The scale will reach 200 billion US dollars! Indian online fashion will become an important growth driver for Amazon

Although the conflict between e-commerce giants such as Amazon and the Indian government has recently become a hot topic, it is undeniable that even for Amazon, which dominates the global e-commerce market , India is still an e-commerce market that cannot be abandoned .

One such lucrative segment is the online fashion and apparel market in India, which is still in its infancy.

According to RedSeer Consulting, India’s online fashion market is growing at a compound annual growth rate (CAGR) of 32%. According to Wazir Advisors, apparel and accessories account for 20% of India’s physical retail market, making it the third largest segment after jewelry and watches (26%) and food and groceries (23%) .

What’s more, India’s online fashion market appears to be resilient to the country’s tough economic conditions. Unicommerce reported a 45% increase in gross merchant value for the online fashion sector in the fiscal year 2021 ending in March, driven by a 51% increase in sales.

Not surprisingly, fashion /apparel is expected to be one of the key pillars of e-commerce growth in India, accounting for a considerable portion of the overall e-commerce industry . The industry is expected to reach $200 billion in revenue by 2026. This provides a solid opportunity for Amazon to significantly increase its revenue.

Amazon's sales in the online fashion category in India grew 40% year-on-year in the fiscal year ending March 31, 2021. Fashion and beauty is one of the largest categories on Amazon India, said an Amazon India executive.

It is also the fastest growing category for Amazon India in terms of adding new customers. One-third of Amazon India’s new customers come from the fashion category. In addition, 65% of Amazon’s online fashion demand comes from smaller tier-II, tier-III and tier-IV towns, which are growth hotspots in the Indian e-commerce market.

But even so, Amazon still lags behind Flipkart's Myntra. Flipkart's subsidiary Myntra currently controls 60% of India's online fashion market, and Amazon has been taking active measures to promote its growth in the online fashion sector.

Gene Munster of Loup Ventures estimates that 20% of Amazon’s growth could come from India over the next five years, and Amazon’s aggressive moves in India’s fast-growing online fashion and apparel market will be a big part of driving Amazon’s growth!

India

Amazon

Fashion