BE2C2 Report — While India’s consumer market is likely to triple to $4 trillion by 2025 as rising affluence drives changes in consumer behaviors and spending patterns, (according to a recent PWC report), its fashion market is concurrently rising — estimated at $70 billion in 2016, with $7-$9 billion already digitally influenced, and projected to rise to $30 billion by 2020 — equivalent to 60-70 per cent of the total branded apparel market, another report by Boston Consulting Group said.
E-commerce constituted 4-5 per cent share of the overall fashion market in 2016. However, overall, online spending in the past 3 years has increased sevenfold to 80 to 90 million.
Digital’s influence on broader consumer spending is significant and growing rapidly. Digitally influenced spending is currently about $45 to $50 billion a year, and that figure is projected to increase more than tenfold to $500 to $550 billion—and to account for 30 to 35 per cent of all retail sales—by 2025, ‘The New Indian: The Many Facets of a Changing Consumer’ report released by BCG’s Center for Customer Insight (CCI), says.
Another report by Boston Consulting Group and Facebook titled ‘Fashion Forward 2020’, says online purchase for the fashion category is estimated to grow four-folds to reach $12-$14 billion by 2020.
This growth will be driven by a spurt of new shoppers as well as a maturing shopper-base that spends a larger share of their fashion wallet online.
The number of online fashion shoppers will double from 55-60 million to 130-135 million by 2020, with a significant shift in the user profile, says the report.
Close to 50 per cent of online shoppers by 2020 will be women, over 50 per cent will be from tier 2 or smaller towns and 37 per cent of them will be over 35 years of age.
According to the report, about 25 per cent of all transactions by online apparel shoppers are conducted entirely online. In the future, this is expected to rise as consumer confidence in online shopping increases. In addition to this, a third of all transactions use a mix of both online and offline touch points in the journey.
The report also says that consumers are increasingly spending more time on digital media, engaging with brands directly as well as following influencers and trendsetters.
“The shift in media spending towards digital has begun, but there is further scope as brands and department stores currently spend only 10 – 15 per cent on digital media advertising.”
Going forward, digital will become central not just to the way brands are marketed and sold in India, but also to product design, plan merchandising and customer engagement, the report said.
According to BCG-CCI report, the elite and affluent income segments in India will constitute 40 per cent of all spending by 2025, resulting in the wealthy representing the largest consumption segment for the first time — digitally savvy and fashion conscious.