Denims and kurtis have turned hot cakes among the net-savvy younger generation making garments e-tailing favourite spot for private equity investments. In last two years, the Rs 650-crore garment e-tailing or the business of selling clothes on the internet has attracted $70-million investments, 40% of the total funding Indian e-tailers bagged during the period. The segment will now grow almost ten-fold to nearly Rs 6,000 crore by 2015 pushed by the Gen Z who already number 7.4 million, a study by management consultants Technopak Advisors says.
The recent inflow of private equity investments firms into many garment start-ups is an indication that the apparel e-tailing platform is reaching a tipping point fast, notes the firm's senior VP Sharad Mehra.
Funds like Tiger Capital, IndoUS Venture Partners, Helion Venture Partners, Sequoia Capital and Accel India have invested in the range of $5 million to $52 million in portals like Letsbuy, Flipkart, Fashion And You, Yehbhi, and Snapdeal. Apart from selling apparel, the e-tailers hawk everything from gadgets to diamonds and from shoes to stationery. With no restrictions on opening or closing hours, e-tailers are going full throttle.
"A customer base of 15 million -- almost a percentage of India's population -- with Naaptol alone, is a strong indication of how hot the e-tailing space is," notes Sachin Singhal, the e-commerce business head at Naaptol, a VC-funded company. Sensing the need to sell fashion apparel, accessories and home decor products from top notch brands, we launched NaaptolClub.com recently. Netizens spending anywhere between Rs 800 and Rs 2000 on apparel purchase online will contribute 20% from current 5% to the e-tailer's business by the end of this fiscal.
For brands and retailers, who have been increasingly trying to warm up to their customers on social networking sites, e-tailing has emerged as a perfect business opportunity.