Specialty online fashion retailers, led by Myntra, have regained market share over the past year on the back of an improved brand assortment and easier browsing experience, indicating that they are holding their own against the likes of Flipkart and Amazon India.
Myntra, Voonik, Limeroad and Nykaa are seeing strong demand among online shoppers whereas sales growth in fashion at Amazon and Flipkart has slowed over the past year. Snapdeal, which is facing a cash crunch after struggling to raise fresh funds, has seen a sharp drop in fashion sales over the past year, according to fashion brands and e-commerce executives.
Myntra is on track to exceed its target of Rs5,000 crore in gross merchandise value (GMV) for the year ending 31 March, 80% higher than its GMV in the previous financial year, chief executive Ananth Narayanan said in an interview last month.
Myntra had earlier lost market share to its parent Flipkart as well as Amazon India after it ditched its website and became an app-only platform in May 2015. Starting January 2016, however, the company has been winning back market share and showing rapid sales growth by improving its product selection, including in its private label offering, and designing a better browsing experience. The retailer also got a boost from re-opening its desktop and mobile websites last June. Myntra has now forecast sales growth of 40% at Jabong in the next financial year.
Limeroad, which gets 70% of its business from women customers, said its GMV jumped nearly four times in 2016 from the previous year.
“LimeRoad core emphasis has always been on user engagement. This in large part is driven by exclusive content posted by our community together with our hyper-personalized algos. LimeRoad is the only platform in the fashion e-tailing industry which offers the users services beyond just discounts - the curated looks and stories which assist the user in discovering delightful products at amazing prices,” Limeroad CEO Suchi Mukherjee said in an email via a spokesperson.
The comeback by specialty fashion retailers last year is a reverse of what happened in 2015 when the three largest online marketplaces—Flipkart, Amazon and Snapdeal—saw a surge in demand for apparel, shoes and jewellery primarily by offering deep discounts.
“If you look at the stats around the current active shoppers and users, there might be heartburn for the larger market places in the short-term at least because Myntra is emerging as a brand with a clear identity and is winning customers who are fashion seekers. To me they are emerging as a fashion destination or an aggregator of fashion brands (rather) than a marketplace,” said Sreedhar Prasad, partner, e-commerce and start-ups at KPMG India.
The rise of specialty retailers also throw up questions over whether Flipkart, which owns Myntra and another fashion retailer Jabong, will end up hurting sales at its two units. Flipkart has identified fashion as one of its key growth drivers this year.
Flipkart and Myntra both count Puma and United Colors of Benetton among their five-largest selling brands. Myntra declined to comment.
Flipkart reiterated what its fashion head Rishi Vasudev said in an interview in December. Vasudev said then that Flipkart and Myntra catered to different audiences with “negligible” customer overlap. Flipkart’s focus is to offer the widest range of products and sell to the masses whereas Myntra generates a majority of its sales selling pricier goods to so-called fashion seekers. Myntra’s private label business is another differentiator, contributing up to 30% of its sales. One of Myntra’s private brands, Roadster, is the biggest-selling product on the platform.
Unlike Flipkart, arch-rival Amazon India is focusing on both mass products as well as so-called luxury brands. Amazon has added premium brands such as Aeropostale, M&S, Michael Kors and Emporio Armani to attract fashionistas, apart from offering lower-priced brands.
“In just three years of our launch, we’ve successfully built the largest online fashion store with over 2 million fashion products from over 15,000 brands. The store is among the top three stores on Amazon.in and is one of the fastest growing stores on the platform. We continue to grow aggressively in terms of business and have been growing at over 150% (year-on-year). Amazon Fashion is also a magnet category that contributes about 30% of new Amazon.in customers and has consistently been doing this quarter-on- quarter,” an Amazon India spokesperson said.
“Our focus for 2017 is to build fashion as an important vertical for Snapdeal. We continue to build capabilities around fashion which is affordable but very high quality at the same time. With the recent addition of close to 100 new brands including some prominent national and international names to our fashion portfolio, we are confident that this expansion will bring us closer to our goal of making Snapdeal a one-stop shop for all fashion trends and style needs” Vishal Chadha, senior vice-president, business at Snapdeal said in an emailed statement.
