The increasing reliance on third-party players in Indian retail industry is a double-edged sword, presenting both growth opportunities and challenges. The Indian retail market is undergoing rapid digitization, with e-commerce expected to reach $350 billion by 2026. This presents a significant opportunity for third-party platforms and the retailers who partner with them.
What’s driving the trend?
The market is being driven by many factors. One major growth driver is wider reach and market access. Third-party platforms like Flipkart, Amazon, Myntra, and Snapdeal offer retailers access to a vast customer base across India, especially in Tier II and III cities, where physical presence might be limited. This expands reach and drives sales growth. It is especially beneficial for small players who wouldn't have the resources for nationwide expansion on their own.
Also, these platforms have established logistics networks and delivery infrastructure, allowing retailers to tap into efficient and cost-effective delivery solutions, improving customer satisfaction and reducing delivery hassles. Moreover, these platforms offer marketing tools, data analytics, and promotional opportunities, helping retailers reach target audiences and optimize campaigns, leading to increased brand awareness and customer acquisition. In fact, third-party platforms are constantly innovating and investing in cutting-edge technologies like AI, machine learning, and big data analytics. These advancements can help retailers personalize customer experiences, optimize pricing, and improve supply chain efficiency.
Outsourcing warehousing, fulfilment, and delivery to third parties can free up resources for retailers to focus on core competencies like product development and marketing, potentially reducing operational costs. By leveraging third-party fulfilment centers and inventory management systems, retailers can reduce inventory holding costs and improve cash flow. This is crucial in a market like India, where access to working capital can be a significant challenge.
Logistics, infrastructure still a challenge
While the segment does hold a lot of promise, challenges like fragmented logistics infrastructure, limited internet penetration, and varying consumer preferences across regions need to be addressed for widespread adoption. Indian regulations on data privacy and foreign direct investment (FDI) in e-commerce are evolving, requiring retailers and platforms to adapt and comply.
On major concern is when relying on third-party platforms, retailers relinquish some control over pricing, promotions, and customer interactions. This can dilute brand identity and make it difficult to stand out in a crowded marketplace. The presence of numerous sellers on these platforms creates intense competition, often leading to price wars and reduced profit margins for retailers.
There are concerns about data sharing and privacy also as sharing customer data with third-party platforms raises concerns about privacy and security. Retailers need to ensure they have robust data protection measures in place and transparent communication with customers about data usage. Valuable customer data generated on these platforms might not be readily accessible to retailers, hindering their ability to personalize marketing and build long-term customer relationships.
Third-party platforms charge commission fees on every sale, which can eat into retailer margins, especially for smaller businesses. Additionally, platform policies and algorithms can sometimes favor larger players, making it difficult for smaller retailers to compete effectively. Retailers are at the mercy of the performance and reputation of the third-party platforms they use. Delivery delays, customer service issues, or platform outages can negatively impact a retailer's brand image and sales. Indeed, over-reliance on third-party platforms can make retailers vulnerable to changes in platform policies, fees, and algorithms, impacting their control over brand identity and customer relationships.
Then there is the whole issue of inventory management and visibility. Coordinating inventory across multiple platforms and physical stores can be complex, leading to stockouts and inaccurate product information, impacting customer experience.
However, the bottomline is India's vast geography and diverse terrain pose logistical challenges, making third-party platforms' expertise valuable. And Indian consumers increasingly value convenience and access to a wide variety of products, making third-party platforms attractive. The third-party trend in Indian retail is a double-edged sword. It presents opportunities for growth, careful consideration of the challenges is crucial for success. Retailers need to develop strategies to leverage the benefits of these platforms while mitigating risks by diversifying their sales channels, building brand identity, and maintaining control over customer data. Striking the right balance will be key to navigating this evolving landscape.

Expanding its lifestyle portfolio, e-commerce platform, Snapdeal onboarded approximately 1,200 retail brands within the last three months.

Among the notable brands that have joined Snapdeal include Jockey, Rosaline by Zivame, Varanga, House of Ramraj Cotton, John Players, Clovia, Red Tape, Carlton London, Sparx, Campus, and Action.

Himanshu Chakrawarti, CEO, Snapdeal, states, the platform aims is to establish itself as the go-to destination for a value-centric lifestyle.

In the forthcoming two months, the e-tailer aims to include an additional 800 brands. Approximately 95 per cent of the products available on the platform are priced below Rs 1,000, ensuring accessibility and affordability for a broad consumer base.

The recent announcement regarding the restructuring of The Body Shop's UK business will not impact its operations in India, says The Body Shop India.

Operated by franchise partner Quest Retail, the brand's stores in India will continue to operate without any changes.

The administration process initiated pertains solely to The Body Shop UK business and does not affect the global head franchise partners, as clarified by The Body Shop India. Despite the recent developments in the UK, The Body Shop's presence
in India remains unaffected.

Last week, The Body Shop International appointed FRP, a business advisory firm, as administrators for its UK operations, resulting in job cuts and store closures in the UK market. However, the administrators emphasised on the importance of maintaining relationships with key franchise and wholesale partners in Asia, West Asia, and Europe for future success.

Shriti Malhotra, Group CEO - Quest Retail, The Body Shop India, says, all Body Shop stores in India are open as usual, offering customers the opportunity to shop both in-store and online for their favorite products.

Quest Retail, which operates approximately 200 Body Shop stores across India and serves customers in around 1,500 cities through online channels, remains committed to expanding the brand's presence.

Established in 2006, The Body Shop India operates under the umbrella of Quest Retail, focusing on omni-channel expansion and exploring opportunities in retail, quick commerce, and high convenience formats to enhance customer accessibility and brand affinity in the Indian market.

E-commerce venture by Reliance Retail, Ajio added 1.6 million customers to its platform in Q4 FY24.

With a network of over 5,000 delivery nodes spanning the country, Ajio prioritises a seamless shopping experience for its users. This involves leveraging various customer journeys tailored to individual preferences, such as Ajio Luxe and the Exclusive D2C Brand store Ajiogram, which are based on buying and browsing behaviors.

Recently, Ajio announced plans to invest in and support the growth of 100 direct-to-customer fashion startups. Additionally, the company aims to onboard 200 exclusive Indian fashion and lifestyle D2C brands onto Ajiogram in the coming year.

Flagship events like the Big Bold Sale (BBS) have been instrumental in Ajio's success. During BBS, customers from over 19,000 PIN codes across the country indulged in exclusive collections from international brands, owned labels, and homegrown brands. Deals and offers spanned across various categories including fashion, lifestyle, home decor, jewelry, beauty, and personal care.

Over 51 per cent of total orders for Ajio originate from non-metros like Mysore, Ghaziabad, Karnal, Surat, and Bhubaneswar. This underscores Ajio's strong foothold in smaller cities and towns where online shopping for top global brands is increasingly popular.

Driven by the wedding season and festivities, the platform observed a surge in demand for western wear, footwear (especially sneakers), and ethnic wear. Its curated sneaker store, Sneakerhood, expanded its selection by 200 per cent Y-oY- to meet the growing demand.

In the third quarter of FY2024, Ajio launched a content-driven interactive platform for D2C brands, offering a unique solution focused on brand building and visibility. This platform empowers homegrown fashion brands to challenge norms and showcase their vision and innovative products.

Overall, Ajio's holistic marketing approach, combined with its focus on customer experience and strategic partnerships, has solidified its position as a leading player in India's e-commerce landscape, driving growth and innovation in the fashion retail sector.

A prominent footwear player, Khadim India recorded a significant 62 per cent decline in net profit, amounting to Rs 2 crore ($2,40,981) for the third quarter ending December 2023, compared to Rs 5 crore in the corresponding period last year.

Despite this decline, the company's revenue witnessed a modest 5 per cent increase to Rs 156 crore for the quarter, up from Rs 149 crore in the previous quarter ending December 2022.

Khadim India attributes this to the profit gained on the disposal of immovable properties amounting to Rs 32 million included in Q3FY24 and 9MFY23. The company also highlights its expansion efforts, noting the addition of 79 retail stores in 9M FY24, bringing the total retail presence to 864 stores.

Additionally, the company’s distribution network grew with 69 new distributors, totaling 747 as of 9M FY24.

Looking ahead, Khadim India plans to expand its store network across India, with a focus on premiumisation, an asset-light model, and optimal capacity utilisation.

Known for its own brand value footwear and brands such as Cleo, British Walkers, Lazard, Turk, Sharon, Bonito, and Pro, Khadim India commenced its journey in the 1960s in Kolkata. It made its debut on India's stock exchanges in 2017.

In his address as the Chair of the Great India Retail Summit 2024 held in Mumbai on February 15 and 16, Ashish Dikshit, Managing Director, Aditya Birla Fashion and Retail, articulated the profound evolution of India's retail realm. He underscored the remarkable strides witnessed in India's retail landscape over the past few decades, attributing this progress to a potent mix of creativity, technology infusion, and a relentless focus on consumer-centric services.

While acknowledging India's initial lag compared to global retail giants like Walmart, he celebrated the nation's recent rapid advancement, propelled largely by the exponential growth of e-commerce.

Highlighting the staggering expansion of the e-commerce sector, Dikshit said, from a modest $2-3 billion in 2013, the sector has expanded to an astounding $ 60-65 billion today. This meteoric rise has been instrumental in propelling India to the forefront of modern retail, he emphasised. The amalgamation of e-commerce platforms, evolving consumer preferences, and the burgeoning digital payment ecosystem has fueled India's ascent in the retail arena.

Emphasising on the transformative role of technology, Dikshit cited deeper mobile penetration, affordable data rates, and widespread access to entertainment and shopping as key drivers of change. Coupled with the emergence of a new generation of millennial consumers, these technological enablers are reshaping the retail landscape and positioning India as a global innovator, he said.

Dikshit envisioned a future where India would lead the charge in global retail innovation. He envisaged an ecosystem, where creativity, technology, and consumer-centric strategies converge to redefine the retail experience.

India’s retail sales grew by a mere 5 per cent in January 2024, according to a survey by the Retailers Association of India (RAI).

Despite the festive season, sales growth remained subdued in October and November, surging by only 7 per cent increase, while sales in December grew by 4 per cent resulting in a sluggish October-December quarter for retailers.

The RAI noted a discouraging trend in January 2024, with minimal growth observed across various categories, except for segments like jewellery, food, and grocery, which were buoyed by the marriage season.

Many retailers reported negative growth on a like-for-like basis, particularly in the east and south regions of the country, where consumer demand for discretionary products remained weak.

Kumar Rajagopalan, CEO, Retailers Association of India, highlights the challenges faced by retail businesses in January. Even consumer durables and IT retailers experienced hurdles in achieving growth, while garment retailers struggled despite discount offers for non-occasion wear garments, he says.

West India led the growth at 6 per cent, followed by North and South India, each at 5 per cent, and East India trailing behind with only a 3 per cent increase in sales compared to January 2023.

Among categories, Quick Service Restaurants (QSR), food and grocery, and jewelry sectors reported the highest growth rates at 9 per cent each, followed by sports goods and beauty products compared to January 2023 sales levels.

Marking a significant step forward for the brand, Flyrobe has opened its newest retail venture in Nashik. This expansion brings Flyrobe's carefully curated selection of designer outfits to the fashion-forward community of Nashik.

The Flyrobe Nashik store aims to revolutionise the fashion scene by offering a wide range of stylish attire for various occasions, from weddings to parties and beyond. With the option to rent high-end designer outfits at reasonable prices, the store enables customers to maintain a fashionable wardrobe without breaking the bank.

Aanchal Saini, CEO, Flyrobe, says the store’s launch reaffirms the brand’s dedication to offer a convenient and affordable platform for individuals to elevate their style. The new store allows customers to explore fashion while promoting sustainability through clothing rental.

Simran Tondulkar, Proprietor, Flyrobe - Nashik, adds, this eco-conscious alternative to traditional fashion redefines elegance while celebrating ethnicity.

Flyrobe Nashik hosted a special event on February 17, 2023 to celebrate the store's launch, Attended by prominent bloggers and influencers, the gathering unfolded as an evening of style, glamour, and networking. Attendees were treated to an exclusive preview of the latest wedding fashion trends for the upcoming season, adding a touch of sophistication to Nashik's fashion landscape.

Renowned global apparel brand, Dockers has made its debut in the Indian fashion retail market by inaugurating its first store at Pacific Mall Delhi. The brand aims to strengthen its retail presence in the country by opening five additional stores this year in Tier I and metro cities like Hyderabad, Pune, Bangalore, and Mumbai.

In the forthcoming year, Dockers plans to launch 20 more stores, with offline expansion complemented by partnerships with department stores such as Shoppers Stop. Additionally, the brand will launch its online channel, scheduled to go live this week, outlines Berry Singh, Chief Operating Officer, Ace Turtle, the retail technology firm collaborating with Dockers for its Indian market entry.

Known for its expertise in managing licenses for esteemed fashion and lifestyle brands including Lee, Wrangler, Toys ‘R’ Us, and Babies ‘R’ Us in India, Ace Turtle will spearhead Dockers' expansion endeavors both offline and online.

Natalie MacLennan, CEO, Dockers, affirms, the vast potential of the Indian market will enable the brand to connect with the new generation of consumers who prioritise quality, comfort, and style. Its partnership with Ace Turtle will ensure the seamless delivery of the brand experience to consumers across the country.

Dockers aims to tap customers in the 22-35 age group with its California-style Khaki range of products. Characterised by its laid-back California vibe, Dockers' signature Khaki range is poised to resonate with the discerning tastes of Indian consumers.

Leading fashion e-commerce platform, Myntra has recently named Venu Nair as its Chief of Strategic Partnerships and Omni-Channel.

With over three decades of experience in retail, sourcing, business analysis, and strategy, Nair joins Myntra to spearhead the company's strategic partnerships and omni-channel initiatives.

In his new capacity, Nair will focus on expanding Myntra's portfolio of international brands, establishing strategic collaborations with globally recognised brands, and overseeing the omni-channel strategy for brands on the platform. His appointment underscores Myntra's dedication to solidifying its position as the preferred strategic partner for top fashion, beauty, and lifestyle brands aiming to tap into India's growing market potential.

Nair's extensive background includes serving as the Managing Director and Chief Executive Officer at Shoppers Stop, where he played a crucial role in shaping the company's growth trajectory. Additionally, he held leadership positions overseeing the commercial operations of esteemed brands such as Westside, Zudio, and Landmark during his tenure at Trent Ltd.

Prior to joining Myntra, Nair served as the Managing Director of Marks & Spencer Reliance, where he notably expanded the brand's presence across India, doubling the number of stores and fortifying its business operations.

A graduate of NIT Calicut, Nair holds a Bachelor of Technology (Honors) degree, and an MBA in Marketing from SPJIMR, Mumbai.

Footwear giant Birkenstock is celebrating its 250th year by expanding its presence in India. The brand recently opened a new 1,100 sq ft store in Noida's Mall of India, marking another step in its global anniversary store opening program.

This new store caters to the Delhi NCR region and showcases Birkenstock's commitment to offering its iconic footwear to a wider audience. Customers can explore classic designs like Arizona, Gizeh, Madrid, and Boston, alongside newer styles like Bend, Uji, and Stalon.

Jens Hattab, Regional Managing Director, Birkenstock says, this opening reflects the brand’s aim to increase presence in key markets and make its footwear accessible to patrons across the country.

Vinay Bansal, Managing Director, Birkenstock India, adds, the store offers the perfect fusion of foot health and style. The inauguration of the store represents not only the brand's commitment to expanding its footprint in India but also its dedication to offering high-quality footwear that merges comfort with style.