The influx of corporate heavyweights is changing the face of India’s online fashion industry. The competition was intense already with Jabong, Myntra, and Koovs fighting for space along with ecommerce biggies Amazon and Flipkart. With big corporates like Reliance Group, Tata Group, and Aditya Birla Group added to the mix, it has now become a fierce war between established startups and reputed retail brands.
Praveen Sinha, co-founder and former MD of Jabong believes,
“Etail in India is going through an evolution which is very similar to what we have seen in the telecom and the airlines industries. There too, at the start there was heavy discounting, followed by correction and stabilisation besides churn and consolidation.”
New entrants with deep pockets
Reliance’s Ajio, Tata’s Cliq and Birla’s Abof is giving stiff competition to existing fashion etailers. While startups like Jabong are struggling to raise funds, the big companies have ample of money to spare.
The Bangalore-based fashion etailer Fashionara closed down in May, after investors and co-founders left the company.
Crunched for cash, pure online fashion players are finding it hard to survive and match the capabilities of conglomerates.
“A set of new competitors is emerging and start-ups are falling by the wayside,” said Prashant Gupta, CEO of Abof.
Nothing is over until you stop trying
The fashion etail industry is churning and only the fittest will survive. And startups are toiling hard to stay alive and relevant in an industry that’s evolving fast. The niche players are focusing on brand awareness activities, finding investors, reworking business strategy, discounts/offers and distinctive services to gain customer loyalty.
Myntra is counting on big fashion sales, aggressive brand marketing campaigns, exclusive brand tie-ups and try-on-delivery service to become the leader. The company also relaunched its mobile and desktop site to please buyers after drawing flak over app-only transition.
Jabong is trying to overcome hurdles by revamping its business strategy. The fashion etailer recently realigned its positioning by removing low-margin products from its portfolio and focus on premium products instead.
Will the efforts pay-off? Are company consolidations on the card? If yes, then will it be a merger like Flipkart-Myntra (online marketplace and startup) or acquisition like Future group and FabFurnish (big corporate and startup).