A new research says that the online fashion and lifestyle industry in India is slated to grow at a 25 per cent compound annual growth rate (CAGR) to US $ 35 billion by 2028. Currently it is worth US $ 11 billion.
A joint report by consultancy Bain & Company and Aditya Birla Group-owned house of brands firm TMRW says that the traditional brands that have largely operated offline have seen their online businesses grow 34 per cent between 2019 and 2023 to US $2.5 billion.
While new-age online-first brands have seen their online businesses expand 33 per cent since 2019 to US $ 2.4 billion; they are projected to grow at an annual rate of around 35 per cent to hit US $ 10 billion by FY ’28.
The report analysed over 700 digital brands and over 1,000 consumers in the online space. Of the brands analysed, less than 10 per cent have scaled up beyond Rs. 50 crore. However, the number of brands exceeding Rs. 250 crore in revenue is projected to jump five times by FY ’28, led by categories such as expressivewear, ethnicwear, and jewellery.
It also says that between January 2018 and May 2023, online apparel firms, raised US $ 430 million, and jewellery and accessories companies garnered US $ 150 million.
Radhika Sridharan, partner, consumer products, retail, strategy and digital practices, Bain & Company said, “Digital fashion brands have also started to focus on the specific needs that customers have. These brands can over-index on that to build stickiness in customers, and they’re already seeing traction. This approach is pretty different from what traditional brands would have done in the same space.”
Prashanth Aluru, chief executive and co-founder of TMRW said, “The number of breakout brands in fashion has not been that many, and it is not just that capital is a constraint, sometimes capability is a constraint too. This is one of the most complex categories, from the front end demand sensing to the back end supply chain, from design to sourcing to product innovation. So getting everything right is where the complexity kicks in.”
