Even so, the report, How India buys Fashion online, by retail tech firm Ace Turtle, found that between January and August this year, e-commerce fashion companies saw a spike of 417% in orders during special sales events.
Researchers looked at data from one million products from more than 30 fashion brands sold to over 20,000 Indian postcodes. Events included Myntra’s End of Reason Sale in June, and Amazon’s Freedom Sale in August.
While online platforms such as Flipkart and Jabong stage big-scale sales with high discounts, it is a myth that much bigger discounts are available on sale days, the report’s authors found.
“Most online companies prepare well in advance for this sale period and clear stocks by giving discounts,” Baqar Naqvi, of Wazir Advisors, a business consultancy firm, told livemint.com.
But he added, “This increase in online sales heralds a new and exciting phase for new brands. And for those who are small, online marketplaces have given them a new channel to reach more customers.
“Thus, while sale volumes have grown, ASPs have come down because of huge discounts, proliferation of private labels as well as smaller brands.”
Most orders on sale days come from Delhi, then Bengaluru and Pune, researchers said.
Footwear was especially popular during sales. This, the report notes, is possibly because footwear is expensive, and people therefore eagerly await sale days to grab a bargain.
Researchers also found people in non-metro cities tend to buy higher-priced products – including footwear – during sales. Purchases from non-metro cities spiked by 70% during sales, compared to just 14% in metro cities.
Demand from these non-metro cities – smaller, tier II and III Indian cities – for online shopping is growing significantly, the report notes. It says Snapdeal, for example, generates 60% of its sales from tier II cities and smaller.
Tier II and tier III cities is where most of India’s middle class lives, which makes these cities a key consumption hub, said Naqvi. However, top-end brands find it difficult to run stores in these cities, due to minimum viability and control issues.
Online channels don’t face such difficulties and are able to serve customers good discounts and a wide range of products, he added.
Sourced from Ace Turtle, Livemint; additional content by WARC staff