Indian fashion e-commerce industry totaled a turnover of $3 bn.
- Meanwhile, the e-commerce giant Flipkart acquired Myntra for Rs. 2000 cr. and even last year, Flipkart-owned Myntra took over Jabong.
- 2017 has also seen the rise of several other players including Yepme, Koovs, Craftsvilla, Indianroots, and Voonik.
Apart from the key niche players in the online fashion retail space, such as Flipkart (including both Myntra and Jabong), LimeRoad, Snapdeal, Koovs, Amazon, Fashionbuzzer etc., some other big names have also joined the bandwagon lately. These powerful new entrants in the market are:
- Abof by Aditya Birla Group
- AJIO by Reliance Industries Ltd.
- Tata CLiQ by Tata Group
Purchasing Trends In The Fashion E-Tail Market
From trendy outfits to classic jewllery, the Indian e-tail market provides a wide range of fashion products to meet the taste and needs of all types of shoppers. The study conducted by eTailing India has revealed the purchasing habits of fashionable online shoppers:
- ‘Apparel’ is dominating the Indian fashion e-commerce catalog with 47% of shoppers buying it most often while ‘ethnic wear’ makes 42% of the total purchase of clothing.
- ‘Fashion accessories’ are positioned second in the list with 40% of buyers spending in those items frequently and ‘jewellery’ comprises 58% of the total share.
- With 9% of shoppers buying footwear online regularly, the sub-category has found its place at third in the list.
- Almost 4% of total buyers find the e-commerce market reliable enough to carry on their lingerie shopping.
Key Growth Drivers Of Fashion E-Commerce Industry
In last few years, the e-tail business in India has been highly impacted by distinct macroeconomic trends. Consumer buying behaviour, broad product portfolio with customization capabilities, retail-specific policies, greater success of private labels, etc. have also contributed to its growth significantly.
Here are some facts and stats regarding the augmented growth of Indian fashion e-commerce industry:
- Indian retail e-commerce is growing at an incredible rate of 55% with 65 mn monthly unique users. Fashion, being the fastest growing category in it, attracts more than 24% of the total number of users each month.
- Indian fashion e-commerce experience the highest volume of sales in fashion products including branded clothes, footwear, accessories, jewellery, etc. while apparel makes up around 30% of the entire e-tailing business.
- Indian e-tailers have focused their spending on fashion as it comes right after 3 top category of purchase (consumer electronics, books & media, and personal care).
- Though brick and mortar stores of premium brands have very limited penetration in smaller markets, online retailing bridges the gap easily and brings fashion closer to non-urban consumers.
- Availability of robust mobile devices and accessibility of high-speed internet in India have generated a pool of audiences even in tier II and tier III cities, and a huge chunk of them is fashion-loving youth.
- E-tailing gives the convenience of choosing from a broad selection of items, styles, and brands. Buyers get all at one place and can avail their favorite products just by clicking a button.
- Online shopping brings both designer clothes and big international brands under one umbrella.
- Customers can access high-quality fashion products at a variety of price brackets topped with attractive discounts.
Latest E-Tailing Trends In The Indian Fashion Industry
Online fashion retailers in India are leaving no stone unturned to reach out to their potential. Hence, it is of no surprise that the fashion e-commerce industry is seeing the rise of new trends with almost each passing day. Check out the latest e-tailing trends that are making the industry more sustainable:
- Customer demographic for online fashion commerce has changed to a large extent. Branded items or designer wear are no more confined to the metro cities. People in tier II and tier III cities are showing equal interest in those.
- The latest mobile commerce boom has impacted the fashion e-commerce industry drastically. As much as 50% of all online shopping in India takes place through mobile devices while giant fashion e-tailers in the country derive around 60%-70% of their sales through this platform.
- Social commerce has become a big thing with majority of online purchasing decisions made on social media. Almost all e-commerce websites are being integrated with social networks to make shopping a social activity.
- Online fashion retailers are offering the convenience of ‘Virtual Fitting Rooms’ to let customers enjoy a seamless experience for size and fitting.
- Many websites are coming up with interesting features like online stylist, handpicked looks, accessory and footwear recommendations, etc.
- ‘No Question Asked’ return policies are making the process of return smooth, fast, convenient, and hassle-free for buyers.
- Quite a few niche brands have started offering the ‘Try At Home’ facility for apparel, footwear, and jewellery to gain the confidence of customers, thereby increasing sales.
- Fashion rental platforms are emerging as the next big thing where everything – from clothes to accessories – is available on the basis of day to day rent.
Challenges In Indian Fashion E-Commerce
Though fashion e-tailers in India are cashing in on every single opportunity for scaling up their market game, there are challenges at every step. According to industry experts, following are the issues merchants face in Indian fashion e-commerce:
- Keeping up with the ever-changing fashion trends by updating the inventory as well as the catalogue is tough yet crucial
- High rates of purchasing also increases the possibility of product returns, which is a big time pain for e-tailers as the cost of reverse logistics go up
- Super competitive marketplace is forcing businesses to offer lucrative offers, deep discounts, etc., thereby leaving very thin profit margins
- Free shipping and free returns make the situation even worse by taking away the remaining margins
- Huge investment in branding and marketing is essential (especially for a new brand) to establish the presence in the market and stay ahead of the curve
- A large part of Indian population is still not a part of the formal banking economy and many of the rest lack trust in internet banking. Hence, COD (Cash on Delivery) is chosen by lots of buyers, which is not only costlier for merchants but also results in laidback cashflows.
- The cashflow issues often make the maintenance of inventory difficult.
- In spite of a lot of serious efforts of merchants, efficient and on-time delivery remains a challenge.
The Future Of Indian Fashion E-Commerce
According to the popular knowledge platform ‘eTailing India’, the current estimated revenue of Indian e-commerce is $7 bn in which a whopping $2.4 bn is the contribution of online fashion retail market.
With the Chinese e-commerce giant Alibaba entering the Indian market, major online fashion retailers coming up with their private labels, and increasing possibilities of further consolidations or acquisitions, the overall e-commerce revenue is projected to hit $60 bn by the year 2020. And study says that the fashion e-tail market revenue is estimated to touch $20 bn by growing almost four-fold.
Above all, as consumers are gaining more and more confidence in shopping fashion products online, Indian fashion e-commerce is going to witness incredible growth in upcoming days.