The fashion industry has always been the early adopter of technology, which has helped the industry stay ahead of the curve. The online fashion industry continues to grow upwards with order volume growth of 51 percent and GMV (Gross Merchant value) growth of 45 percent in FY-21 as compared to the previous financial year.
The faster volume growth as compared to GMV has led to a marginal decline of 4 percent in the average order value, highlights Fashion E-commerce Report by Unicommerce.
Fashion labels have been at the forefront of re-inventing, re-strategizing, and re-aligning themselves to rapidly evolving business environments and changing consumer needs. The industry has also observed multiple retail brands establishing their niche in the e-commerce industry.
Brand Websites Driving Fashion Growth
The fashion industry is setting new benchmarks of innovation in the e-commerce industry. The rising adoption of D2C amongst fashion brands has helped them build a strong connection with the consumer leading to higher growth.
The brand websites have reported 66 percent order volume growth and 77 percent GMV growth in FY-2021 as compared to the previous financial year. The strong order volume growth supported with higher GMV growth has led to a 6 percent increase in average order value.
As compared to websites, marketplaces have reported 45 percent order volume growth and 33 percent GMV growth, with an 8 percent decline in the average order value for FY-2021. This strongly reinforces that the fashion brands are investing aggressively to build a stronger D2C presence.
Rising Demand from Tier II and Tier III+ Cities
The fashion segment is often the first encounter for consumers with e-commerce in Tier-II and Tier-III cities of India. The trend of shopping fashion online is getting prominent in Tier-II and Tier-III cities, with 118 percent order volume growth coming from Tier-II cities and Tier-III+ cities driving 192 percent order volume growth.
Omnichannel Gaining Momentum
In the last year, the fashion segment embarked upon the omnichannel journey, with an increasing number of fashion brands integrating their offline and online stores. Companies are now fulfilling 20-25 percent of their omnichannel orders from the store, indicating increased adoption of omnichannel across the majority of brand stores. While the majority of omnichannel orders (55-60 percent) are still being generated from the website, the marketplaces have grown omnipresence significantly in the last 15-18 months from being a negligible contributor last year to now contributing 40-45 percent of overall omnichannel orders.
Interestingly, the fashion-focused marketplaces are the first ones to embrace omnichannel solutions and the other prominent marketplaces are now also adopting an omnichannel solution
Women Wear Dominate Online Fashion & Kidswear the Biggest Gainer
Women wear holds the majority share of the e-commerce fashion market with a 50 percent market share in FY-2021 and reported 30 percent order volume growth in FY-2021 as compared to the previous financial year.
On the other hand, the kids wear segment took the industry by surprise with over 200 percent order volume growth and the market share significantly increased from 3 percent in FY-2020 to 17 percent in FY-2021. The menswear segment maintained consistent growth with 37 percent order volume growth and 33 percent market share in FY-2021.
Western Wear Maintains its Leadership Position
The western wear segment is growing rapidly. It recorded 57 percent order volume growth in FY-2021 compared to the previous financial year, and it accounted for 65 percent market share in FY-2021.
Interestingly, the men's apparel segment is the biggest contributor to the overall western wear segment and it accounted for 55 percent market share of overall western wear in FY-2021 and reported 40 percent order volume growth.
The kid’s western wear segment reported a sharp order volume growth of over 300 percent and its market share increased from 3 percent in FY-2020 to 28 percent in FY-2021.
On the other hand, the ethnic wear segment reported an order volume growth of 41 percent in FY-2021 vis-a-viz FY-2020 and accounted for 35 percent market share in FY-2021. The ethnic wear segment is majorly led by the women’s apparel segment and it constitutes a 95 percent market share of overall ethnic wear in FY-2021 and reported 43 percent order volume growth.
Casual Wear Continues to be a Preferred Choice of Consumers
Casual enjoys the dominant position in the fashion apparel market and accounted for 84 percent market share in FY-21 and 49 percent YoY order volume growth in FY-2021 as compared to the previous financial year.
However, the formal wear category is gaining momentum as the market share increased from 11 percent in FY-2020 to 16 percent market share in FY-2021 and over 100 percent order volume growth. The growth of the formal segment can be attributed to the increasing number of offline shoppers shifting towards online shopping platforms.
Commenting on the report release, Kapil Makhija, CEO of Unicommerce said, “Fashion segment is one of the biggest contributors to the e-commerce industry of India with the highest order volume. This report deep dive into the fashion industry to analyze the trends in the online fashion space. It’s a unique report that sheds light on the changing consumer buying patterns and preferences, rising adoption of D2C and omnichannel and new segments in the online fashion space. We are confident that this report will help fashion e-tailers in understanding the changing dynamics of the fashion e-commerce industry. We have received a phenomenal response for all our previous reports and we are committed to helping e-tailers in their e-commerce journey. This report is part of our continuous effort of providing valuable insights about the e-commerce industry and helping sellers to simplify e-commerce selling.”