Emergence of Tech-Savvy Consumers
The rapid proliferation of smartphones and cheap mobile data plans have significantly boosted internet and ecommerce penetration in India over the past few years. According to a recently released report, India is projected to have over 850 million internet users by 2023, second only to China. This emerging class of tech-savvy and brand-conscious consumers is embracing online shopping across categories like never before. They love exploring new shopping experiences sitting in the comfort of their homes rather than visiting crowded markets or malls. Fashion categories like apparel, footwear, and accessories have seen particularly strong growth on ecommerce platforms.
Companies Are Capitalizing on the Opportunity
Leading domestic and global players have taken note of this massive opportunity and are investing aggressively to strengthen their India Fashion Ecommerce. Flipkart and Amazon have ramped up their fashion offerings by onboarding popular brands, launching private labels as well as exclusive partnerships. Flipkart claims fashion currently contributes over 35% to its overall sales. Players like Myntra and Nykaa have focused exclusively on apparel and beauty categories respectively, catering to evolving consumer tastes. US-based names like Walmart, Target are also exploring inorganic routes to build their presence in this high-potential market. Simultaneously, homegrown D2C (direct-to-consumer) brands are leveraging social media and own websites to connect with customers and offer customized experiences.
Personalization is Driving Growth
Consumers today expect a highly personalized experience when shopping for fashion online. They want platforms that understand their unique styles and preferences. Companies are responding to this demand through advanced analytics and AI. Myntra uses its ‘Style Engine’ to provide personalized outfit suggestions and outfit options to users based on their profile and browsing history. Amazon uses deep learning algorithms to serve highly relevant and customized product recommendations to each customer. Snapfit from TrulyMadly leverages body metrics, size charts and customer reviews to suggest perfect fitting garments. Technology is enabling platforms to move beyond generic searches to preempt customer needs through predictive personalization.
Live Commerce Trend Gains Traction
One of the biggest trends emerging in fashion ecommerce is live/interactive shopping. Inspired by platforms like China’s Taobao and Kuaishou, Indian players are experimenting with shoppable live video commerce. Shoppers can browse merchandise in real-time, ask questions to experts/influencers, make purchases—all within the live video interface. Meesho launched live streams for top influencers to promote trending products and collection previews. Nykaa livestreams makeup tutorials and tutorials on new launches. Customers can directly add products to carts from within the stream for an interactive shopping experience mimicking off-line retail. The trend is gaining popularity among Gen Z and shopaholics who enjoy the interactive and exciting experience it provides compared to regular ecommerce.
Massive Investments & Partnerships for Growth
Given the scale of potential, India’s fashion ecommerce space has witnessed heavy funding activity over the past years. Flipkart fashion raised $60 million from Tencent in 2019 and recently secured $1.2 billion investment from Walmart. Myntra raised $50 million last year from its parentFlipkart to focus on omni-channel expansion. Global funds like Tiger Global, Accel Partners, Softbank Vision Fund have also backed several D2C startups like Nykaa, Bewakoof, LimeRoad indicating strong investor interest. Offline retailers too are foraying online – Reliance Retail acquired majority stake in trendy fashion portals Ajio and Snapdeal to combine its physical sourcing strengths with digital capability. Large players are also forming strategic alliances – Myntra has partnered with global fast fashion brands like H&M & Roadster while Amazon has tied up with Aditya Birla Fashion. These partnerships are helping platforms strengthen their assortments as well as gain access to international markets.
Live Streaming & Influencer Commerce Key Trends
Brands and retailers are leveraging the power of video/live commerce and influencer marketing to drive sales through engaging content. Nykaa hosts over 300 beauty-related live streams every month engaging millions of viewers. Bewakoof ropes in top influencers, celebrities for live tutorials, unboxing sessions, DIY projects. Indian consumers, especially millennials, look up to social media stylists and experts as a trusted way to explore new trends and make purchase decisions. Influencers create customized stories around products suiting different audiences and personalities. They also promote upcoming sales or launches to generate hyper awareness. Leveraging this influencer commerce, fashion portals are delivering interactive shopping experiences beyond just information to blend content, commerce, communities. This builds stronger customer affinity translating into higher purchasing in the long run.
Challenges and future outlook
Though growing fast, Indian fashion ecommerce still accounts for only 5-7% of the overall retail fashion pie. Supply chain inefficiencies, returns and cancellations continue to impact the economics for online retailers. Other challenges include GST complications, underdeveloped infrastructure in areas outside top 30 cities and also lack of standardization in sizing across manufacturers. However India still offers an enormous untapped potential. As technology and infrastructure improve and new shopping behaviors emerge, fashion ecommerce is expected to attract massive new customer segments in the coming years. Companies are innovating constantly to bridge customer experience gaps focusing on hyper localization, payment options, quick delivery. The Indian fashion ecommerce landscape is expected to undergo unprecedented transformation creating new business models along the way.
*Note:
- Source: CoherentMI, Public sources, Desk research
- We have leveraged AI tools to mine information and compile it