International fashion brands enter Indian ecommerce, an opportunity for Indian Online sellers

Many international fashion brands have been eyeing an apt entry into the Indian market. The complex and stringent regulations in India have stopped many retailers from setting up their brick and mortal stores in the Indian cities. The rising costs of real estate, marketing and hiring the right talent involved in setting up a physical store add up to millions; hence they have welcomed the alternate and easier route, online stores or marketplaces.

Avirate, an international high street fashion brand for women designed in UK, launched in India via an e-store in November 2013 to reach out to all the fashion conscious Indian women. An e-store helped them to create an exclusive niche for themselves, which helped in their growth in the Indian market and now they plan to start selling via online marketplaces as well.

While Avirate chose the e-store approach, others like Dorothy Perkins and Miss Selfridges, to be launched in the coming weeks, have chosen the marketplace approach. Dorothy Perkins, UK based fashion label for youth, and Miss Selfridges, another fashion label, have tied up with Jabong to launch their merchandise in India. Jabong will import the products and sell them through a micro-site.

By launching a brand through online marketplaces, the brands have the following advantages:

1. The credibility of the marketplace platform- The marketplace already has its customer base and credibility. The brands can cash in on this popularity and save on initial costs required for creating brand awareness.
2.  Save on initial setup costs and time– Though e-store means lesser costs compared to physical brick and mortar costs, it is still higher than listing products on an online marketplace. Hence, launching via a marketplace further reduces the initial setup costs.
3. Easier strategic planning– Each market has its own dynamics, what works in another part of the world may not work in India. A new entrant into the Indian marketplace can save on the time and cost for strategic planning by tying up with a marketplace.

In addition to avoiding the costs and the complexities, these brands also see it as an opportunity to test the market for acceptance and growth of their brand. The millions saved from the initial set up costs can be put to better use for creating brand awareness and identity in the new market. Also, this model helps them to reach out to all kinds of people as against a physical store where the reach is restricted to that city or locality.

Opportunity for Indian online retailers

Online sellers looking for new products/merchandise can offer their platforms to these international brands. Hitting the bull’s eye is crucial for the new entrants and this is the main factor they would look for while considering tie-up options. The marketplace/seller offering them the least headaches and the maximum reach would be their first choice!