Amazon fashion business doubles in a year

Amazon claims that its online fashion sales have grown between 80 and 100 per cent over the past one year, as one in three visitors on its platform is now looking to buy apparel and accessories.

According to the US-based retailer, Amazon has grown into the single-largest fashion retailer in the country, a claim which is contested by rival Flipkart that says it along with subsidiaries Myntra and Jabong controls 70 per cent of India’s online fashion market.

With over 15,000 brands available on its platform, Amazon says its stellar growth was possible because of a 50 per cent increase in selection of products. It says the category is also the largest in terms of bringing new users, especially from tier-II and tier-III cities.

“Everything we are doing in terms of selection, price and value is beginning to get across to the customers. We still think it’s Day One of the online fashion journey in India and penetration is still very low,” said Arun Sirdeshmukh, head of Amazon Fashion, India. “From this point forward, what is important is who is going to own the greatest share of fashion market in India.”

He said the online sales contribute just 4 per cent of the total fashion retail in the country and the figure is expected to rise to 15 per cent in a few years. Everything Amazon is doing today is to get ready for that shift, and become the most preferred destination for customers to shop for fashion online.

While the contribution of fashion to Amazon India’s revenues isn’t close to overtaking the contribution from smartphones and electronics, the fashion segment is gradually taking the lead in terms of orders being placed. Even among premium customers on Amazon’s platform, one of three Prime deliveries being made are fashion products.

The company says the simple explanation for this is that fashion is encouraging customers to make repeat purchases, something that goes hand in hand with its Prime strategy. 

In figurative terms, Amazon says 60 per cent of customers who shops for fashion on its platform end up returning within a year to buy something else from it.

“A Prime customer as a subset is among our best customers in terms of repeats and volume of business. We are seeing one in every three orders  being made through Prime being a fashion item. These are the customers who will form our long-term strategy and will remain loyal to us,” said Sirdeshmukh.

Going forward, Amazon says its partnership with Shoppers Stop will help it grow in the fashion category, making available to offline customers more than 150 brands available exclusively online. As for the part of the deal, which will allow Amazon to gain an offline presence within Shoppers Stop stores, Sirdeshmukh said the company was still working on a plan.

As for experimenting with offline retail, which its rival Myntra has already begun, Amazon says the opportunity for growing online fashion retail is so large that it makes no sense to go after offline sales right now. In the markets, where online retail makes up around 15 per cent of the overall retail sector, the company says it is still growing at 15-20 per cent year-on-year.