NEW DELHI: On his latest visit to India earlier this month, Walmart CEO Doug McMillon expressed his bullishness not on the retailing behemoth’s global bread-andbutter business of grocery but on fashion. He was reportedly “mesmerised” the way fashion is performing at Flipkart and Myntra and wanted it to be the focused category in India for growth and profitability, according to people familiar with the matter.
Walmart last year snapped up India’s largest e-commerce enterprise Flipkart Group for $16 billion. Analysts said the idea behind the buyout was to push Walmart’s expertise in every-day-low-price daily items in India like it does in the US. But the focus seems to be shifting for the world’s largest retailer after Walmart looked at the sales statistics at Flipkart and its subsidiary Myntra.
“Walmart doesn’t have to look far in India. There is a ready example in Big Bazaar, where a chunk of annual sales might be coming from food and grocery, but the real growth and profits over the years have come from an expanding fashion portfolio,” said Nitin Chhabra, CEO of e-commerce consultancy firm Ace Turtle.
Fashion accounted for about 24% of sales at Big Bazaar around five-six years ago, but the category now accounts for 37% of the chain’s annual revenues, said Rakesh Biyani, joint MD of Future Group.
“This segment has grown in relevance over the years, and continues to play an even more pivotal part in driving higher numbers and benchmarks for the stores,” Biyani said.
India’s booming fashion and lifestyle market is drawing both the world’s biggest retailer and even regional brands. Thailandbased fashion brands Lyn is preparing to enter India. So is Polandbased sportswear brand 4F. Last year, a delegation of several small and medium Turkish brands was studying the Indian market, according to executives at malls. The vastness of India’s fashion market, with the promise of growth at every price point, is attracting brands from China to Poland – both offline and online.
“Even if we suppose that Indians are going to wear the same type of clothes, just this laddering of going from tailor-made to ready-made and national-branded to international brands and designer items will increase the value of the market three or four times,” said Harminder Sahni, founder of retail consultancy Wazir Advisors.
Wazir estimates India’s fashion and lifestyle market has ballooned 10 times to Rs 5 lakh crore annually from about Rs 50,000 crore in 2000.
Over the years, online fashion retailers such as Myntra, and offline chains such as Max and Reliance Trends, have reported growth. Reliance Trends just said its revenues crossed the ?10,000-crore mark.
The size of India’s overall fashion retailing is expected to swell another 10 times to Rs 50 lakh crore in the next 20 years, Wazir estimates.