India's huge consumer base is certainly part of the attraction as well as the fact that these consumers are highly net-savvy individuals who are used to browsing and purchasing online. Among the popular online buying categories are (in this order) fashion apparel, handbags, beauty products, accessories, health foods and watches according to business consultanting firm RNCOS.
India's e-commerce growth is fuelled by small towns
The massive growth of e-commerce in India, which is fuelled by the small towns, is tempting many an international brand with an online-first launch, hoping for an easier entry into the country than with a traditional store. A tie-up with established online portals like Flipkart, Jabong and Myntra makes it even easier for foreign brands as they can take advantage of the online retailers' customer base and their knowledge of the customers and territory.
"E-commerce is creating a lucrative market for brands looking for ways to increase customer engagement," confirmed Michael Adnani, the VP of retail and head of brand alliances at Flipkart. "The market intelligence we provide helps them position and launch their products far more effectively. And that too at a fraction of the cost they would incur on conventional retail," he added.
Reaching consumers in the metros and tier II and III cities is one priority of brands and retailers in India but in view of a growing middle and upper class across the country, reaching fashion conscious and luxury customers regardless of where they live is becoming increasingly important. Thus, e-commerce spaces are viable alternatives because they do not incur heavy costs and their reach is far, becoming attractive even for brands with established brick and mortar stores in the country like Mango and Aldo.
"Through the e-commerce platform, we want to make our brand accessible to a larger audience," confirmed Josie Roscop, marketing director of River Island. The brand just opted for an online-first entry into India through a tie-up with Jabong.com.
For the Indian e-tailers, the arrangement works too as they can woo Indian consumers eager to shop for international brands. Thus, Flipkart and Myntra only recently tied up with e-commerce consultancy firm Ace Turtle to launch a host of global fashion brands like Guess, Desigual and Scotch & Soda.
Indian online portal Fashionandyou.com has even launched a Luxury Lounge where it will offer brands like Tory Burch, Versace, Aston Martin and Coach to attract luxury consumers who do not have access to the brick-and-mortar stores of their favorite brands or prefer the convenience of shopping online. "We cater to those brands that are not in India and have no plans to enter India for the next few years," said Fashionandyou CEO Ashish Mediratta.
Coming back to why online-first is becoming such an attractive option for international brands, real estate is part of the answer too. Premium spaces in shopping malls and high streets are scare and available prime properties quite hard to get and costly to rent. "Real estate is expensive and the number of malls available is very limited. E-commerce can provide the right environmen and pan-Indian reach," stated Arun Chandra Mohan, CEO and co-founder of Jabong.Photos: River Island at Jabong / Emporio Armani at Fashionandyou