Fashion apps carve a niche in this growing segment

It can be tough to choose an appropriate dress for a party. To tackle such existential problems, social fashion networking apps such as WithMe and Styledotme have come to the rescue of young women. These apps offer personalised styling, a networking platform for people with similar interests in fashion, and lead customers to online retailers who sell fashion products recommended by them. Realising the business potential many new players have entered this space and have tasted success.

A growing business, huge potential

These apps have a good future, feel experts. In the last 12-15 months, at least a dozen such apps have got good investments from investors. For example, fashion network Roposo, backed by New York-based hedge fund Tiger Global Management, recently raised 5 million dollars (Rs 33.63crores) from Bertelsmann India Investments, taking its total funds raised to 21 million dollars (Rs 141.27crores). As Saket Dhankar points out social media is the new fashion guru. He along with other investors has put money into WithMe this year. It is estimated that fashion e-commerce will grow to 35 billion dollars (Rs 23,542.90 crores) by 2020. Also, this segment offers a huge scope to experiment with business models. In China, social fashion start-up such as Mogujiem, which has more than 80 million users, struck a deal to buy rival Meilishuo. Last year, Yahoo acquired American fashion app Polyvore for 230 million dollars (Rs 1,547.10 crores).

Features make apps popular

Fashion buying can be quite complex and it’s here that these apps make it so simple and fun. Sequoia Capital-backed Voonik tries to understand the user’s body type, height, skin tone and personal style. Then the app’s algorithms will start tracking the user’s online behaviour such as what products she spends time on, which product details pages does she linger on etc. When sellers on the Voonik platform upload images of their products, the app’s system runs image-recognition algorithms to understand the attributes of the product such as colour and design pattern. Finally, the app’s personal styling engine processes every bit of collected information to recommend specific products to specific users. Styledotme’s app allows consumers to instantly poll friends for advice on a certain outfit and even sends phone notifications to signal urgency. Roposo and Limeroad follow a community and content-based approach to discovering the best fit for the user.

It is important for the apps to have fresh content to be able to get repeat customers without having to spend heavily on marketing or offering steep discount. As Suchi Mukherjee, Founder, Limeroad points out that GMV composition should be driven by repeat customers, not discounts. Otherwise, the company will be building a blackhole.

However, Rahul Chandra, Managing Director at Helion Ventures is wary about a vendor-driven approach to personalisation. He believes that the winning model has to be one with the lowest cost of transaction, and breaking even as quickly as possible.