The Future of Fashion: How India's retail landscape is transforming

India's fashion and apparel industry is transforming, with rising disposable incomes, a young and tech-savvy population, and rising urbanization. By 2035, the Indian retail market is expected to reach $2,500 billion, with the fashion and apparel sector playing a significant role, says a report titled ‘Indian Retail: Changing Orbits for a New Trajectory’ by Anarock and ETRetail. Growth is driven by several factors, including the rise of e-commerce, the penetration of organized retail into Tier II and Tier III cities, and the evolving preferences of Indian consumers.

The rise of e-commerce

E-commerce has revolutionized the way Indians shop for fashion and apparel. The convenience of online shopping, coupled with the increasing availability of affordable smartphones and data plans, has led to an increase in online shoppers, particularly in Tier II and Tier III cities. By 2035, the number of online shoppers in India is expected to reach 700 million. E-commerce platforms offer a vast selection of products, competitive prices, and personalized shopping experiences, making them an attractive alternative to traditional brick-and-mortar stores. The COVID-19 pandemic further accelerated the shift to online shopping, as people sought safer, contactless shopping alternatives.

One success story in this e-commerce space is that f Myntra. The online fashion retailer is particularly excited about the opportunities in India's e-lifestyle market. As Venu Nair, Chief of Strategic Partnerships and Omnichannel, Myntra says, “At Myntra, we are particularly excited about the opportunities as India's e-lifestyle market is expected to scale from $16-17 billion to $40-45 billion by 2028." Myntra is focusing on providing a seamless omnichannel experience to its customers, integrating its online and offline channels to offer a personalized and convenient shopping experience.

Table: India’s e-commerce growth

Growing demand in Tier II and III cities

The growing demand for fashion and apparel in Tier II and III cities is another key growth driver. Rising disposable incomes, coupled with increasing aspirations and the reach of e-commerce, have led to a rise in retail activity in these cities. Retailers are targeting these markets, offering a wide range of products and brands to cater to the evolving preferences of consumers. The improved infrastructure and connectivity in these cities have also made malls and retail real estate a more attractive investment option. No wonder Trent, the retail conglomerate is expanding its footprint in Tier II and III cities, recognizing the untapped potential in these markets. "They are increasingly akin to metros in terms of vibrance and aspirations. Yet they are heterogenous in terms of retail potential depending on the local economy and hinterland that each of the cities serve," explains P Venkatesalu, Chief Executive Officer & Executive Director. Trent is adopting a localized strategy, tailoring its product offerings and marketing campaigns to suit the local tastes and preferences.

Evolving consumer preferences

Indian consumers are becoming more brand-conscious, quality-driven, and tech-savvy. They are also seeking more personalized and experiential shopping experiences. This has led to the rise of new retail formats, such as concept stores, pop-up shops, and interactive flagship stores. Malls are also transforming into experience hubs, incorporating entertainment, dining, wellness, and digital innovation to attract consumers. The future of retail lies in hybrid spaces that blend online and offline shopping seamlessly, offering consumers a unique and personalized shopping experience. "Across the industry, there is a growing focus on creating environments that are interactive, curated, and experiential that seamlessly blend commerce with lifestyle," opines Pushpa Bector, Senior Executive Director and Business Head Retail, DLF Malls. In fact, DLF is transforming its malls into experience hubs, incorporating entertainment, dining, wellness, and digital innovation to attract consumers. DLF Malls is also focusing on sustainability, prioritizing green buildings and energy-efficient designs.

Sustainability and ethical consumption are also gaining importance among Indian consumers. This has led to a rise in demand for sustainable and eco-friendly products, pushing brands to adopt more responsible and ethical practices.