The Indian retail market was estimated at Rs 46,15,000 crore in 2017 and is expected to reach Rs 1,08,58,000 crore by 2027, growing at a Compound Annual Growth Rate (CAGR) of 9 percent, according to the Indian Fashion Report 2018. Within this, it is estimated that the current fashion retail market is worth Rs 3,22,209 crore and is expected to grow at a promising CAGR of 7.7 percent to reach Rs 6,74,037 crore by 2027.
Exposure to global fashion trends, the rising disposable incomes of the Indian middle class and the presence of foreign brands has been acting as a catalyst for the growth of the fashion retail market in the country. Meanwhile, the increasing spectrum of Internet reach across geographies of India coupled with corporatisation of apparel sector is paving way for growth of e-commerce sales to new levels. With digitalisation of India, retailers and brands have better access to Tier II and III, cities and rural India through media and Internet exposure. This has resulted in changing fashion trends much faster than anticipated.
Speaking to IMAGES Retail Bureau, Gunjan Soni, Head of Jabong & Chief Marketing Officer at Myntra said, “The four big trends that will become really big this year are – sustainable fashion (specially with edge in ethnic wear), fast fashion with the likes of Vorta technology, luxury which is expected to grow 3X-4X in a couple of years and growing demand for beauty and personal care, home decor along with accessories.”
Each of these trends are already doing great on Myntra and Jabong.
“As far as fast fashion is concerned, we have leap-frogged a lot and we have created brands where we are actually not using designers but using artificial intelligence and machine learning to be able to depict how next wave of fashion is going to be much faster and then work with other manufacturers to bring them to life also much faster. So, within a span from conception to execution and to be available on our platform is only a span of two months. And that is how fast we are taking fast fashion to be,” she added.
Betting Big On Luxury
Then there is luxury, a segment that Jabong is betting big on this Spring. The brand is launching two new online stores soon – a luxury store and a designer store, both of which will concentrate on the premium fashion segment, luxury brands, global brands.
“Jabong is making a lot of waves when it comes to the luxury segment and soon we expect to launch both a luxury store and a designer store in line with the expectations of our consumers. The launch of the stores is in line with our belief that the Indian customer is ready to experience both these segments online. The luxury store will see several innovations because if we are bringing luxury online, we actually want to create an experience that is different,” asserted Soni.
She added, “The luxury store will see several innovations because if Jabong is bringing luxury online, the idea is to actually create an experience that is different.”
Luxury as a category will be available on both the platforms but these stores will be launched exclusively on Jabong. Meanwhile, Myntra will continue to lead as a mass premium platform and will focus on driving the next wave of adaption.
“We have been the leader in the fashion category, we want to make sure that the next wave of adaption in online fashion happens in India on our platforms,” she further stated.
Both Myntra and Jabong today have a combined base of 12 million customers. However, the customer overlap between both the brands today is close to 28 percent.
Despite having overlapping customers, just like Myntra, Jabong has no plans to take offline route and open brick-and-mortar stores.
Reinventing Experiences Using Technology
To enhance the customer experience, Soni said the brand is using technology at every step.
“The key is to personalise experiences using technology over the next two years,” she said, adding, “Personalisation is not really talked about a lot when it comes to supply chain and logistics. We take the technology to help predict consumer behaviour. Fashion is not very a high depth category, so to store products at multiple warehouses we need to plan in advance. We apply forward prediction algorithms that tell us which geography is likely to buy which product on the basis of past trends. Using these algorithms, we pre-stock our merchandise and are hence able to make deliveries with speed.”
“We are also personalising the end experience of the consumer. Last year, we launched ‘Try and Buy’ which is powered by both technology and consumer buying behaviour. For this year, our Concierge Service will be big. For example: can we give you an appointment booking experience, can we vary speed by the type of consumer we are getting to? We will be applying technology in unconventional areas and of course, in traditional areas, we are already using 10X of the technology we will be using in launching newer services.”
Just like last year, Jabong will be launching the second version of its Mood Store, a comprehensive fashion store that allows users to shop an entire look per their mood. Mood Store was created to the Urban TrailBlazer segment – which is the relevant target group segment for Jabong. These are movers and shakers of India, with high affluence and discerning choice in fashion etc. The store is based on deep consumer understanding and analytics around preferences of the Indian fashion customer.
According to Soni, the Mood Store is all about shaping experiences through technology and being able to offer the consumer a selection not led by category. Apart from this, Jabong is credited with launching several technologically backed industry-firsts in Indian fashion e-commerce such as Ramp Walk Video, Online Shoppable Fashion Week and the concept of Online Shop-In-Shop.
Tier II & Beyond: A Storehouse of Opportunities
Tier II and beyond is a very large market already, so across both Myntra and Jabong close to 50 percent of sales now come from beyond Tier I or the top ten cities.
“In particular, we are seeing adoption of the latest trends happening there. Trend of adopting activewear is happening faster in Tier II and beyond than the metros. Similarly, in the luxury segment – which is largely considered only for super affluent and therefore proxy metro consumers – we see that almost 40 percent of our sales (even for higher price points) are actually coming from Tier II and beyond. And within that geography, places like the Northeast are shopping their fair share,” revealed Soni.
Intelligent Marketing & Myntra TV
“Last year we did a personalised campaign for Myntra’s End of Season Sale where we ran 40,000 different creatives for 40,000 different segments. We used the help of a Silicon Valley-based startup to personalise ads / campaigns. We used four basic variables to target consumers – gender, geography, preferred language and whether they had been a consumer in the past. The end result – everyone who accessed the campaign got an individual look. All these campaigns saw 3X higher performance as compared to others that we have done in the past.”
She believes that the future of marketing is also going to change dramatically – a lot more personalised with a higher bar on creativity
Another element which the brand is banking on is content. They are confident content is going to become the big enabler for e-commerce and are in the process of building ‘Myntra TV’, which will host ‘shopable videos’.