Amazon turns up the heat – enters Apparel segment

Adding to the already existing heat of competition in the Indian ecommerce scenario, Amazon announced its entry into the apparel segment, by far one of the most fast growing and higher profit margin product segment. The world’s largest retailer, currently dominating the Indian ecommerce market with the highest number of product categories and product offerings, now sells ethnic and Indo-western wear for women and sunglasses for men, women and children.

Amazon India already had a vast selection of lifestyle products and accessories like fashion jewellery, watches, beauty products, handbags, clutches and shoes. With the addition of apparel and sunglasses, it is clear that it aims to be a not-to-be-missed fashion destination for all at the convenience of having it at their fingertips. The 12,000-odd contemporary and traditional styles from more than 90 brands by private labels as well as national and regional retailers will make it compete directly with rivals.

Apparel and fashion offer higher margins for retailers as compared to other products like books and electronics where its difficult to set higher prices. Hence, everyone wants to have a piece of the pie. While Myntra and Jabong have been top players in the category so far, major players like Flipkart and Snapdeal also have been trying to make headway in the apparel segment.

While Myntra started and still operates as a fashion portal itself, Flipkart introduced the apparel product segment last year in its efforts to expand and offer more to customers. A Flipkart-Myntra deal is on the way which could make it a dominant player in the ecommerce apparel segment.

Amazon’s signature style is lowest prices and unbeatable offers. Keeping to that trend, its entry into apparel will put pressure on rivals to put further discounts on their sites as well. The vast selection combined with trend insights and customized product recommendations, women will now find reasons to shop more at Amazon which also offers fast delivery and convenient return policy.

Opportunity for Indian Online Seller with Amazon’s entry into Apparel

Apparel and fashion products give as high as 40% profit margins to retailers and is one of the most popular product categories in the Indian ecommerce space. If you are a fashion retailer, this is the right chance for you to get onboard as Amazon is known for its quick growth and popularity with customers. With an edge in collection and service, Amazon has more traffic generated by the day, hence the faster growth it has witnessed.

Also, with increased competition, rivals like Flipkart, Myntra, Jabong and Snapdeal will also try to up their game with additional discounts and offers to entice customers. Tie-ups with them also can be beneficial as they would introduce better value-adds to entice retailers into associating with them.