ECOMMERCE

Fashion e-tailers may die out soon, warn experts

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Many fashion e-tailers such as Voonik, Craftsvilla and Zivame are undergoing difficult times and are struggling to stay alive in the market. As per media reports, Voonik has asked around 200 of its employees that it won't be able to pay them salaries for the next three months as it is on a cost cutting spree. Experts suggest that such a thing was bound to happen with some of the niche fashion e-tailers in the country, as many of them have not been able to offer anything unique to the customers. Some experts also feel that it is a period of consolidation in the e-commerce space in the country and it would become difficult for many of them to survive the competition from the e-commerce giants like Amazon and the combined entity of Flipkart-Jabong-Myntra.

“Many of the fashion e-tailers such as Myntra and Jabong, which are now part of Flipkart, have a backing of a strong hand. Amazon on the other hand is spending heavily towards offering unique fashion apparels on its site and is offering huge discounts to its customers. It would be very difficult for niche players such as Voonik, Craftsvilla and Zivame to face heavy competition from the big twos. I feel that we can see more consolidation in the fashion e-tailing space in the country and smaller players may be gobbled up by larger e-commerce players in the country. Niche players will not be able to offer huge discounts to its customers as funds will dry up and investors will slow down investments in struggling fashion e-tailers,” Amit Chandra of HDFC Securities told THE WEEK.

Chandra further said that many of these e-tailers in India had hired people for very high salaries in the range of Rs 25-30 lakhs per annum from premier institutes such as NIFT and IIMs, and are now struggling to sustain the highly paid workforce. “It is very easy to distribute free money from the investors. Now when the funds are drying up, they are struggling to pay high salaries,” added Chandra.

Experts such as Alok Shende of Ascentius Consulting feels that unless the niche fashion e-tailers in the country come up with something more innovative and unique in their offerings, they won't be able to face competition from the likes of Amazon and Flipkart in the fashion space. “I feel that many of the niche fashion e-tailers have not properly exercised their foresight while hiring people and offering huge discounts to buyers. The smaller players such as Myntra and Jabong which are now part of Flipkart have a larger brand image to leverage on but small niche players are alone there struggling in a difficult market. Many of the small players will need more funds to sustain themselves. In the absence of funds they are likely to die a slow death,” said Shende.

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Topics : #fashion | #ecommerce

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