The Sail of Niche Online Fashion Players In eCommerce IndiaHalf a dozen niche online fashion companies continued to pile up losses in the last fiscal year, to as much as five times the revenue for one, as they competed with Amazon and Flipkart by deep discounting wares and with aggressive marketing.

#DigitalErra Thought Corner

Voonik, Zivame, Koovs, Lime-Road, StalkBuyLove and Craftsvilla reported a combined loss of Rs 515 crore for the year through March 2016, compared with Rs 134 the year before. Together, revenue for the six more than doubled to Rs 230 crore in fiscal 2016. The burn comes on

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the back of extensive marketing investments, hiring, enhancing technology capabilities and, in some cases, change in business strategy.

Intense Competition

India’s online fashion market is estimated to be worth more than Rs 1400 crore in terms of gross sales. However, in a highly competitive marketplace, where big discounts are the primary sales drivers for online retailers, many small players are struggling to gain ground. Flipkart, Myntra and Jabong — the group alone captures about 70% of the online market. Experts say Amazon India, Snapdeal and Shopclues unitedly cover roughly another 20%, leaving just about 10% for the rest. The market scenario also directs a valuation game where several companies are involved in raising money and would compromise on losses as a component of investment.

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Finding ways to innovate and simplify are keys to surviving in the hyper-competitive fashion industry. You will also need to develop expertise in a variety of other areas:

1) Costs, Prices and the Consumer

Your ability to launch in your chosen niche market might depend on controlling your design, sourcing and production costs to present your line at the appropriate price point. Launching a line that conveys high value in terms of workmanship, materials and design at a reasonable price might not appeal to the status-conscious consumer. However, it might gain great traction among a larger consumer group. Once you are successfully launched, with several profitable seasons, you can make incursions into other market levels.

2) Technology for Supply Chains

Controlling your supply chain alleviates some of that risk and improves your ability to compete as a niche entrant in the marketplace and technology plays a crucial role in it.

3) Brand Management and Competition

Fashion brands convey many images to their customers, including quality, innovative design, status, utility and value. Identify the brands that compete for your target customers and find an underserved niche. Thanks to ever-changing customer tastes, many fashion brands seem to come out of nowhere to capture major market share in certain niches.

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4) Sustainability and Innovation

Marketing and distribution play an important role in your sustainability, as does your ability to continually produce new and appealing designs. Another component of sustainability is constant innovation in your design process, supply chain, distribution, expansion into other products and consumer involvement. It employs research into consumer needs and buying habits, combined with production methods and cost analysis, to develop innovative products that go beyond merely producing attractive designs.

Conclusion

Fashion retailers will have to continue reorganising their business models to cater to the evolving needs of this dynamic market. The opportunity is immense and reinventing of strategies is needed to address rising challenges.

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