One of the key trends influencing the growth of the online fashion retail market in India is the rise of social commerce. With major players like Facebook, Instagram, YouTube, Pinterest, and Snapchat, the social commerce platforms facilitate transaction-based social interaction and user experiences through their platforms. Social commerce provides a wide range of choices, along with shared user experiences and referrals, eventually impacting the consumers' decision-making. Through social commerce, retail, and e-commerce brands divert traffic to their retail websites, increasing their brand reach, and building customer trust. Hence, the growth of social commerce results in an increase in the number of e-commerce orders.
Online Fashion Retail Market in India - Segmentation Assessment
Technavio has segmented the market based on product (apparel, footwear, and bags and accessories) and end-user (women, men, and kids).
- The market share growth in India by the apparel segment will be significant during the forecast period. The growth can be attributed to factors such as the high demand for apparel that is both fashionable and comfortable. Additionally, retailers also market their products to different consumer segments based on demand, which is further expected to drive market growth.
Online Fashion Retail Market in India – Market Dynamics
Key factor driving market growth
- The rise in internet and smartphone penetration is considered to be a major driving factor for the growth of the online fashion retail market in India.
- According to the data provided by the Telecom Regulatory Authority of India (TRAI) in August 2021, the total number of internet users in India increased from 795.18 million people by the end of December 2020 to 825.30 million by the end of March 2021.
- Many manufacturers in the fashion-related product segment started to sell their products through their own websites in addition to third-party online retailers.
- For instance, Adidas AG, a German multinational corporation, sells its products through its own website, online stores, and third-party online retailers in India.
- Some of the key vendors in the online space, which have introduced mobile applications that are compatible with iOS and Android operating systems include Amazon.com Inc., eBay Inc., A. M. Marketplaces Pvt Ltd. (Limeroad), Walmart Inc. (Flipkart), Tata Group (TATA CLiQ), and Reliance Industries Ltd. (Ajio).
Major challenges hindering the market growth
- The difficulty in retaining the loyalty of online customers is a major challenge impeding market growth during the forecast period.
- The staff members help the buyers pick the right product or engage them in a way that may end in a successful purchase in an offline retail store.
- However, when it comes to e-commerce and online stores, customers have complete control over their buying decisions, which becomes difficult for manufacturers and e-commerce vendors to engage customers.
- Additionally, if the webpage or mobile application is not appealing or interactive enough for the users, manufacturers lose potential or existing customers to their competitors. Hence, such factors are expected to impact the market growth negatively during the forecast period.