Technavio outlines India fashion e-retail market

• Men’s clothing segment is the dominant shareholder in the market
• Key vendors—Amazon, Flipkart, Snapdeal, Jabong, and Yepme

The availability of a wide array of payment options and products, broader reach, and lower costs are encouraging online shopping for consumers in India, says Technavio’s analysts, who predict that the online fashion retail market in India will grow at a CAGR of almost 17% between 2016 and 2020.

Online shopping sites offer customers the opportunity to choose between a number of payment methods such as debit cards, credit cards, cash on delivery (COD), electronic wallets, smart cards, Internet banking, and demand drafts. Favourable demographic factors, better return policies, and increasing adoption of digital and push marketing by vendors are some of the other factors that will contribute to the growth in the online fashion retail market in India during the forecast period.

“The distribution of users between mobile applications and websites is an ongoing trend in the market. Mobile apps have a tremendous impact on the growth of the online fashion retail market in India as they offer a faster alternative to mobile web browsing for consumers to shop on the go. Key players in the market are coming up with more sophisticated fashion apps designed to leverage each functionality on specific operating systems such as Windows, Android, and iOS. Online retailers are emphasising on finding a balance between mobile applications and websites to cater to the masses who prefer shopping online,” says Brijesh Kumar Choubey, Lead Analyst, Consumer & Retail, Technavio Research.

In 2015, men's clothing online accounted for around 53% of the market share to dominate the online fashion retail market. However, more women in the country are likely to be employed and empowered financially in the coming years, thereby boosting growth in the women’s clothing online segment. Furthermore, hectic lifestyles and time crunch are encouraging women to transition towards online shopping rather than visit brick-and-mortar stores. The availability of premium women’s clothing is also projected to increase purchases and add more revenue by 2020.

The key players in the online fashion retail market in India include Amazon, Flipkart, Snapdeal, Jabong, and Yepme. Intense competition prevails in this market with most players selling broadly similar products. However, the global players like Amazon and eBay are offering an impressive range of fashion products, which has posed a tough challenge for regional players like Flipkart and Snapdeal. According to Technavio, the purchase decision of consumers is price-dependent so vendors need to focus on pricing strategies and the provision of innovative services. Most users prefer COD and conduct a price comparison before making a purchase, the research firm added.