Fashion stores online have always had a rocky road. Even though fashion as a category holds 30% of the total share of Indian ecommerce, increasing number of exclusive fashion companies are closing operations. Currently valued at $2 billion, the fashion industry is expected to hit $20 billion and overtake electronics, which holds 51% of the ecommerce sales.
Jabong has had its share of bad times. The company, which was recently sold to Flipkart – owned Myntra, has been hunting for a seller for a long time. It faced devaluation and came close to a shut down.
‘We are closed’
The list of companies that have closed either temporarily or for good include: Freecultr, Zovi, and Fashionara. Freecultr co-founder Sandeep Singh denies a permanent closure and attributes the inactive website to technical glitches. Singh says,
“We are in a transition and a team is looking into it.”
“At present we are not selling directly via the portal but we are selling through our marketplace partners.”
Fighting for monopoly
Flipkart is keen on becoming market leader in fashion. Towards this, the company acquired fashion portal Myntra in 2014. Now it has taken over Jabong as well. These strategic acquisitions have put 70% of the industry share in Flipkart’s lap.
So what is the problem?
Money is the main pain area for all ecommerce companies. Second and later rounds of funding are becoming scarce. Harish Bahl, CEO of Smile Group, which has stake in FashionandYou.com says,
“New funding rounds have been a challenge for all players in the space and Fashion and You is no exception.”
Having a wider pool of sellers and brands can help diversify the portfolio. Following Shopclues’ lead, companies should also look at how best they can utilise seasons (sales of boots and water-proof cosmetics during monsoon, jackets and shrugs during winter, cotton and open sandals during summer etc) and festivals to aid sales.