- 1 INTRODUCTION
- 2 RETAIL MARKET IN INDIA
- 3 E – TAIL IN INDIA
- 4 CONTRIBUTION OF FASHION IN E-TAILING
- 5 KEY – GROWTH DRIVERS OF E – TAIL IN INDIA
- 6 KEY CONCERNS AND CHALLENGES
- 7 FASTEST GROWING FASHION START-UPS
- 8 CONCLUSION
E-retailing is an exemplary concept in the present and future of textile and apparel industry. It is playing a major role in the present scenario of textile and apparel industry. It is also very significant that the future of textile and apparel industry is complete only with E-retailing.
Diverse e-retailing applications are being implemented in the textile and apparel supply chain. Information and communication technologies (ICTs) have the capacity to make extravagant amounts of information available to users located in various parts of the world. ICTs also facilitate rapid communication between them. One application of these technologies is in the development of e-retailing to support electronic trading.
Internet Retailing or e-retailing as is usually referred to as covers retailing using a variety of different technologies or media. It may broadly be a combination of two elements.
- Combining new technologies with elements of traditional stores and direct mail models
- Using new technologies to replace elements of the store or direct mail retail. Internet retail also has some elements in common with direct mail retailing. For eg, email messages can replace mail messages and the telephone, that are used in the direct mail model as means of providing information, communication, and transactions while online catalogs can replace printed catalogs. As with direct mail businesses, critical success factors include:
- Use of customer databases
- Easy ordering
- Quick Delivery Operational elements that the Internet retail model shares with both the retail store and direct mail models include:
- Billing of customers
- Relationships with suppliers There are, therefore, many elements that Internet retail and more traditional retail models have in common. Indeed many of the most successful Internet retailers have been those that have been able to successfully transfer critical elements from traditional retailing to the Internet, such as customer service and product displays.
RETAIL MARKET IN INDIA
The Indian retail market is expected to grow at CAGR of 13 percent to reach USD 1080 billion in 2020 with the current market size of USD 585 billion. The share of apparel in Indian market is 8 percent. Organized apparel retail contributes to 21 percent of the total apparel retail while organized lifestyle contribution in total lifestyle retail varies from 32 percent in footwear to 49 percent in watches.
The Indian fashion retail market has witnessed several significant changes in recent years, which indicates country’s evolving fashion retail market. One of the significant changes is advancing online retail or e-tail of fashion products across the country. The current online retail accounts to about 1.2 percent of the total retail market.
E – TAIL IN INDIA
The World over, e-tailing took off around 2007 driven by advancements in the quality of internet access, payments, and computing on mobility platforms that dramatically changed consumer behavior towards internet consumption. This ecosystem creation has altered the consumer behavior of a sizeable consumer mass (referred to as active internet user base). This active internet user base is a key consumer of online retail. The online retail growth has followed a disruptive trajectory across markets. In relatively mature markets, like the USA where organized retail penetration is high, multi-channel retail chains lead the online market. In a relatively newer market like India (with 10 percent organized retail) and China (with 20 percent organized retail) web-only players are dominating the market, given the low organized retail penetration. The e-tailing opportunity in India is expected to unfold as per the two scenarios in 2020: e-tail at 4 percent of retail (USD 43 billion) or e-tail at 6 percent of retail (USD 65 Billion).
CONTRIBUTION OF FASHION IN E-TAILING
The e-tailing evolution started in India with books and media as a key category. Electronics got adopted next and apparel, lifestyle gained acceptance at the next level. The other categories that have found traction include baby care, home, and living, etc. Etailing market at present is led by electronics category with a share of 45 percent followed by apparel and lifestyle that contributes 30 percent of the market with the rest being captured by others. The category split of e-tail is projected to remain same in 2020 with electronics contributing to 44 percent of the total e-tail market in India followed by apparel and lifestyle at 30 percent. Currently, menswear dominates the fashion and lifestyle space with the contribution of 52-54 percent followed by women contributing to approximately 38-42 percent and contribution of kids ranges from 5-10 percent. However, in light of increasing women in the workforce with more financial independence, the share of women in e-tail is expected to increase to 45-48 percent, whereas men’s segment is expected to contribute 45-47 percent, with kid’s section remaining constant around 5-10 percent.
KEY – GROWTH DRIVERS OF E – TAIL IN INDIA
India online retail will grow from 1.2 percent of the total retail market in 2015 to 4 percent— 6 percent of total retail by 2020. This will be driven by a number of factors that can be classified into four broad categories: the growth of digital penetration, limitation of brick and mortar formats, the growth of internet habitual customers and improved supply side.
1. Digital Penetration:
As physical and digital retail space converges, the shopping experience finds more places. Digital retail has reached critical costs where interactive displays and mobile connected stores are now able to actualize at much lower cost. Smartphones and internet penetration are boosting the online retail industry. The internet penetration in 2015 is estimated to be 25 percent and is expected to reach 43 percent by 2020. This shall lead to increased penetration of fashion e-tailing.
2. The growth of Internet Habitual Customers:
Internet habitual customers are rapidly growing in India. An Internet habitual consumer is a consumer who is adept and comfortable conducting complex tasks on the internet. With growing niche of internet habitual customers, e-tailing shall grow at a faster pace. Online portals for social e-commerce for fashion enthusiasts are an added advantage to these internet habitual fashion customers that let users post pictures of their outfits, which are then surfaced and showcased to others, who are also given details of where they can go to buy them — both online and at offline outlets near them.
3. Limitation of Brick & Mortar Formats:
Organized retail (primarily Brick & Mortar) has been in India for two decades now, it’s contribution to total retail is still low (~10 percent in 2015) due to structural issues faced by brick & mortar retail. Organized retail (brick and mortar) is concentrated in top 25-30 cities (where retail consumption is concentrated). The majority of the brick & mortar brands are concentrated in larger cities and are unable to meet the rising aspirations in smaller cities across India. This skew in retail presence is fuelling the growing demand through online channel owing to wide reach and delivery to even smaller cities and towns where brick and retail stores are either not viable or will take years to reach. Owing to fast penetration of the e-tail, many brick and mortar fashion retail brands have started entering online retail.
4. Improved Supply side:
The availability of discounts & promotions, cash on delivery, wider product range, better product details, easy returns, faster delivery, option for EMIs and mass media campaigns & events have contributed towards further penetration of e-tail in the fashion industry. Also, 3D trail room concept is developing across fashion e-tailing portals to provide the experience of virtual trials for apparel and lifestyle products.
KEY CONCERNS AND CHALLENGES
Fashion is a fast evolving segment. As customers progress from research to purchase to fulfillment stages, their expectations change fast. E- Commerce companies need to understand these change drivers and adapt their proposition accordingly. Also, there is need a to focus on new brands and products and simultaneously tackle a hypercompetitive pricing environment. Another key challenge is ensuring the quality of the product. There is a higher percentage of Customer Initiated Returns (CIR) in apparel and lifestyle segment in comparison to other segments. This increases the cost of reverse logistics. Higher CIR is the result of dissatisfactory product quality and size. This adds to concern of e-tailers dealing with apparel and lifestyle.
FASTEST GROWING FASHION START-UPS
Fashion startups in India are growing at a super fast rate. These emerging fashion entrepreneurs make for an excellent motivation for the upcoming ones. Following is a list of best Indian fashion startups, that are making name for themselves nationally and internationally.
The fashion-curated social media aims to be the ‘facebook’ for fashion. The social network connects its, community of over 2million, to connect not only with other people within the fashion industry but also much more. The subscribers have the ability to find the brand, shoes, fashion, etc of their liking and where to buy it. It is said to be personalized and also curated according to each individualist’s taste. They are believed to match their shoppers with the right brands. The start-up was co-founded by IIT Delhi alumni – Avinash, Mayank Bhangadia, and Kaushal Shubhank. Thousands of Indian fashion bloggers find this platform to connect with influencers with fashion brands around the country.
The leading fashion online retail is leading with its market of over 2 million products and a good following. The online market works towards women’s fashion. It is known to have a filter that is so organized and categorized to help women find what product they need and match it according to their respective body types and skin tone etc. Bringing a personalized online shopping platform with assistance and style advise, this company can make online shopping easier!. It brings its viewers the right products according to their own preferences. Started by Sujayath Ali and Navaneetha Krishnan, the network is organized systematically according to the needs of each person.
The violet street helps you discover fashion in everything handmade and beautiful. It was founded by Ankur Gupta and Nayan Kumar, they wish to bring together contemporary fashion with a touch of Indian, merging vintage with new and, bringing together design sensibility to cultural vibes. Their contemporary collections not only focus on comfort and wearability but also to bring to it, handlooms, handicrafts and other designs that speak to the Indian heritage and culture. With every product they focus on its material, function and also its craftsmanship, bringing together fashion and heritage they inspire young entrepreneurs to protect the cultural heritage of India.
The uprising fashion start-up is slowly growing to be a notable fashion network, similar to propose, apart from suggesting the latest trends, the subscribers can also find where to buy their favorite designs. Initially started as a place to share fashion photos and statements, it was founded by Arjun Zacharia, Praveen Rajaretnam, Soumen Sarkar, Ankit Sabharwal The team is dedicated to connecting its members to brands that have a similar aesthetic. You can share your style statement, and find trends that match perfectly with your style. Also, viewers can find similar styles to what you portray and find where to buy it also.
The Limeroad combines both networking and styling. Bringing together user-generated looks. The users can put together looks that match their sensibility and aesthetic, with a scrapbook tool that helps people combine and mix and match looks for each occasion along with accessories and other styles. Founded by Suchi Mukherjee, Prashant Malik, and Ankush Mehra, the brand helps people discover and sell their own unique style sets and create a story for each. The company is an uprising and headed to a bigger success in the near future.
The fab alley is more than just a fashion destination, it provides you information on products you love and wish to buy. Apart from suggestions on latest trends it also personally assists on how to wear certain styles. Founded by Shivani Poddar and Tanvi Malik they aim to provide an ultimate location for young girls looking for stylish yet affordable fashion. In just a matter of time they arising in their popularity and network with an offering of a huge brand collection.
The digital advancement is becoming eminent in the fashion retail industry where online businesses are embracing technology and innovation at a pace never evident in the past. With a growth rate of 44 percent online retail is estimated to contribute 4-6 percent of total Indian retail market in 2020. Apparel and lifestyle are estimated to contribute 30 percent of the total online retail market in 2020 same as in 2015. However, category spilled for women apparel and lifestyle is expected to increase from 38-42 percent to 45-48 percent, whereas men’s segment is expected to contribute 45-47% to the category, with kid’s section remaining constant around 5-10 percent. This shift accounts to increase in women entering the workforce, which shall lead to increased demand for different retail categories. With financial independence, more women will have higher discretionary spending power. This can have an impact across multiple categories.