NEW DELHI, India — When British brand Miss Selfridge launched in India with fashion e-tailer Jabong at Lakmé Fashion Week in Mumbai last fall, it represented another example of the evolving strategy of global brands as they seek to tap into the nation’s 300 million members of the middle class.
“It’s the first time we’ve launched in a new country with e-commerce in this way,” Yasmin Yusuf, creative director of Miss Selfridge, said. “This tie-in with a major fashion week makes it an ideal way to get notice to the brand, showcase the variety that we have, as well as reach the largest number of customers.”
Jabong, which is estimated to be the second most-visited e-commerce site in India after Flipkart and Myntra merged earlier this year, is on a roll with the same strategy.
Having launched Dorothy Perkins in March, a sister brand to Miss Selfridge, and rival British brand River Island (both at Lakmé Fashion Weeks, of which it is a sponsor) Jabong is playing the global card in two ways — with a design team set up in London to create private-label collections on the one hand, and bringing more global brands into the Indian market on the other.
Arun Chandra Mohan, founder and chief executive officer of Jabong, summed up the regulatory-restricted Indian retail scene this way: “It’s easy for you to go out and buy a shampoo; it’s a little more difficult to buy a mobile phone; more so to get a nice dress, and it is most difficult to get a nice handbag to work with that dress.
“The retail landscape of physical stores in India, the infrastructure is very difficult. Here e-commerce can play an incredible role, unlike the U.S., where there is already a very well-developed retail infrastructure, and e-commerce plays a supporting role. In India it can play a vastly bigger role,” he said.
Yusuf, talking about how she anticipates Miss Selfridge’s expansion in India, said that although there is no long-term contract with Jabong, she views it as a long-term commitment.
“It’s a different rationale than what we would have had 10 years ago. I like the idea of launching online because it’s so instant. I come to India twice a year for a long time and have seen the Indian girl/woman change. Now, she’s obviously got her traditional wear — which she will never give up, it is beautiful — but has added on the Western dress and is getting used to that,” she said.
Yusuf estimated that down the road, the brand would have physical stores in the bigger cities while half its business in India would come from e-commerce.
India’s fashion e-commerce market is now in a state of frenzied, highly competitive growth. As Jabong unveiled a new plan last month to make deliveries at coffee shops or gas stations so customers could pick up their orders there, Mohan says the market for fashion is growing across the country.
“We offer about 150,000 products and more than 1,500 styles and last month [July] we did approximately $35 million in sales. There is a significant growth in the market,” he said. “Every day I look at the issue of how I can offer more interesting, exciting products to the Indian consumer, and that’s where brands like River Island and Miss Selfridge fit in. We launched Mango two weeks ago. The Indian market today is demanding that good-quality, trendy fashion that is out there. They see it in print, in the media and they want to buy it.”
Global brands that already sell in the Indian market via brick-and-mortar stores are looking at expanding into e-commerce as well.
“Brands like Jack and Jones, Vero Moda, Nike, Adidas, Puma, Benetton, all of them — they’re all looking very strategically at platforms like ours to provide that reach across India which is the single biggest problem,” said Mohan. “If you speak to any brand or designer here they say, ‘Everything is fine, but I’m not able to scale my business, because I can only get so many people into my store in Bombay.’”
India’s e-commerce market had sales of about $13 billion in 2013, but is expected to grow to $50 billion to $70 billion by 2020. Fashion retail itself is estimated to have a strong showing by 2017, to an estimated $6 billion, according to industry analysts.
Myntra, the company at the forefront of the fashion e-tail race, is also looking at launching more global labels, and foresees substantial growth following an additional $100 million investment revealed in July. It was acquired by e-tailer Flipkart in May, when it was valued at about $370 million. Flipkart itself was valued at $1 billion in March, a year ahead of the company’s target date of 2015.
Myntra has reportedly signed Spanish brand Desigual and, like Jabong, has a strong fashion-week partnership that began last March.
Its association with Wills Lifestyle India Fashion Week held in New Delhi in collaboration with the Fashion Design Council of India and the planned launch of several global brands in coming months are expected to generate even more competition in the fashion e-tail sector, according to analysts.
Using the same global designer-Indian launch strategy is e-tailer Koovs, which is modeled along the lines of the U.K.’s Asos. Koovs launched British designer Henry Holland, known for his quirky, spirited and bold motifs, in May in India. Holland told WWD that seeing the passion for color in India, he adapted his existing aesthetic to suit the market. “We wanted to bring in signature elements from House of Holland, so we went back to our archive and reinterpreted some of the prints: the polka dots, palms, shapes, acidic color palettes. We also worked on the silhouettes, the shapes and fabrics that would work for the Indian market and made it a more affordable price for the Indian customer,” he said.
Koovs is the first fashion Web site in India to have raised money with a public offering last March, on the AIM exchange in London, where it raised $37 million. Robert Bready, the company’s creative and retail director, who was earlier with Asos, believes the Indian fashion market is “in the process of great change.
“We spent three months working with [consulting firm] Technopak in October-November last year to do an investigation into India’s middle class e-commerce and fashion market. Our findings were very clear: The top 10 cities [combined] have a bigger population than the U.K. In the 18-to-30 category, there are more than a 150 million target population. There are 60 million smartphones at the moment out of 350 million phones being used in India,” he said.
Bready added that the consumer profile of a “growing urban customer with the average age around 26, secondary educated, getting married later, more Westernized in their approach and connectivity getting better all the time” were further proof that the desire for Western clothes is expanding. “A virtual space is much easier to develop given the high price of retail space in India,” he said.
Analysts believe that the trend toward global launches in India via e-commerce will only continue to increase as smartphone penetration rises and shopping becomes easier. The e-commerce market is estimated to be only 1 percent of the total retail market in India with about 12 percent of the population making online transactions currently.
Jabong’s Mohan summed it up by saying, “The market is hard to predict; it’s all new. But we know that it is very dynamic.”