Online Retail Market in India
The retail industry of India is among the top five retail industries worldwide. Rapid development in retailing in major as well as tier-II cities and small towns has paved way for the exponential growth of the industry.
The huge growth potential for online retail is one reason why Technavio analysts predict that the online lingerie market in India will grow at a CAGR of 42.32 percent from 2015-2019.
Although online retailing held a small share in the retail market in India, its share is forecast to increase significantly in the future. Previously, online retailing was limited to the largest cities because of low internet penetration and lack of awareness. However, the demand will increase in tier-II cities in the coming years with a rise in internet penetration, smartphone users, disposable income, and literacy.
Benefits of Online Lingerie Retailing
Changing consumer preferences have allowed vendors to develop products and innovate their product portfolios. The growth of the online lingerie market in India is driven by newer designs and unique themes. In a country such as India where lingerie shopping is not an easy task for girls, online lingerie shopping ensures privacy of purchase. It also solves the problem of limited shelf space.
Online shopping also eliminates the involvement of mediators. An offline sale involves a distributor, retailer, and seller. However, in the case of online retailing, the customer engages with the buyer directly through a computer screen.
For instance, PrettySecrets wound up the brick-and-mortar business to focus completely on online sales. This helped the company to improve its profit margin and offer products lower than the retail price. Vendors are providing special offers and discounts to attract customers.
In addition, there are many types of coupon available that can be applied at various stages of purchase. Unlike other categories of apparel, lingerie is generally subject to minimal discount in brick and mortar stores. However, online retailing offers many offers and discounts on lingerie as well. Customers not only receive product bundling options, but also avail a wide range of discounts, coupons, and offers, either from retailers or from manufacturers directly.
Increased Penetration from Smaller Towns
Online lingerie portals have gained huge traction from small towns. Almost 30% of Zivame’s orders come from small towns such as Bari Brahmana in J&K, Dimapur in Nagaland, and Jharsuguda in Orissa. Zivame experiences 50% repeat purchases every month and is targeting to achieve $160 million sales in the next 4-5 years. Moodsofcloe, a Delhi-based lingerie e-shop, gets more than half a million visitors a month, with 34-36% repeat purchases. These sites are growing by more than 300% YoY.
A recent study by Google India revealed that 51% of online traffic came from the Great Online Shopping Festival held in December 2012. It was noted that huge demand came from tier-II cities instead of the top four metropolitan cities (New Delhi, Mumbai, Kolkata, and Chennai). In 2012, Shoppers Stop also stated that more than 20% of its online business came from consumers residing in tier-II cities and neighboring areas.
Hence, retailers such as Zovi, Yepme, Snapdeal, Flipkart, and Amazon are focusing on expanding their reach in the small towns by improving supply chain capabilities, broadcasting television commercials, providing easy payment options such as CoD, and offering coupons and discounts. Rural shoppers are purchasing products not only by the retailers of India but also by international retailers. These factors will propel the growth of the online lingerie market in India in the future.
