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India’s Digital Economy In A Nutshell
Decoding India’s Ecommerce Opportunity
India’s Ecommerce Landscape: Key Players
India’s Ecommerce Startup Ecosystem
India Vs China Vs USA: A Comparison
Ecommerce Funding Trends (2014 to 2023)
Ecommerce M&As Trends (2014 to 2023)
Top Indian Ecommerce Subsectors & Hubs In Q1 2024
Notable Ecommerce Startup Investors In Q1 2024
InFocus: Fashion Ecommerce
Market Opportunity Startup Landscape
Funding Analysis
Top Hubs For Fashion Ecommerce Entrepreneurs
How AI & GenAI Can Level Up India’s Fashion Industry
Ecommerce Unicorns & Soonicorns
Ecommerce In India: Key Trends To Watch Out For In 2024
Ecommerce Startups’ Stock Performance
By 2025, 56% of all new internet users will be from rural areas, and 65% of new internet users will be female
Source: Inc42
Source: Inc42
Note: This is not an exhaustive list
The ecommerce market in India is expected to grow at 19% CAGR from 2022-2030
users expected to grow at 12% CAGR from 2022-2030
Overall Ecommerce Market
Fashion Apparel & Accessories
Smartphones
Electronics & Appliances
Food & FMCG
Beauty & Personal Care
Furniture & Home Decor
Others
Source: Inc42, BCG, Secondary Sources
Indian Ecommerce Engine: The Players Powering India's Online Shopping Bandwagon
Source: Inc42
Total Funding (2014 to 2023)
3-Year-Funding CAGR (2019-2022) Number Of Unicorns
Source: Inc42, Secondary Sources
Note: N/A means data not available.
Key Statistics From India’s Ecommerce Startup Ecosystem In 2023
$2 Bn+ Raised By Ecommerce Sector
$1.6 Mn Median Ticket Size
20+ M&As Recorded
D2C Most Funded Ecommerce Sub Sector
Bengaluru Hub With Most Ecommerce Funding
Delhi NCR Accounted For Most Deal Count
Inflection Point Ventures Most Active Investor
Ecommerce funding nosedived by 47% YoY in 2023
Source: Inc42
Source: Inc42
Median ticket size down by 33% YoY in 2023
Source: Inc42
Source: Inc42
Note:
GIVA, Jumbotail, Gynoveda
XYXX, P-TAL, HairOriginals
Kikibix, Freakins, Flash
XYXX, Farmley, Solethreads
Nat Habit, The Sleep Company, Gynoveda
Boingg, Sheerdrive, Happy Nature
Freakins, Wootz.work, Cirkla
NOTO, PeeSafe, Evolved Foods
SuperBottoms, Solethreads, Mokobara
Design and Development
Manufacturing
Marketing and Sales
Consumtion and Use
Source: Inc42
After-Sale Service
Trend Forcasting
Design Conceptualisation
Fabric Sourcing & Testing
Textile Production
Garment Construction
Quality Control & Testing
Branding & Positioning
Retail Distribution
Ecommerce Platforms
Consumer Behavior Analysis
Fashion Shows & Events
Consumer Persona Identification
Return & Exchange
Product Use/ Care Tutorials
Product Longevity Analysis
Luxury Segment (INR 50,000 and above)
High-end Designer Wear
Luxury Brands
Ecommerce Retailers
Premium Segment (INR 10,000 - INR 50,000)
Marketing and Sales
Mid-range Segment (INR 2,000 - INR 10,000)
Designer Labels
High Street Fashion Brands
Ecommerce Retailers
Source: Inc42
Affordable Segment (Below INR 2,000)
Contemporary Brands
Fast Fashion Retailers
Ecommerce Retailers
Local Boutiques
Street Markets
Ecommerce Retailers
Cost Advantage
Market Reach
Customer Insights
Operational Efficiancy
Source: Inc42
Brand Visiblility
Lower overhead costs
Reduction in middlemen expenses
Economies of scale in procurement and distribution
Access to a wider customer base
Ability to target niche markets effectively
Opportunity for global expansion
Data-driven decision making
Personalised marketing strategies
Understanding of customer preferences and behavior
Streamlined inventory management
Automated order processing and fulfullment
Fast time-to-market for new products
Enhanced digital marketing opportunities
Increased brand awareness through online channels
Potential for influencer collaborations
Source: Inc42 Analysis, Secondary Sources
Note:
of India's overall apparel
in 2030 | Brands names have been added for reference only
RAO EMIZA FOUNDER & CEO
In the realm of ecommerce, mastering reverse logistics is indispensable for fashion brands aiming to uphold customer satisfaction, cut costs, and refine operations. Reverse logistics, which encompasses the handling of returns, exchanges, and product repairs, poses distinctive challenges for ecommerce fashion brands. Nevertheless, by strategically planning and implementing effective strategies, these challenges can be transformed into opportunities for optimisation and enhancement. With 37% of Indian online shoppers returning fashion items, as revealed by PWC India, the significance of efficient reverse logistics for brands cannot be overstated.
Below are key strategies for ecommerce fashion brands to optimise their reverse logistics processes:
Clear & Transparent Return Policies: It is the cornerstone of optimised reverse logistics. Fashion brands in ecommerce should ensure that their return policies are easily accessible and understandable to customers. It's crucial to clearly communicate factors such as return eligibility criteria, return shipping costs, and the process for initiating returns. Transparent return policies foster trust with customers and facilitate smoother return processes, thereby enhancing the overall customer experience.
Efficient Returns Management System: The implementation of an efficient returns management system is paramount for optimising reverse logistics. This system should feature a user-friendly returns portal or interface, enabling customers to initiate returns effortlessly. Providing options for customers to generate return labels and track the status of their returns is essential. Integrating this system with inventory management software allows for real-time updates on returned items, facilitating faster processing and restocking.
For instance, Myntra partnered with Ekart, a logistics provider specialising in fashion returns, to implement the "Easy Returns" programme. This initiative offered customers multiple return options, prepaid return labels, and real-time return tracking, resulting in a 20% reduction in return costs, improved efficiency, and profitability, along with increased customer satisfaction.
Centralised Return Processing Centers: Centralising return processing centers can significantly streamline reverse logistics operations for ecommerce fashion brands. By consolidating returns at centralised locations, brands can enhance efficiency in processing returns, conducting quality checks, and restocking inventory. Centralisation also fosters better coordination between various departments involved in reverse logistics, leading to faster turnaround times and reduced handling costs.
Investment in Technology and Automation: Leveraging technology and automation can greatly enhance the efficiency of reverse logistics processes. Implementing barcode scanning systems, RFID technology, and automated sorting mechanisms improves accuracy and speed in processing returned items. Integration with advanced analytics software enables data-driven insights into return trends and patterns, facilitating proactive decision-making and process optimisation.
For example, AJIO, a leading online fashion platform, partnered with a technology company specialising in AI and data-driven logistics solutions, to implement a customised system. This system utilised AI-powered return analysis, predictive analytics, and automated return sorting, resulting in a 40% reduction in return processing time, a 15% decrease in overall return rates, and enhanced customer communication.
Strategic Partnerships With Logistics Providers: Collaborating with experienced logistics providers specialising in reverse logistics can provide valuable support to ecommerce fashion brands. Partnering with third-party logistics (3PL) companies with expertise in handling returns grants access to specialised infrastructure, resources, and industry knowledge. These partnerships help brands optimise reverse logistics processes, improve efficiency, and reduce costs associated with returns management.
Notably, the collaboration between Myntra and Ekart resulted in a 20% cost reduction and higher customer satisfaction through the "Easy Returns" programme, offering multiple return options and real-time tracking.
Quality Control & Refurbishment Services: Implementing stringent quality control measures is crucial for effectively managing returned merchandise. Ecommerce fashion brands should establish clear criteria for assessing the condition of returned items and categorise them accordingly. Products in good condition can be restocked for resale, while damaged or defective items may require repair or refurbishment. Offering refurbishment services ensures that returned products can be reintegrated into inventory, maximising asset recovery and minimising losses.
Continuous Monitoring & Optimisation: Ecommerce fashion brands should regularly review and analyse key performance indicators (KPIs) related to reverse logistics, such as — return rates, processing times, and customer satisfaction scores. Identifying areas for improvement and implementing corrective measures allow brands to adapt to changing market dynamics and evolving customer preferences.
In conclusion, optimising reverse logistics is imperative for ecommerce fashion brands to remain competitive and deliver exceptional customer experiences. By implementing effective strategies such as clear return policies, efficient returns management systems, centralised processing centers, technology and automation, strategic partnerships, quality control measures, and continuous optimisation, brands can streamline reverse logistics processes, reduce costs, and improve overall operational efficiency.
Embracing these strategies enables ecommerce fashion brands to navigate the complexities of reverse logistics with confidence and achieve sustainable growth in the dynamic ecommerce landscape.
Source; Inc42
Note: This is not an exhaustive list
Between 2018 & 2023 D2C Brands Garnered 93% Of Investments Within
Source: Inc42
$2 Bn+ Total Funding
Source: Inc42
Note: Based on funding recorded between 2018 and 2023 Seed Stage Late Stage
Key Areas Use Case
Product & Concept Design
Supply Chain Management
Virtual Prototyping And Sampling
Design Inspiration And Trend Forecasting
Fabric And Material Selection
Pattern Generation And Design Iteration
Demand Forecasting
Inventory Optimisation
Quality Control & Assurance
Returns & Exchange Customisation
Virtual Try-On
Dynamic Pricing Marketing & Sales
Customer Support
Personalised Recommendations
After Sales
Automated Return Processes
Return & Exchange Likelihood Predictions
Interactive Tutorials
Customer Support
Source: Inc42 Analysis, McKinsey, Goldman Sachs
Supporting Insights
In 2021, Levi Strauss initiated a machine learning bootcamp aimed at instructing employees on utilising the tech for design endeavors.
Use of Generative Adversarial Networks (GANs) to transform sketches, mood boards, and descriptions into detailed high-quality designs.
Enhance robotic automation in warehouse operations and inventory management with the aid of real-time analytics.
Tailor made return/refund process along with offers can be automated for fashion ecommerce shoppers in India.
McKinsey suggests that embracing generative AI has the potential to increase the operating profits of the apparel, fashion, and luxury sectors by an estimated $150 Bn to $275 Bn.
Utilising AI, Benetton personalised customer recommendations by analysing their browsing and purchase history, leading to a 7% increase in customer spending value.
By combining computer vision technology with generative AI, the return/exchange process for products, including verification, can be automated.
Video GANs have the potential to generate tutorial videos for do-it-yourself (DIY) products like furniture, jewelry, and more
Startup Name Target Segment Fashion & Apparel
Use Case/ Potential Use Case
Source: Inc42
Ecommerce/ Retail
Ecommerce/ Retail
Ecommerce/ Retail
Ecommerce/ Retail
Fashion & Apparel
Ecommerce/ Retail
Ecommerce/ Retail
Ecommerce/ Retail
Ecommerce/ Retail
Product Photography, Social Media Graphics
Product Photography, Social Media Graphics
Conversational Commerce
3D Digital Asset Creation
AR-AI Based Virtual Try-on Solutions For Ecommerce & D2C Brands
Product Photography, AI Generated Models
AI Based Vernacular Voice Serach Integration For Ecommerce
Product Photography For Automobile, Fashion And Other Segments
Chat Based AI Sales Agent For Ecommerce Companies
Full Stack AI Based Solutions For Retail And Ecommerce
Note: The list also includes Indian startups that have ever entered the unicorn club. However, some of them might not be valued at or above $1 Bn currently.
Quick Commerce For Speed
According to Redseer, between 2022 and 2023, the GMV of quick commerce increased by 77%, rising from $1.6 Bn in 2022 to $2.8 Bn in 2023. In contrast, the overall ecommerce sector experienced a growth of only 14-15%. This data suggests that q-commerce is currently the most dynamic category within ecommerce and is likely to remain so for the next five years.
AI-Integration
From personalised product recommendations online to customised shipping and returns, AI is positioned to disrupt the entire ecommerce industry in India. This is evident from McKinsey's projection that GenAI could contribute $150 Bn to $275 Bn to the fashion industry alone. Such estimates suggest that the overall impact on the retail/ecommerce sector will be significantly greater.
Beyond Metro To Pick Pace
The migration of shoppers from Tier 2+ cities to Indian ecommerce websites is not a recent trend. What's noteworthy is that during the last "Great Indian Festival" by Amazon, 80% of shoppers and 65% of sellers hailed from Tier 2+ cities.
M&As In D2C Brands
The current bear market (excluding AI/GenAI) in India's startup funding ecosystem, coupled with heightened demand for investor exits, is expected to drive increased merger and acquisition activity in the D2C segment in India.
In-house Manufacturing
Driven by the pursuit of quality excellence and heightened geopolitical risks from China, more Indian D2C brands are contemplating establishing in-house manufacturing or assembly facilities for their products. boAt and Lenskart were among the pioneers in taking proactive steps in this direction.
Source: Inc42 Analysis, McKinsey & Company
Source: NSE, Inc42 calculations
www.inc42.com
Inc42 is India’s largest tech media & information platform on a mission to build & serve India’s tech, startup & internet economy. From breaking the latest news to discovering the hottest startups, from spotting upcoming trends to simplifying complex concepts, we cover everything tech in India’s internet economy.
Born in January 2015, Inc42 has become the leading source for news & analysis on India’s rapidly growing tech, startup & internet economy. Inc42, with over 40,000+ published stories, 85+ research reports, 120+ conferences & events & having featured 1000s of entrepreneurs, now reaches over 25 Mn+ tech leaders & professionals every month.
SANDEEP SINGH, SAIFLAN AIJAZ ANALYST
SABITH DESIGN
Contact: editor@inc42.com
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