While others bank on labels Shopclues expects non-branded fashion success

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All the big names in ecommerce are chasing after private brands to meet profitability goals. Fashion etailer Koovs claims that it owes 40% of its sales to private labels. The biggest fashion retailer in the country Myntra has been introducing exclusive labels too for the sake of profits.

Shopclues, an underdog in the online retail race believes in just the opposite. It feels focus on non-branded fashion can get it the results it desires. The Clues Network Inc. run company would like to ride the online fashion growth curve and it believes that non-branded apparel and accessories will help with this.

Online fashion potential

Radhika Aggawal mentions, “Currently, India’s apparel and lifestyle market is a $92-billion industry. However, according to recent reports, only 2% of that is currently online. This is the fastest-growing category and reaches 24% of online consumers in India.”

The online fashion market has not seen its full potential just yet. A study based on this industry states that fashion will dominate online retail by 2020, as women online shoppers increase. This means online fashion has higher margins compared to other product categories.

Shopclues building a fierce fashion category

Shopclues’ co-founder and chief business officer Aggarwal says the company launched a dedicated television marketing campaign for its fashion category. Through this Rs.5-6 crore campaign, it expects to double sales in 10 months.

And, unlike the rest, the ecommerce platform is counting on unbranded goods, in women’s ethnic wear especially, to multiply sales.

“We have exponentially scaled up our offerings in this category including clothing, jewellery, fashion accessories and footwear,” Aggarwal says, while also adding that company wants to focus on growing tier-III and IV markets.

This is mainly because around half of its orders come from these markets. These include Tiruvallur, Vellore, Chittoor, Ernakulam, Tiruchirapalli and Madurai in South India and Bardhaman, Aizawl and Agartala in the east.

When it comes to supply, the platform also mainly comprises of smaller merchants selling unbranded clothing and accessories. 80% of its sellers are mainly small and medium enterprises. Shopclues tied up with Flo (FICCI Ladies Organisation) to encourage women entrepreneurs on its platform and ramped up its ‘Make in India’ activities to harness potential of local entrepreneurs.

Shopclues earning from Fashion

Aggarwal says the company –

  • Ships 1.2 million fashion products a month
  • Obtains 50% of its annual GMV from its fashion category
  • Receives 65% net revenue from fashion
  • Derives margins worth 20-30% from this segment and returns of approximately the same percentage

By 2018, Shopclues expects to reach $3 billion in GMV. It currently serves 30,000 pin codes in the whole country. And, it may be aiming to build its fashion category further by grabbing Snapdeal sellers as this online marketplace also focuses on non-branded fashion but is experiencing a lull in sales and business activity. Shopclues plans to overthrow Flipkart from its position in online fashion, IOS reported in August last year. But, before it can achieve this dream, the Indian online marketplace must get past Amazon Fashion, Ajio, Abof, Koovs, Tata Cliq and the rest of the online fashion specialist.

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