Led by a spike in smartphone penetration, improved logistics infrastructure, convenient payment gateways, and evolved online shoppers, the domestic online fashion market is estimated to reach $12-$14 bn by 2020, according to a new report on Wednesday.
While online fashion shoppers will more than double to 130 mn, e-commerce will constitute 11%-12% of the total domestic fashion market, a joint study by the global Boston Consulting Group (BCG) and social media giant Facebook said.
Currently, 55-60 million consumers buy fashion products online.
While the fashion market in India is currently estimated at $70 bn — where online contributes 5% at around $4 bn — $30 bn of this market will be digitally influenced by 2020.
While online fashion shoppers will more than double to 130 mn, e-commerce will constitute 11%-12% of the total domestic fashion market, a joint study by BCG and Facebook said
“Fashion is at the forefront on Facebook in India. It dominates the top 10 interest categories on Facebook and same is true for Instagram,” Umang Bedi, managing director, India and South Asia Facebook, told IANS.
Bedi added that one out of every two Instagram users in India is interested in fashion.
Asked if Facebook is planning to enter the e-commerce industry by opening up related ads on its platform, Bedi said Facebook drives value to top brands and advertisers in the market by connecting them with people.
“We are partners to those companies. Thus, we do not intend to compete with our partners,” Bedi said, adding that Facebook was all about connecting and helping people share content.
“The spurt in new fashion shoppers will bring with it a fundamental shift in the profile of online fashion shoppers. The 2020 shopper will no longer be the typical young, metro-residing male of today,” said Rohit Ramesh, partner and managing director, BCG.
By 2020, nearly half the shopper base will be women, more than 50% will come from lower tiers (Tier 2 or even lower) and 37% will be older than 35 years of age,” Ramesh added.
This shift in the online shopper profile will require e-tailers to rethink their offers across several dimensions, including assortment, pricing and discounts, delivery options and return policies.
This shift in the online shopper profile will require e-tailers to rethink their offers across several dimensions, including assortment, pricing and discounts, delivery options and return policies
“By 2020, 33% of all urban fashion consumers will buy online, which means for a mobile-first country like India, we will witness a high number of purchases taking place on the mobile,” added Bedi.
“Mobile has become central not just to the way brands market and sell, but also how they design products, plan merchandising and engage with customers end-to-end,” Bedi said.
A key finding of the report is around the interplay of online and offline channels in consumer paths to purchase.
The online shoppers are using a number of channels to discover, research and purchase apparel.
As of today, only 10-15% of ad spends are on digital media despite the magnitude of digital influence on fashion spend.
“Variety, availability and having the right fit and having the ability to return — those are the things which are becoming increasingly important to consumers in the fashion segment,” Abheek Singhi, senior partner and director (Mumbai office) at BCG, told IANS.
Singhi added that profile of online shoppers is changing as it its focus on youth is widening.
The report called for a need for shift in media spending towards digital where further scope exists for brands and retailers.
