Snapdeal sets target to sell fashion product worth $2 billion in 2015-16
Ecommerce major Snapdeal is tying up with leading fashion brands, designers and some large format retailers such as Shoppers Stop, and has set a target to facilitate sales of fashion product worth $2 billion, or about Rs 12,400 crore, next fiscal. Already, about 60% of its overall orders, at the unit level, already come from the fashion and lifestyle categories, Amit Maheshwari, vice president for fashion at Snapdeal, said.
"The overall contribution (of fashion and lifestyle categories) to the top-line is currently at about 35%, but given the responses we have been seeing from consumers, we are quite confident this will only increase," he said. The Delhi-based company, flush with investor money, after it raised a massive $627 million in a new round of funding, led by Japanese investor giant Soft-Bank in October last year, is making an all-out effort to increase the size and range of its offerings, tying up with big brands as well as niche sellers.
"We have tied up with Fashion Design Council of India to launch our Designer Studio that will bring premium designer wear to consumers. Separately, we are also launching brand stores in January, and are looking at more celebrity endorsements," Maheshwari said. Snapdeal will also increase its focus on tier-2 and tier-3 cities that already account for 12% of its fashion sales.
"We are setting up regional teams that will enhance the relevant assortment of products," Maheshwari said. Industry watchers said fashion is an increasingly important segment for the country's ecommerce majors that operate in razor-thin margins and high cash burn. "Horizontal players will focus on fashion, because it gives them margins and customer traction," said Ankur Bisen, senior vice president at consultancy firm Technopak. "They (big ecommerce players) will try and make transactions more engaging.
But I don't see them taking ownership of fashion, because that's not their forte," Bisen added. "E-commerce companies have to do a lot more vendor development, quality assurance, product development and increase the number of quality brands. It's not just about aggregation," he said. But, clearly, the online retailers see a lot of opportunity in this space. Industry experts estimate that the country's broader fashion and lifestyle segment is worthRs2.6 lakh crore, of which online retail's current contribution is just 1%.