E-commerce to continue as the game-changer in the New Year

With the New Year heralding in 24 hours, here is looking back at the year gone by and the trends that emerged. And the only thing that seemed to have ruled the apparel retail industry in India was the boom in e-commerce. The forecast is that the year ahead will continue to be under the e-commerce spell with brands and physical retailers joining the bandwagon with their own strategies. Other important milestones include: implementation of GST that is expected to bring tax reforms and boost revenues, foreign investors eyeing funding opportunities, portals joining hands to be ahead in competition and foreign brands and big home-grown apparel houses jumping onto the e-commerce fray.

Experts say, there would be consolidation in the way both physical and online retailers do business. Both will try to bridge the gap by agreeing to the quantum and period of discounts to be offered on products and various initiatives to attract consumers in a still slow economy and low consumer spending. Studies reveal m-commerce is going to be the next big step for e-retailers. For example, fashion portal Myntra has already announced its plans to go completely mobile-platform.

Hybrid retail models to rule the retail

While e-commerce biggies viz. Flipkart, Amazon and Snapdeal are battling it out to lead the pack and all three getting big ticket investments from foreign investors or parent company in case of Amazon, leading Indian apparel retailers, already having a strong offline presence are silently marching ahead with their own online strategies. Established players like Arvind, Reliance, Shoppers Stop, Madura, Raymond, Future Group are busy preparing their own online platforms to sustain and expand existing customer base.

A move that could help them consolidate as well as differentiate from marketplace models, is different collections for their own stores and portals. While their merchandise is already available with third-party e-platforms like Flipkart, Myntra, Amazon, Snapdeal or Jabong, offline retail majors are planning separate inventories to keep the consumer interest intact in their product lines.

On the other hand, estimated at 2.3 billion dollars (about Rs 14,000 crores) at present, online retail accounts for just 0.4 percent of the overall retail market in India, according to retail advisory firm Technopak. Experts believe that since online is still a young medium, having a store presence gives credibility of being an established brand name to the company. And touch and feel continue to play an important part of the purchase decisions in majority of people’s lives. Looks like, hybrid is the way ahead for growth of the organized retail industry.

Reforms, funding to boost retail

After the Narendra Modi-led government took charge at the Center, there were a lot of expectations. The government was able to garner attention through its budget announcements with a proposal of setting up a few mega textile clusters with a fund allocation of Rs 200 crores. The recent approval of the Constitutional Amendment Bill on Goods & Services Tax (GST), is expected to lead to the rollout of an ambitious indirect tax reform expected to raise revenues and boost growth. How far these announcements would bring cheers to the retail industry only time will tell.

The government’s efforts to bring artisans from rural clusters like Varanasi and Chanderi on online platforms like Flipkart with the help of designers will also help in promoting brand India on the global platform. After the completion of the 100 days at the Centre, the government launched an ambitious new initiative to promote locally manufactured products and attract investments. ‘Make in India’ campaign covering 25 sectors, including the textile and garment industry, was unveiled by the Prime Minister in the presence of industrialists and biggies from the corporate world of India and abroad at a ceremony in New Delhi.

Surely, the apparel industry has a lot to look forward to in 2015.