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There's No Stopping India's Online Fashion Boom The phenomenal growth in India’s e-commerce industry is driven by the changing consumer buying behavior and preference. The trend has not only given rise to a plethora of e-commerce startups in recent months, but has also forced a number of offline retailers to move online. Many of them have even launched dedicated online stores in order to adapt to the changing customer preference. While the shift from offline to online has been witnessed across product categories, the growth in online fashion has been remarkable in recent times. In the fashion retail industry, the transition from offline to online however was relatively nascent. While books and consumer appliances were the preferred products bought online, it was in 2013 that Flipkart officially forayed into the online apparel business, with an advertisement tagline – ‘Fashion has a new address.’ It was in the very same year that Amazon too made its debut into fashion and lifestyle with the launch of fashion jewelry and watches. Soon after, other stalwarts of the Indian retail sector also spotted this trend and hence, we see big names like the Aditya Birla Group, Reliance, Arvind Mills, Tata, Vardhaman Group, Raymonds among others, joining the bandwagon. The niche startups include Snapdeal, HomeShop18, Jabong, Voonik, among others also created disruption with their product variety, service delivery and design innovation. Collectively these players started to open up significant opportunities for themselves and for their buyers. Needless to mention then that the online fashion market started gaining traction much to the apprehension of many who thought that Indian shopaholics who love the touch, feel and fits of their favorite piece of garment, may dissuade from buying online garment.
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The companies gradually expanded its portfolio into men’s wear and to include more brands and so shoppers shifted from buying books and smartphones to more of fashion apparel online. Of all the internet retailing sales in 2015, fashion apparel comprised 18% and consumer appliances was at 17%, as per a report by Nomura dated January 16. The branded apparel market in India was set to double to $30 billion by 2021, investment analyst at CLSA, Chirag Shah said in a report dated May 20, 2016. “We expect 20-25% YoY growth in branded apparel segment vs 6% demand growth for apparel sector (as highlighted in the report),” Shah said speaking on current growth trends in the sector. This market is currently estimated to be a $15-17 billion market in India. Shah said this was inclusive of online brands that shoppers could choose from. With ample demand the e-commerce companies are also ramping up on opportunities for shopaholics to indulge with Amazon rolling out its Great Indian Sale and Flipkart that just concluded its Big 10 sale. “Global precedent suggests that local apparel industries undergo J-curve expansion when a country’s GDP per-capita increases to over $2,000, Shah said adding, “the top-three Indian brands have combined sales of less than $1 billion providing a long term opportunity as the economy progresses towards this inflection point (with a current GDP per-capita of about $1,700).” A shift away from ‘low margin electronics’ onto fashion apparel was noticed by analysts Anantha Narayan and Nitin Jain from Credit Suisse in a report dated January 12. “The average commission rate charged by Flipkart and Amazon India is ~15% for apparel, about 11% for other fashion products,” the Credit Suisse analysts said. Also Read: Once fuelled by it, can India's e-commerce boom continue to rely on mobile phones? “Flipkart Fashion which is a part of our Lifestyle umbrella, is one of our ‘high-focus’ categories.
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