With the influx of smartphones, affordable internet, and rapid penetration of UPI technology, India’s e-commerce sector has witnessed significant growth in recent years. According to a report by Invest India, the e-commerce market will grow to $325 billion with India poised to become a worldwide e-commerce powerhouse by 2030.
However, despite the e-commerce boom, big apparel and lifestyle brands continue to invest in brick-and-mortar stores. The D2C lifestyle retailers are choosing omnichannel routes by expanding their stores as customers want the ‘touch and feel’ experience.
“I often take my children to the mall during weekends and by default, I do all my shopping from the physical stores,” Amit Nautiyal told Storyboard18. Puja Verma said, “I prefer offline shopping due to my body shape. Without going to the trial room, I don’t buy any outfit”.
Physical stores remain the preferred choice for apparel shopping, according to a survey by LocalCircles this year. Of the 35,000 surveyed individuals, only 4 percent said they rely solely on online platforms while 47 percent of respondents expressed preferences to shop exclusively in stores (malls, markets) for the “touch, feel, and try” experience. Meanwhile, around 40% of respondents prefer a combination of online and offline shopping.
Anuj Kejriwal, CEO & MD – ANAROCK Retail said, “Even though e-commerce has claimed a portion of the sector, brick-and-mortar stores are going strong – especially since they’re transforming to meet the needs of contemporary consumers who seek a more experiential feel to their shopping than mouse-clicks”.
In a recent statement, Cantabil Retail India Ltd informed the stock exchange that the company had opened five new showroom shops in India in August 2024. Currently, the fast fashion brand has a total of 556 showrooms in the country.
Cantabil’s total sales reached Rs 616.50 crore in the fiscal year (FY) 2023-2024. The company attributed the growth to ‘strong brand recall and expansion of the company’s store network with the addition of 87 new stores in FY24’.
“We have been strategically opening stores in newer cities to tap into the untapped markets and widen our customer base. We are capitalizing on the growing middle-class population and catering to their evolving preferences by opening stores in tier 2 and 3 cities,” Chairman of Cantabil, Vijay Bansal said.
Another retailer Go Fashion has also planned to expand its Exclusive Brand Outlets (EBOs) into Tier 1, 2, and 3 cities in the coming years. The company said it will establish new stores in the north and east regions to bolster the company’s presence. According to Go Fashion’s annual report, of the Rs 558.37 crore of sales, 73.2% came from EBOs, and 2.9% from online channels.
Raymond Group, one of the oldest fashion retailers in the country, opened more than stores in the last 12 months. Besides, Landmark Group lifestyle brand Max Fashion added almost 100 stores in 1-1.5 years and is looking for a double-digit expansion this year. The apparel-to-accessories conglomerate told Storyboard18 that it contribute almost 85% of its business to brick and mortar and 15% to online.
Aditya Birla Fashion, the owner of big brands such as W, Pantaloons, Aurelia, Sabyasachi, etc, has a total store count of 4,664, while the shop-in-shop across departmental stores stands at 9,563. “Over 50% of our stores are fully omni-enabled, while the overall e-commerce channel sales were 12% of our business,” the fashion conglomerate said.
In last month’s annual general meeting of Nykaa, CEO Falguni Nayar revealed that the ‘Beauty’ vertical made up about 73% of its GMV, while ‘Fashion’ contributed 27% to its GMV. However, the contribution margin (as of NSV) has improved from 2.2% in FY23 to 4.9% in FY24.
According to Kejriwal, there has been an uptick in the number of brick-and-mortar store openings across Tier 2 and Tier 3 cities such as Ahmedabad, Jaipur, and Lucknow due to “rising income levels and a growing appetite for premium products among consumers there”. In cities like Delhi NCR, MMR, Bengaluru, and Hyderabad, brands are growing their retail footprint by focusing more on smaller stores that offer engaging experiences for customers, Kejriwal added.
Notably, the big brands have made significant strides in strengthening ecommerce platforms for brand marketing and ramping up sales. The fusion of online and offline shopping has led brands to change their strategies to woo the customers, especially country’s young demographic-the most significant target segments for the fashion industry. Customer convenience, both in-store and online, has also become a key unique selling proposition for the brands.