To understand how the fashion sector has fared in 2020, its useful to look at it through the lens of two companies that have come to embody this space in India, Ajio & Myntra.
In a normal year, fashion sales are driven by some of the following themes:
- Travel
- Office ‘appropriate’ clothing; the need to look presentable / sales meetings and so on
- General Social Engagements
- Sporting activities
- Festivals
- Weddings
As you might expect, the first 3 got completely wiped, sportswear just became athleisure so brands were heavily relying on the festival and wedding market to give sales a boost. This typically happens (in India) around September. And to some extent that’s stayed true. For Myntra that’s when the steepest rebound occurs.
Penetration of Fashion specific ecommerce players shows a clear (and perhaps obvious) trend within age groups
Notably, 45+ continues to be the age group where both Myntra (growing 12%) and Ajio (growing 98%) saw highest gains in penetration during 2020!
Reach by app install grew faster amongst Women (127% for Ajio vs 27% for Myntra) and Tier 3 cities showed the highest gains during 2020.
(Get in touch for the detailed break-down).
Browsing rates (assessed by MAU’s or Monthly Active Users) are similar for both players; keep in mind, this is harder for Myntra to do — given that they operate at a much larger base (more than 2X the size of Ajio) and e-commerce has few network effects.
Myntra Achieves Superior Transacting Reach
Measured as the percentage of customers who actually transact on a platform — Myntra’s Transacting Reach was nearly 4X that of Ajio in January 2020; by December, the two players converged and average transacting reach of Myntra settled at ~2 times that of Ajio (even though Ajio doesn’t seem to have taken advantage of the festive season nearly as much as Myntra).
The even-ing out of order patterns and loss of momentum is a direct result of the lockdown. How else would they converge at Zero?
What do Zero orders mean?
I wouldn’t look at this data just in the light of these two companies but also in what it tells us about the industry (both online & offline) at large.
Fashion is a labour-intensive industry that employs millions of people across the value chain — by way of factory & mill workers, logistics, designers, retail stores and malls. All of which is built on the belief that people will continue to buy. But then buying just stops. Even for a month. That’s kind of hard to fathom and by most accounts, it’s an industry that’s still reeling.
As always, do share your thoughts / feedback and get in touch for data!
Thanks for your time,
- Aman
aman@kalagato.co
www.kalagato.co
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