India, home to a fast growing e-commerce market, is set to see $30bn of the fashion market digitally influenced by 2020, according to a Boston Consulting Group and Facebook report, Fashion Forward 2020.
Today $7bn to $9bn of the $70bn Indian fashion market is currently digitally influenced, with the numbers to quadruple by 2020. $30bn represents about 70% of the total branded apparel market.
Mobile is also set to rise, as 85% of online fashion buyers prefer mobile over any other device, mirroring other reports about mobile usage in the country.
Fashion is the gateway for online shoppers, with 30% of new shoppers likely to start their online buying with apparel and footwear. Fashion e-commerce already accounts for about 4% of the total fashion market, comparable to sales from brick and mortar outlets (3.15%). Online purchases are set to multiply by about four times to hit $12bn to $14bn by 2020, contributing 11-12% of the Indian fashion market. New shoppers will drive 40% of the growth.
The spurt of new fashion shoppers will bring with it a fundamental shift in the profile of online fashion shoppers. The 2020 shopper will no longer be the typical young, metro-residing male of today – by 2020, nearly half the shopper base will be women, more than 50% will come from lower tiers (Tier 2 or even lower) and ~37% will be older than 35 years of age, according to Rohit Ramesh, partner and managing director, The Boston Consulting Group, India.
Tier 2 refers to cities in India that have a population between 50,000 to 99,999.
Discounts may drive the online shoppers of today, but the new online shoppers will look beyond that according to the report. Women and lower tier shoppers are driven by variety while older shoppers skew towards convenience.
“This report clearly lays out the pivotal role of digital in the fashion industry, this trend is not limited to urban metros alone but is spreading across geographic and demographic segments. By 2020, 33% of all urban fashion consumers will buy online which means for a mobile first country like India we will witness a high number of purchases taking place on the mobile,” said Umang Bedi, managing director, Facebook India & South Asia.
“Mobile has become central not just to the way brands market and sell, but also how they design products, plan merchandising and engage with customers end-to-end,” he added.
Digital is now emerging as a significant channel for discovery, research and purchase according to the report. Consumers are now increasingly going online, with 24% set to carry out transactions purely online, 25% set to research online and purchase offline, 7% to do vice versa and 44% to stick to purely offline transactions.
The report calls for a shift in media spending to digital in India, as TV has reigned supreme in the sub-continent. Currently only 10% to 15% of ad spends are on digital media in India, despite the digital influence. Fashion players should take note of ‘here & now’ strategies such as leveraging digital to connect with customers across various touch points to optimizing assortment for digital personalisation to win in this digital world.