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$30 Billion Of Fashion Market To Be Digitally Influenced By 2020, Says BCG-Facebook Report
Around $30 billion of the domestic fashion market, which currently accounts for 70 per cent of the branded apparel market, will be digitally influenced by 2020, according to a report by Boston Consulting Group and Facebook
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Around $30 billion of the domestic fashion market, which currently accounts for 70 per cent of the branded apparel market, will be digitally influenced by 2020, according to a report by Boston Consulting Group (BCG) and Facebook.
"Of the approximately $70 billion Indian fashion market today, about $7-9 billion is already digitally influenced. This influence is expected to multiply nearly four times to reach nearly $30 billion by 2020," it said.
The report titled — 'Fashion Forward 2020 — says all this digital transformation is happening on the mobile with as many as 85 per cent online apparel shoppers preferring mobile over any other device.
The report also reveals that fashion is the first category that most people buy online with nearly 30 per cent of new shoppers likely to start buying online with apparel and footwear. Fashion e-commerce today, is already sizable at 4-5 per cent of total fashion market and is comparable to sales from department stores put together," the report pointed out.
The report also points out that online purchase for fashion category will multiply nearly four times to reach $12-14 billion by 2020 accounting for a significant 11-12 per cent share of Indian fashion market. Approximately, 40 per cent of this growth will be driven by a spurt in new shoppers, while the remaining will be driven by maturing existing shoppers.
"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 per cent will come from lower tiers (Tier 2 or even lower) and nearly 37 per cent will be older than 35 years of age," said Rohit Ramesh, Partner and Managing Director, The Boston Consulting Group, India said.
The report also focuses on how the changing face of the fashion consumer will bring about a change in the online purchase behaviour. Today, while discounts are the largest drivers of online shopping, the new online shopper will look beyond discounts. Women and lower tier shoppers, for example, are driven more by variety while older shoppers care more about convenience. Hence, the online fashion market will increasingly pivot towards variety and 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 per cent 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.
A key finding of the report is around the interplay of online and offline channels in consumer paths to purchase. The online shoppers are using a number of channels to discover, research and purchase apparel. Digital has become a significant channel in the entire journey of the consumers and not just the purchase stage. Consumers are increasingly going online to discover the latest trends, designs and get to know about brands.
Bedi went on add that 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.
It also calls out for the need for shift in media spending by brands and retailers towards digital.
The report clarifies that implications for fashion players to win in this digital world which include 'here & now' strategies like leveraging digital to connect with consumer across the various touch-points to more futuristic strategies like optimizing assortment at 'individual' level and digital-enabled personalisation.