The Indian e-commerce landscape is undergoing a significant shift, with a rise in online shoppers from tier-II cities and beyond. This trend presents a massive opportunity for apparel businesses, particularly those catering to value-conscious consumers in these regions.

Market potential and growth drivers

A Nielsen report estimates only a quarter of India's 720 million online users (as of Dec 2022) actively transact online, highlighting the vast potential in Tier-II markets. Investors are backing companies like Rozana and Floryo, which focus on serving the value-conscious customer base in these regions. Funding for such ventures is on the rise. Rozana, for example, secured $22.5 million recently. A KPMG study, in collaboration with Facebook India, projects a staggering 12-14 per cent annual growth rate for the fashion market in Tier-II cities by 2022, driven by internet proliferation and growing aspirations. Similarly, as per a RedSeer Consulting forecast the online fashion market in Tier-II cities will reach a size of $7-9 billion by 2023.

A recent Unicommerce report (2024) highlights a significant rise in online kidswear sales, with Tier-II and Tier-III cities contributing a whopping 118 per cent order volume growth. This trend can be attributed to increasing brand awareness and a growing focus on online shopping for children's clothing. In fact, there is growing demand across categories like menswear and womenswer.

Demand for both value and premium segment

The Tier-II market caters to a diverse range of consumers with varying preferences. A significant portion of Tier-II shoppers are value-conscious. Platforms like Citymall and Dealshare have witnessed success by offering everyday essentials and groceries at competitive prices. This segment is likely to be receptive to budget-friendly and private label apparel brands as they are open to exploring new brands with unique propositions

While price sensitivity exists, there's also a growing demand for premium apparel brands in Tier-II cities. Increased disposable income and exposure to fashion trends are driving this growth. This segment presents an opportunity for established brands and new D2C players offering high-quality and trendy clothing.

Interestingly, in Tier II markets both branded and unbranded products can find a place. Established brands can leverage existing brand awareness through social media and online advertising, Tier-II consumers are increasingly seeking established brands. This trend is likely to continue, creating a market for both domestic and international apparel brands.

Unbranded products on the other hand can compete on price and cater to specific needs. They still hold a significant share in the Tier-II apparel market, particularly in the value segment. However, the demand for branded products is expected to rise as consumers become more brand conscious.

Offline market's role in online growth

The offline market plays a crucial role in supporting the online apparel market in Tier-II cities. The presence of physical showrooms and experience centers allows Tier-II consumers to touch, feel, and try on clothes before purchasing online. This builds trust and confidence in online shopping.

Online retail also flourish as they partner local kirana stores or establish pick-up points in Tier-II cities. This facilitates convenient delivery and return options, encouraging online purchases.

Indeed, the rise of Tier-II online shoppers is a significant development for the Indian apparel industry. By understanding the specific needs and preferences of this market, brands and online retailers can develop targeted strategies to capture a share of this growing market. The key lies in offering a variety of products across sectors and segments, catering to both value-conscious and brand-driven consumers. Leveraging the existing offline market infrastructure will further propel online apparel sales in Tier-II cities.

India's e-commerce market is projected to grow to a value of $325 billion by 2030. As per a report by Invest India, the anticipated growth of this market aligns with broader forecasts for India's digital economy, which is expected to reach a staggering $800 billion within the same timeframe.

Currently valued at $70 billion, online shopping represents about 7 per cent of India's total retail market, leaving ample room for expansion. A multitude of factors, including widespread internet accessibility, affordable internet services, and a burgeoning number of smartphone users in rural areas, are poised to drive this promising trajectory in the coming years.

Invest India's report underscores India's impressive internet user base, standing at a remarkable 881 million, making it the world's second-largest. With such a substantial digital presence, India is poised to be the third-largest online retail market by 2030. This growth will be fueled by the rapid expansion of the country's digital economy, signaling a bright future for its e-commerce sector.

With an estimated 500 million shoppers by 2030, India will lead the global online shopping arena. This significant growth can be attributed to several key factors propelling the e-commerce boom including the skyrocketing internet accessibility across the country, with an expected 87 per cent of Indian households projected to have internet access by 2025. Particularly noteworthy is the surge in mobile internet usage, highlighting the pivotal role of smartphones in driving e-commerce adoption.

Other crucial factors driving the e-commerce boom include the rising number of smartphone users, the prevalence of UPI in digital transactions, and the expanding availability of content in local languages.

Over 1.18 billion people or 80 per cent of the current are projected to have access to smartphones by 2026. This substantial increase in smartphone users, coupled with higher average data consumption per user, is expected to further boost the digital economy. Additionally, the Unified Payments Interface (UPI) has emerged as a significant player in digital transactions, facilitating transactions worth $1.5 trillion in 2022.

The proliferation of local language and mobile-first content is notable, with around 73 per cent of India's internet users preferring Indian languages. This preference has led to the establishment of an estimated regional language user base of 540 million, contributing to a market valued at $53 billion.

Invest India also highlights the growing importance of rural-centric e-commerce, with a significant portion of demand expected from Tier II-IV towns and rural areas by 2026. Government initiatives, such as the National Logistics Policy, aim to streamline deliveries to remote areas, thereby enhancing logistical efficiency and cost-effectiveness.

Additionally, the quick commerce market within India's hyperlocal mobility sector is projected to grow to $5.5 billion by 2025. The e-commerce sector is currently witnessing certain noteworthy mergers and acquisitions, with companies strategically positioning themselves for growth.

Government schemes such as Jan Dhan Yojana, BharatNet Project, and the implementation of Goods & Service Tax (GST) are shaping the digital economy of India, says the report.

Marking a significant addition to its trekking apparel range, Indian outdoor and performance wear brand Gokyo has launched India’s first 'Mountaineering Summit Downsuit. Available for pre-order through its direct-to-customer e-commerce platform, this cutting-edge garment is poised to redefine high-altitude expeditions.

Crafted with an 80:20 down-fill blend, the downsuit promises exceptional warmth, while maintaining a lightweight and compact profile crucial for mountainous terrains. Venki Maheshwari, Co-founder, Gokyo states, the downsuit showcases India's capability to manufacture world-class mountaineering gear.

Aligned with the government's 'Make in India' initiative, Gokyo champions local manufacturing across its entire product spectrum, catering to the diverse needs of Indian adventure enthusiasts. The 'Mountaineering Summit Downsuit' stands as a testament to this commitment, featuring water-resistant zippers and pockets, tailored for extreme cold weather conditions.

Expanding its offerings further, Gokyo introduced a women's line this year, diversifying its reach. Additionally, with new points of sale established in Noida and Thane, the brand is set on an ambitious trajectory, aiming to broaden its physical presence and serve a growing customer base.

California-based footwear retailer Skechers has opened its 21st store in Ahmedabad, Gujarat.

Skechers recently also launched its streetwear apparel capsule collection ‘Retroverse’ in collaboration with Kanika Goyal at the Lakme Fashion Week in partnership with the Fashion Design Council of India (FDCI). Representing a step forward for the brand, the collection pushes the boundaries of fashion innovation, says Rahul Vira, CEO, Skechers Asia.

Founded in 1992, Skechers South Asia is a subsidiary of Sketchers USA. The retailer designs, develops and markets a range of lifestyle and performance footwear, apparel and accessories for men, women and children. The brand provides its products in 180 countries.

Renowned sports retailer, Decathlon has appointed Sankar Chatterjee as its new Chief Executive Officer for India. Chatterjee, who boasts over 20 years of experience in the sports industry and has been associated with Decathlon for more than 13 years, assumed the role in February 2024. Prior to his appointment, Chatterjee served as the Country Digital Leader for Decathlon Sports India.

Under his leadership, Decathlon India witnessed a significant digital transformation, with Chatterjee being instrumental in creating an integrated ecosystem encompassing e-commerce, digital marketing, technology, data management, customer experience, and logistics. Notably, he played a pivotal role in the launch of Decathlon Connect store in India.

Barbara Martin Coppola, Global CEO, Decathlon highlighted India's significance as one of the top ten global markets for the brand, experiencing growth rates double that of other markets.

The Q4 net profit of prominent fashion and beauty department store Shoppers Stop increased by 63 per cent to Rs 23 crore ($2.8 million) compared to Rs 14 crore in the same period last year.

During this quarter, the company's revenue also expanded by 13 per cent to Rs 1,046 crore, up from Rs 929 crore reported in the corresponding period of the previous fiscal year.

For the entire fiscal year ending on March 31, 2024, Shoppers Stop recorded a net profit of Rs 77 crore, while its revenue stood at Rs 4,317 crore.

Throughout the quarter, Shoppers Stop expanded its footprint by opening 7 department stores, 3 beauty outlets, and 12 Intune stores, investing a total of Rs 84 crore.

Expressing his satisfaction with the company’s performance, Kavindra Mishra, Managing Director and CEO, Shoppers Stop, emphasises on its commitment to enhance operational efficiency by enhancing customer experience, premiumisation and expanding into high-growth segments.

Established in 1991, Shoppers Stop operates 112 department stores, 7 premium home concept stores, 87 specialty beauty outlets, 22 Intune stores, and 21 airport locations.

Demand for men’s traditional wedding wear is on the rise with the sales of sherwanis and other ethnic attire escalating by 25 per cent over the past three years. Sparking an intense competition amongst key players such as Aditya Birla Fashion, Vedant Fashions and Raymond, this trend is leading to an aggressive expansion in the wedding-wear segment.

Sherwanis, in particular are emerging as the most popular category with 25 per cent of the overall ethnic wear sales. Brands like Tasva have experienced a doubling of their business, with designs like the 'angrakha' silhouette gaining substantial popularity among consumers.

The competition has led to a rapid increase in retail outlets, with Aditya Birla Fashion's Tasva and Raymond's Ethnix alone adding approximately 183 stores over the past two years. Vedant Fashions, known as Manyavar, has also expanded with 94 new stores. Looking ahead, these brands are expected to add around 300 more stores in the next two years.

The success of Vedant Fashions in the market has intensified competition, prompting other players to scale up their offerings. Aditya Birla Fashion launched Tasva in collaboration with fashion designer Tarun Tahiliani in FY22, while Raymond introduced Ethnix in FY19, ramping up their operations significantly thereafter.

Vedant Modi, Chief Revenue Officer, Vedant Fashions, confirms the trend, citing a 20-25 per cent growth in sales of men's wedding wear over the past three years. This growth underscores the pivotal role weddings play in driving demand for ethnic wear, with consumers increasingly opting for premium products like the luxury brand Twamev.

Despite a contraction due to the pandemic, the Indian men's apparel market has bounced back strongly, projected to grow at a CAGR of 18 per cent over the next four years. This growth is fueled by factors such as an expanding middle class, rising discretionary spending, and evolving consumer demographics.

With customers becoming more discerning and informed about Indian attire, brands are focusing on meaningful designs and prioritising comfort alongside luxury. This shift has made high-quality ethnic wear more accessible to a wider audience.
Aside from sherwanis, other popular items include kurtas and kurta sets, with brands capitalising on this demand through expanded networks and competitive offerings. Despite the rise of online shopping, physical stores remain the primary channel for sales, capturing the majority of the market share.

Accessorize London is set to expand its operations in the travel retail sector in India by opening two new stores in Pune and Hyderabad.

The brand currently operates stores in Bengaluru, Hyderabad, and Delhi, and plans to further strengthen its footprint by into the burgeoning travel retail sector.

The new stores will offer a range of fashion accessories such as earrings, necklaces, scarves, sunglasses, and stationery.

Growing at a CAGR of 21.59 per cent from 2024-29, the Indian travel retail market is projected to reach $5.40 billion by 2029, as estimated by Mordor Intelligence. Accessorize London aims to leverage this opportunity to meet the escalating demand for quality fashion products and services in travel retail outlets. The brand’s expansion into travel retail space also aligns with the increasing tourism in India and helps strengthen the brand’s position in the market.

‘Incredible India’ has become a favored tourist destination for many international travellers. In addition, both international and domestic travellers seek gifting accessories, and souvenirs, and last-minute shopping at the airports. This opens up many opportunities for the brand to tap into the growing markets and cater to consumer demands.

Kumar Saurabh, CEO, Planet Retail Holdings, the parent company of the brand, says, the travel retail segment presents an ideal opportunity to the brand to cater to customers engaging in spontaneous and convenient shopping experiences. It aligns with its commitment to deliver top-quality accessories that ensure utmost customer satisfaction.

A Tata Group-owned entity, Trent Limited recorded a 15-fold rise in its net profit for the fourth quarter ending March 31, reaching Rs 712 crore ($85.3 million), a significant jump from Rs 45 crore recorded in the same period last year.

The company's revenue also climbed by 51 per cent to Rs 3,298 crore, compared to Rs 2,183 crore in the corresponding quarter of the previous fiscal year.

During this quarter, Trent strategically expanded its retail footprint by inaugurating 12 new Westside stores and an impressive 86 new Zudio outlets.

Noel N Tata, Chairman, Trent Ltd, emphasises, the brand’s financial performance is a result of its adaptable business coupled with the expansion of its product lines and the robustness of its platform.

Further reiterating the company's commitment to enhance its retail presence, aiming to provide enhanced accessibility and convenience to its customer base, Tata stated, the brand aims to foster close connections with customers by expanding and deepening store network, thereby reinforcing our brand commitment."

As of March 31, 2024, Trent's retail portfolio boasted 232 Westside outlets, 545 Zudio stores, and 34 establishments across other lifestyle concepts.

Esteemed Indian luxury fashion retailer, Ogaan is gearing up to host an exclusive business-to-customer (b2c) shopping fair dubbed the 'Maker's Market' on May 2.

Set to take place at Ogaan's boutique nestled in the heart of Banjara Hills, Hyderabad, this event aims to highlight emerging designers and brands, capturing the essence of both contemporary and fusion styles.

With a focus on introducing discerning shoppers to fresh, innovative labels, the showcase will boast an eclectic array of collections. Among the featured brands in the contemporary segment are 63 East, Aavidi, Artisau, Hiranya, Jodi, Kavya Singh Kundu, Linen Bloom, Nikasha, Studio Moda, and Tarina, to name a few. Meanwhile, the fusion segment will showcase the latest offerings from Bhavik Shah, Dyelogue, Evra by Nikita, Inej, Studio Nirjara, Tatwa, and Vaayu, captivating the city's fashion enthusiasts with their distinctive aesthetics.

In addition to this exciting event, Ogaan recently unveiled a captivating 'fashion meets art' installation at New Delhi store in Dhan Mill. The installation features an all-white display showcasing the exquisite designs of womenswear designer Shweta Kapur across multiple collections, seamlessly blending fashion and artistry.

Founded in 1989, Ogaan has cemented its position as a pioneer in the Indian luxury fashion scene. From a humble beginning with the inauguration of its flagship boutique in New Delhi, the brand has expanded its footprint, now boasting an e-commerce platform and six multi-brand outlets in the capital, along with stores in Hyderabad, Mumbai, and Kolkata.

Global fashion retailer Mango has collaborated with renowned influencers Juhi Godambe, ShivShakti and Vagmita Singh to launch its summer capsule collection on Myntra.

Juhi Godambe’s collection focuses on bold workwear, ShivShakti’s statement pieces tailored for modern women and Vagmita’s collection showcases fashionable casuals.

Bringing an authentic Spanish touch to India customers’ wardrobe, the collection serves as a bridge between the rich heritage and fashion synonymous with the effervescent city of Barcelona, tailored precisely to meet the discerning tastes of Indian women, says Venu Nair, Chief of Strategic Partnerships and Omni Channel Business, Myntra.

The brand plans to promote the collection through digital channels, social media handles of the influencers and Out-of-home (OOH) advertising in cities like Bengaluru.

One of Europe’s leading fashion brand, Mango is known for its design, creativity, sustainability and technology. The rights to sell the brands’ products online in India were acquired by Myntra in 2017 from two previous operators of New Delhi-based DLF Brands and Mumbai-based Major Brands – currently known as Apparel Group – a franchisee operator of various international labels including Aldo, Bath & BodyWorks, Victoria’s Secret, Charles & Keith, Tim Hortons among others.