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Changing buyer behavior, demand pushing up premium fashion in India

"The fashion and lifestyle sector, estimated at $80 billion in India, is growing at a CAGR of 10 per cent. Online fashion contributes around 7-8 per cent or approximately $6 billion to this entire market. It is further expected to reach $12-$14 billion by 2020 with the overall retail market at $100 billion. The driving forces behind this growth are: changing consumer preferences, brand awareness, increase in disposable income, and a rise in the tech-savvy millennial population. The introduction of international brands in India is leading to the growth of premium apparel and luxury segment which is likely to command 20 per cent share in the overall fashion e-commerce market. This exponential growth rate offers brands an opportunity to reap huge benefits."

 

Changing buyer behavior demand pushing up premium fashion in India 002The fashion and lifestyle sector, estimated at $80 billion in India, is growing at a CAGR of 10 per cent. Online fashion contributes around 7-8 per cent or approximately $6 billion to this entire market. It is further expected to reach $12-$14 billion by 2020 with the overall retail market at $100 billion. The driving forces behind this growth are: changing consumer preferences, brand awareness, increase in disposable income, and a rise in the tech-savvy millennial population.

Global brands leading growth

The introduction of international brands in India is leading to the growth of premium apparel and luxury segment which is likely to command 20 per cent share in the overall fashion e-commerce market. This exponential growth rate offers brands an opportunity to reap huge benefits.

Meanwhile improvement in logistics, infrastructure and convenient payment channels is leading to the growth ofChanging buyer behavior demand pushing up premium fashion in India 001 e-commerce in the country. Availability of numerous options at a single click keeps fashion consumers well-informed and on-trend. However, to carve a niche in India, one needs to focus on the local needs. The country’s youth is influenced by online research on current trends, product quality and company’s production ethic while making their purchases. This leads to growing awareness about the brand and its quality.

Rising purchasing power is luring brands to foray in smaller cities. As per an ASSOCHAM study, the rise in purchasing power of Tier II & III cities consumers has attracted many fashion brands to foray in these markets. Premium brands are scaling up operations, targeting aspiring customers, offering products at attractive price points. People who are aware about brand value and spend lesser than they would have on a luxury brand, are an attractive market for entry-level premium brands.

Brands address shift in consumer demands

Changing buying habits have pushed brands to address the shift in luxury consumer behavior. E-commerce players offering luxury and premium products are aligning their offerings to the needs of consumers. Internet boom and the penetration of social media has played an essential role in creating awareness among buyers of premium products. Consumers regularly seek the first source of information from social media, and many seek personalised, targeted promotions like emails on new collections and discounts from brands they wish to own.

Global luxury fashion brands are partnering premium e-retailers to leverage growing demand. A Euromonitor, Forrester and McKinsey study reveals digital share of global luxury market will be around 20 per cent by 2025.

Social media influence digital luxury market

Social media has flourished significantly, with shoppers spending a considerable amount of time online, and 50 to 60 million consumers buying fashion online. By 2020, this number is expected to double. A recent report published by BCG and Facebook estimates 70 per cent of the branded apparel in future will be digitally influenced.

India’s luxury spending is at par with the UAE, far ahead of Turkey, Thailand, and Argentina, and growing faster than Singapore and Australia. The country, with its favourable trade and FDI policies and penetration of organised sector, is one of the most promising markets for investors.

 

 
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