The retail industry has undergone a significant transformation over the last decade, and it is continuing to evolve, according to Arun Sirdeshmukh, Business Head, Amazon Fashion. In a tête-à-tête with IMAGES Fashion Bureau, he talks about how online retail has helped amplify reach for kidswear fashion in regions that brands can’t reach physically.
Excerpts of the interview...
Tell us about the current scenario of kidswear in India. What is the total sales coming from online markets?
The kidswear category in India is fast becoming one of the most profitable retail segments. There is a miniature version available for every new style that is launched for kids, in keeping with current trends. Modern parents have opened up to the idea of investing in clothes that are best suited for their children. In addition to this, today’s kids are much more aware than the previous generations and like to make their shopping decisions themselves. Exposure to the latest fashion trends through various avenues has led kids to become more brand conscious.Convenience, accessibility and affordability have catalyzed e-commerce as one of the most preferred mediums for kidswear retail. The kidswear category accounted for approximately 20 percent of total sales in apparels on e-commerce. The rising popularity of shopping kidswear online is evident from the growing demand from customers. Both metropolitan as well as Tier II and III cities have shown great enthusiasm for online shopping and this will only grow in the coming years.
A growing number of parents are comfortable buying kidswear online. Do you feel that the online medium has an edge over traditional retail in kidswear?
Aided by the strong economic growth in recent years, disposable incomes in India have been witnessing a continuous growth. This has further resulted in an increasing spending on kidswear by parents. In contrast to the belief that children grow out of their wardrobes rapidly, millennial parents are willing to make the most of the moment and dress their kids in the trendiest of styles. To add to that, the impact of new media, celebrity culture and social media is a massive influence on kids’ fashion choices.
The retail industry has undergone a significant transformation over the last decade, and it continues to evolve. As far as the preference towards an online medium is concerned, brands are trying to reach out to customers through every avenue. Online retailing definitely helps in amplifying reach in regions where companies don’t have physical presence in the form of retail outlets and stores.
What’s the performance from Tier II & III cities when it comes to consuming kidswear online?
In certain parts of India, accessibility can be a challenge for the fashion savvy Tier II and III cities. Therefore, Amazon Fashion ensures that brands enjoy a wider outreach and also allows the customer to engage with a wider array of brands.
We have noticed that sales from Tier II and III cities contribute significantly to the overall kidswear sales. Interestingly, top selling brands in Tier II and III cities include a comprehensive mix of homegrown and international brands. Amazon Fashion has played an important role in revolutionizing the babywear and kidswear market in India by introducing a diverse portfolio of the most loved and trusted homegrown and international brands.
We have the largest kidswear and babywear store in India with over 300+ brands offering a wide selection. Understanding the changing needs of the market, we have brands such as Mothercare, Hopscotch and Gini & Jony, as well as luxury kidswear lines from GAP and United Colors of Benetton and designer brands like Masala Baby among others. With a vision to make the best of fashion accessible to customers across the country, we focus on our foundation of affordable price points that would cater to different customer needs.
Do you feel that online retailers enjoy growing support from customers, especially middle-high income groups?
The market is defined by emerging technologies that change the way customers interact with their favourite brands. Customers have slowly but definitely been moving away from strictly shopping for products and are instead seeking a more engaging experience. The trend has been driven largely by millennials and their preference for experiences. Brands have realised that they cannot survive until they have an immersive and interactive method to engage with their customers which becomes difficult without having an online presence.
In fact, Amazon Fashion’s sales in the kidswear segment grew by almost 43 percent in 2019 as compared to the previous fiscal year.
Since kidswear is dominated by international and organized brands, how are online retailers helping relatively smaller domestic players to emerge in recent years?
The opportunities in the Indian kidswear industry has attracted a long list of international and organised brands. This shift is taking place on account of changes such as a rise in the disposable income of the people and the increasing influence towards foreign culture.
At Amazon Fashion, we are constantly reaching out to sellers across the country, especially artisans and women entrepreneurs. Over the past few years, we have seen relatively smaller domestic players coming in from smaller towns, semi-urban and rural areas. Our goal is to empower sellers and provide them more choice, agility and flexibility to serve this growing demand from all segments of customers across the country.
Do you think brands are understanding the significance of having an online presence to survive in the market?
Today, most customers are gradually switching their purchases to online shopping. With technological advances, there is a change in the manner in which retailers and customers interact, enabling marketers to build their online brand image. Since the line between channels is blurring, we believe that retailers need to focus on creating a seamless experience digitally to attract customers and gain a competitive edge in the market.
Parents often view websites selling kidswear for comparing prices before shopping. So, in terms of frequency of sale and transaction value, how does kidswear online fare when compared men’s wear and women’s wear segments?
Parents see the online platforms as their preferred channel for the convenience, wider selection and doorstep delivery both for kid’s and themselves. In kid’s wear we see a lot of value buying in terms of bundle packs for daily wear. However, the transaction value for kid’s wear is 15 percent lower than average customer purchase on apparel’s. We see this value to be highest in men’s wear. On the other hand, most of the repeat purchase is seen in kid’s wear followed by women’s wear.
According to you, what is the future of kidswear retail in India? Will it grow more online or offline?
The growth of the kidswear market is coupled with increasing brand awareness among kids. A variety of factors have been instrumental in shaping kidswear as one of the most commercially viable segments in the Indian fashion industry.
Owing to the growth potential of this market segment, a plethora of brands have entered India in last few years. With the emergence of e-commerce, exposure to global fashion trends, rising disposable income of the Indian working class, the kidswear segment has received a boost in India. Both brick-and-mortar as well as online shopping are relatively in the nascent stage and there is a pressing need to build a bridge between both spaces. For the present scenario, an omnichannel strategy is the way forward for retail.