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Fashion Street! Yes that was the one stop shopping place and the answer for all our fashion woes during college. With the savings from our pocket money, we used to rush after classes to check the latest collection of the season at our favourite stalls. Of course we could not spend long hours in one place, as at times the shopkeepers were in no mood to bargain for their goods. But on few occasions lady luck did smile on us, when we were able to negotiate a good deal on some of our favourite clothing and accessories.
Well those were the days of the past when that was the only way one could shop for fashion – by visiting stores during stipulated times. Without putting a stop to a few shops, there was no way to check and buy the best of the product one wanted. However, moving forward in to the virtual world, online stores have been introduced making our lives a lot easier. Be it fashion, food, groceries, consumer electronics, movie tickets or jewelleries, e-commerce has made almost everything available at the tip of our fingers.
While many fashion houses continue to have their brick and mortar retail stores, some have also ventured on to the digital platform. They have either created their own websites or have collaborated with e-commerce websites, allowing consumers across the world to shop from the comfort of their own home. The fashion e-commerce market consists of sale of fashion goods such as accessories, clothes, shoes, bags, jewellery, cosmetics, luxury goods, as well as any related services through online channels. The fashion e-commerce market comprises of revenue generated by the establishments using several online platforms and tools for trading fashion products.
Why does the Fashion industry need E-commerce?
E-commerce acts as a tool for modernization and development, enabling luxury brands to be widely accessible to the worldwide market. Many businesses have opted for online sales and the fashion industry has utilised the e-commerce concept, as the transformation from desktops to smartphones is increasingly shifting. Fashion apps can be a valuable investment, since there is round the clock accessibility and customers prefer to refer to apps for any sudden needs. Plus it is more likely to get repetitive consumers. Some of the major players in the fashion e-commerce market are Amazon, Flipkart, Alibaba, Snapdeal, eBay, Myntra, ShopClues, and HomeShop18.
Increasing use of internet and smartphones is expected to contribute to the expansion of the fashion e-commerce industry. According to the Digital 2019 Global Overview Report, the total number of phone users including smart and feature phones reached 4.78 billion, which was 61.51% of world’s population in 2019. The smartphone users increased from 2.5 billion in 2016 constituting 33.58% of the year's global population to 3.5 billion in 2019, which was 45.04% of the world’s population. This has also led to an increase in the number of online shoppers. This scenario is anticipated to boost the demand for fashion and other e-commerce markets, generating higher revenue for the online fashion industry over the coming years.
Growth of Fashion Industry in E-commerce
Technological innovations are a leading trend in the fashion e-commerce industry. The companies dealing in the market are adopting new technologies such as artificial intelligence (AI), barcode scanners, virtual reality outfits, and e-commerce automation tools that offer highly personalized and relevant consumer experience. Moreover, many fashion companies are launching new apps to sell their products online in order to reach a large consumer base. For instance, in June 2019, Amazon launched an AI-powered tool named StyleSnap, which uses machine learning to find similar styles and clothes. StyleSnap is an app wherein people can take a picture, upload, and search for similar clothes available on Amazon.com.
The global fashion e-commerce market is expected to decline from US$531.25 billion in 2019 to US$485.62 billion in 2020 at a compound annual growth rate (CAGR) of -8.59%. The decline is mainly due to the COVID-19 outbreak that has led to restrictive containment measures involving social distancing and remote working, and the closure of industries and other commercial activities. The entire supply chain from production to international trade has been impacted. However, the market is expected to recover and reach US$672.71 billion in 2023 at a CAGR of 11.48%.
With the current market scenario, many fashion companies have tactically retained their positions in the fashion world with a combination of traditional stores and e-commerce options. This gives the consumers an opportunity to use both ways to shop for their preferred products. It is clear that the e-commerce mode provides several benefits for the fashion industry to increase their consumer base and grow in other potential markets. Apart from growth, e-commerce also turns out to be a sustainable choice, thereby reducing inventory cost and man-power.