Second wave, curfews could hamper online fashion retailers recovery

Covid-19 has slowdown India’s apparel retail market once more. With malls and stores under lockdown in metros business is at its lowest this year. In fact, the scenario was different just a few weeks ago. Footfalls in stores had increased and ecommerce players too were doing good business after few bad months in 2020. Walmart owned Myntra and Ambani owned Ajio two of India’s largest fashion e-commerce firms saw a recovery in 202o after taking a hit during lockdown.

Sales recovery augurs well

Myntra and Ajio had both seen a fall in nationwide sales due to the lockdown in 2020. With no outing and socialisation, people did not feel the need to buy new clothes. Then there were supply constraints and deliveries slowed down. The festive season however, brought some cheer and both fashion etailers surpassed pre-Covid reach by the end of the year, as indicated by market intelligence firm Kalagato’s study.

The study revealed, while athleisure category was the only one that continued to grow during the lockdown period, other categories lagged behind. However, the festive season gave them a sales boost as well. The Kalagato study indicated tech-savvy youngsters make up the bigger share of buyers, however older customers too have shopped online during the pandemic. For example, Myntra shoppers in the 45-plus age group went up almost 12 per cent in 2020. And Ajio, recorded a huge 98 per cent increase in 45 plus category shoppers. What’s more it’s the Tier II, III markets that clocked in more orders for both firms.

Kalagato’s data on monthly active users highlighted, similar patterns for both players. By December, nearly 60 per cent Ajio and Myntra app users were opening the apps at least once each month. Incidentally, the percentage of customers who transacted on Myntra was nearly four times that of Ajio in January 2020. However, by December 2020, both players had similar range. “The even-ing out of order patterns and loss of momentum is a direct result of the lockdown,” Kalagato’s report said.

Bug bears on the way

However, the study also showed despite the recovery, there have been several bug bears on the way. While the recovery looks good on paper, there have been struggles. As in the months following the lockdown, both had to offer huge discounts to boost sales. They even began levying additional fees on low-value orders to stay afloat. And then their were logistical issues like of return deliveries had to be quarantined for 48 hours.

Now with the second the wave, curfews and lockdowns, how both etailers manage their business and sales will be watched as it will be a reflection of the online fashion segment as a whole.