eCommerceTrendz Thought Corner
According to eCommerceTrendz estimates,in 2016, India’s etailing market stands at $7 billion and online fashion retail contributes $2.4 billion to it. Whereas, India’s Online Retail Revenue is expected to reach $60 Billion by 2020 and online Fashion Retail Market is expected to touch $20 Billion by 2020.
Evolution of Online Fashion Retail
The Indian fashion retail market has witnessed several significant changes in recent years, which speaks for country’s evolving fashion retail market. One of the most significant changes is advancing online retail or e-tail of fashion products across the country.
The distinct trends in the macroeconomic scenario, favourable demographic dividend, retail specific policies and consumer buying behavior have stimulated a transformation in the online fashion retail market. Direct outcomes from the evolution are the modernization and corporatization of retail business. Along with it, customization of product portfolios to address the specific needs of various consumer segments and greater success of private labels has augmented the fashion retail eCommerce in India.
Noticeable Trends in Online Fashion Retail
- Acceptance and expansion of niche online fashion retailers such as Red Polka, Korra and Koovs amongst many others.
- Multichannel campaign is the desired strategy among online fashion retailers.
- Offline apparel majors such as Tata, Reliance, Arvind Mills, Raymond and Aditya Birla Group going online.
Key Growth Drivers
- More than 30% of the entire eCommerceTrendz business comprises of apparels.
- Increased spending on fashion retail by eTailers as it comes under the top 3 category purchase, others are Consumer electronics, Book & Media (Men) and Personal Care (Women).
- Limited penetration of branded brick and mortar stores among non urban consumers is increasing the demand for online retailing.
- The recent regulatory cap of 25% for sales originating from a single seller will further drive the players to diversify their seller base.
- For current online buyers, product assortment and convenience of ordering and delivery are the top 2 non-discount purchase reasons.
- Timely and efficient delivery of products.
- Consumer wants to have a touch & feel factor before buying product.
Higher percentage of Customer Initiated Returns (CIR) in apparel and lifestyle segment in comparison to other segments. This increases the cost of reverse logistics.
Major Product Categories in Online Fashion Retail
- The online Indian Fashion catalog is dominated by Apparel (47%) followed by Fashion Accessories (40%), Footwear (9%) and Lingerie (4%) in 2016.
- The Apparel catalog is mostly comprised of Ethnic Wear with 42% density.
- The Fashion Accessories sub category is dominated by the presence of 58% Jewellery items across the Indian Fashion catalog.
Top Fashion eTailers
- Flipkart(including Myntra, Jabong), Snapdeal and Amazon are some of the major players in the online fashion retail space.
- With the acquisition of Jabong, Flipkart owned Myntra tops the list and by 2020, they will constitute 65-70% of market share.
- Also, there is a rise amongst niche online fashion players such as Koovs, Voonik , YepMe and Craftsvilla.
- Amazon Fashion is now among the top three categories for the Indian arm of the global e-commerce giant which contributes 30 % of the total customers of Amazon India. So increased fashion spending is on the line for Amazon India.
- Alibaba is actively pursuing entry into India for its B2C marketplace.
- Major eTailers are launching their own private labels.
- Possibility of further consolidations.
Fashion retailers will have to continue reorganizing their business models to cater to the evolving needs of this dynamic market. The opportunity is immense and reinventing of strategies is needed to address rising challenges. After all, fashion never sleeps so neither do eCommerce.