How Amazon is knitting together a tale of fashion domination in India

Amazon has one goal in India – absolute e-tail domination. To achieve that it needs to first win the fashion category. The powers that be in the global e-commerce major know this well and have been working hard to make Amazon very fashionable indeed.

Why is that, you ask? It is because of an illuminating statistic – one out of almost three new customers come to Amazon’s India site to buy fashion. No wonder, then, that Amazon considers it a magnet category. In fact, during the recently concluded ‘Great Indian Sale’ apparel was the single largest category on the platform, ahead of mobile phones, the traditional top seller. And fashion was the second largest category for new customer acquisition during the sale. That is big news in e-commerce as mobile phones continue to be the biggest category for the industry. In 2016, the share of mobile phones was at around 48 percent of gross online retail sales, while fashion accounted for around 20-22 percent, according to research and consulting firm Red Seer.

Fashion is also a high-margin, high repeat purchase rate category, unlike mobile phones, which offer low margins, and customers replace their phone only after around a year. Amazon in the US had a late start in fashion, launching the category only in 2006. “There is a big difference in the way we look at fashion in India compared to how we do it in the US where we were first selling only books and then slowly started adding other categories,” says Arun Sirdeshmukh, Head of Fashion, Amazon India.

This focus right from when Amazon launched in India in 2013 has shown results. According to data from Counterpoint Research, fashion was Amazon India’s fastest growing category, with 78 percent growth in 2016 over the previous year, while Flipkart’s growth in this category stood at 15 percent. However, Flipkart has had a headstart over Amazon in this category, with the homegrown e-commerce major selling fashion products on its own platform and through subsidiaries—Myntra and Jabong. Flipkart, together with Myntra and Jabong, claims to have a 75 percent share in online fashion retail. Amazon disputes that, but has declined to share absolute numbers.

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