Why Online Fashion Companies are FAILING in India Business Case Study

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#business #startups #businesscasestudy #fashion • Why Online Fashion Companies are FAILING in India? Business Case Study • Why majority of fashion-focused online companies failed to make a mark • Remember the heady days of Babyoye, Firstcry, Hoopos, Fashionandyou, Craftsvilla, Zovi, Freecultr and many others. They had raised plenty of risk capital but the majority of them either failed to keep afloat independently or in a shoddy state. • Over the last five years various verticals in e-commerce failed to take off but in this story, we’re gauging why many players fumbled in fashion space? • Fashionandyou, Koovs, Craftsvilla, Zovi, Freecultr, YepMe, Roposo, Voonik and Limeroad had collectively raised over $432 million. Out of aforementioned companies, only Limeroad seems to be in good shape (as it claims). The company claimed to grow at 150 per cent in terms of revenue during the calendar year 2017. • Too many private labels too early • Besides Myntra, Koovs and Limeroad have been able to survive in the business. But, why is there a high mortality rate in the online fashion? • “Multiple reasons,” says Manmohan Agarwal, Founder of now defunct e-commerce platform Yebhi. According to him, too many companies jumped to private label bandwagon without understanding the nuances. Players like Zovi, YepMe, and Freecultr started with private labels. “They didn’t realize that private label comes at an evolved stage, not at the beginning,” emphasises Agarwal. • For an instance, Myntra started testing private labels in 2012, fairly after five years of its existence. Even in the offline space, Shopper Stop and Pantaloons also have brought private labels after establishing a strong relationship with customers on the back of branded fashion. • Private labels are typically squeezed into an array of well-known brands discreetly. “Myntra has successfully been able to create space for its private labels – Roadster, HRX, Dressberry, and Anouk amidst branded fashion,” states Satish Meena, Senior research analyst at Forrester India. • Inventory led models tend to win over marketplace approach • The fundamental way to build fashion is to keep inventory, believes Manmohan. Fulfilment is very important in fashion. If a company selling fashion rely on market inventory, it can’t gauge the depth of fast selling SKUs. • Unlike electronics, fashion requires 12-18 months advance planning. Keeping inventory is an important piece of the planning process. “Inventory essentially lets you forecast demand easily,” says Manmohan. • Low average basket size makes unit economics unviable • Private labels or online only brands worked well in western markets like the US. Zappos (acquired by Amazon) did well in the US while ASOS has been displaying stellar performance in the UK. • Horizontal players are too big to fight • Currently, Flipkart claims to have over 75-80 per cent market share in overall online fashion segment through its affiliates – Myntra and Jabong. Some rough industry estimates hint that Amazon has a single digit market share in fashion segment. • • Road ahead for online fashion • Though, the majority of online companies catering to fashion are either dead or acquired (in distress sale) or struggling. Still, observers and entrepreneurs seem to be bullish about the segment. “Now, it’s time to build vertical businesses in e-commerce including fashion as a market has matured and evolved in the past two years,” says Meena. • Startup • Startups • Startup News • Startups News • Indian Startup • Indian Startups • Indian Startup News • Indian Startups News • Indian Startup Ecosystem • Indian Startups Ecosystem • Startup in India • Startups in India • Indian Entrepreneurs • Indian Founders • Founders • Entrepreneurs • Business • Business News • Business News India • Venture Capital • Venture Capitalist • Venture Capitalists • Venture Capital in India • Venture Capitalists in India • Indian Venture Capitalists • Startup Funding • Fund Raising • Starting Investing • Startup Failure • Startup Stories • Startup Failure Stories • Startup Success • Startup Success Stories • Indian Founders • Indian Entrepreneurs • Entrepreneurs in India • Founders in India • Start a Startup • How to Start a Startup • Startup News in India • Trending in Startups • Trending in Business • Startup Ideas • Business Ideas • Business Podcast • Podcast with Founders • Podcast with Entrepreneurs • Business growth • Seed Funding • Pre Seed Funding • Series A Funding • Series B Funding • Series C Funding • Series D Funding • IPO • Investment • Investments • Investments in Indian Startups • Angel Investors • Angel Investors in India • #fashion #fashionstyle #fashionblogger #fashiontrends #fashionshow #fashiondesigner #fashionista #fashionweek #fashionmodel #fashiondesign #startups #startupbusiness #startupbusinesses #startupindia #business #startup #startupideas #startuplife #startuppitch #startupevent #businessman #businessnews #businessowner #businessgrowth #businesscoach #businesscasestudy #businesscasestudies

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