online fashion: Value of Indian online fashion, lifestyle market hits $11 billion, to touch $35 billion in 5 years: report


The online fashion and lifestyle industry in India is now worth $11 billion and is slated to grow at a 25% compound annual growth rate (CAGR) to $35 billion by 2028, according to a joint report by consultancy Bain & Company and Aditya Birla Group-owned house of brands firm TMRW.

Traditional brands that have largely operated offline, such as Louis Philippe and Puma, have seen their online businesses grow 34% between 2019 and 2023 to $2.5 billion. New-age online-first brands such as The Souled Store and Bewakoof have seen their online businesses expand 33% since 2019 to $2.4 billion; they are projected to grow at an annual rate of around 35% to hit $10 billion by FY28, the report said.

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“Digital fashion brands have also started to focus on the specific needs that customers have. These brands can over-index on that to build stickiness in customers, and they’re already seeing traction. This approach is pretty different from what traditional brands would have done in the same space,” said Radhika Sridharan, partner, consumer products, retail, strategy and digital practices, Bain & Company.

The report analysed over 700 digital brands and over 1,000 consumers in the online space. Of the brands analysed, less than 10% have scaled up beyond Rs 50 crore, the report noted. However, the number of brands exceeding Rs 250 crore in revenue is projected to jump five times by FY28, led by categories such as expressivewear, ethnicwear, and jewellery.

“The number of breakout brands in fashion has not been that many, and it is not just that capital is a constraint, sometimes capability is a constraint too… This is one of the most complex categories, from the front end demand sensing to the back end supply chain, from design to sourcing to product innovation. So getting everything right is where the complexity kicks in,” said Prashanth Aluru, chief executive and cofounder of TMRW.

Between January 2018 and May 2023, about 100 Indian online beauty and personal care firms cumulatively raised about $950 million in funding, followed by online apparel firms, which raised $430 million, and jewellery and accessories companies, which garnered $150 million, according to the report.

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“The category has been very fragmented… GenZ and millennial customers are going to contribute to 75% of sales for some of these digital-first brands and that share keeps growing. Brands across every category are interested in attracting that customer,” Sridharan added.

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