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Home  » Business » Sorry! No discounts at Birla's online fashion store, here's his gameplan

Sorry! No discounts at Birla's online fashion store, here's his gameplan

By Dev Chatterjee
Last updated on: November 24, 2015 12:01 IST
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One of the country's oldest business groups is targeting young online shoppers, but can Aditya Birla Online Fashion take on the big boys of e-commerce?

It took the Aditya Birla group four years to make up its mind on entering the the burgeoning e-commerce market in the country and finally, last month, the group bit the bullet and launched Abof.com (Aditya Birla Online Fashion), an online portal which will retail its in-house labels as well as brands from other companies.

Fashion is worth Rs 1.87 lakh crore or Rs 1.87 trillion in India according to India Retail Report 2015; Google India says, every third shopping search (from the country) is fashion related and queries in the category are growing at 66 per cent year-on-year. No surprises therefore that the Birlas are betting big on fashion.

But the big question really is whether the group that has not seen much success with its existing online venture (trendin.com) has left it too late.

Can it hold its own against established players like Jabong and Myntra and even the smaller and nimbler ones, who have already cut themselves a neat niche within the category?  

Prashant Gupta, president and CEO of Abof says the group has done its homework. It decided to enter fashion retailing after studying the needs and fashion choices of 2000 customers active online.

The brand is targeting millennials (18 to 30 year olds) who may be short of cash but are high on fashion quotient.

"The group decided to take the plunge because as per our own survey there was a need for a site which offers the latest international fashion trends.

We subscribed to London-based WGSN - the world's leading fashion and consumer trend forecasting service - which collates fashion trends all over the world and sends it to us.

We, together with our suppliers, then pick up the trends and offer products via our site," said Gupta, 41, who was recruited by Birla from McKinsey in 2011.

The chairman of the Aditya Birla group, Kumar Mangalam Birla was very clear that the group would not discount and conquer.

The brand will not sell products at a loss and it has to make money in five years' time, he had said. His confidence stemmed from his belief that fashion, which is growing at a breakneck pace, is something his group knows well.  

Birla's house of fashion

"We have huge offline presence in the fashion business with our companies (Madura and Pantaloon) and online fashion portal is a natural choice.

The other reason is the fashion market is growing very fast and we expect the overall fashion apparel business in India to touch $15 billion in the next five years. Of this, online merchandise will be close to $5 billion. There is a new target group of millennials that is looking for particular brands of clothes, in a particular price range. So, our new site will connect with them," said Birla.  

Some analysts echo the same sentiment. "The discount game is over and now it is all about better range, merchandise mix and so on. Birla has the advantage of learning from the past mistakes committed by discount players," says Harminder Sahni, managing director of retail consultancy firm, Wazir Advisors.  

Abof's aim is to build a community of shoppers, cue them to international fashion trends, provide them with a wider choice of brands and styles and focus on the user experience rather than selling cheap.

The advertising campaign on television and in print was launched last month and the group says that it has deliberately not roped in a celebrity as a brand ambassador as it wanted to keep overheads low.  

However, the group's experience with retail ventures has been a mixed bag. While it is the largest offline player in fashion retailing especially after it took over Kishore Biyani's Pantaloon for Rs 1,600 crore in 2012, its grocery brand 'More' has remained a non-starter. The online retailing site trendin.com, which sells only in-house fashion brands, has not made any dent either.  

Abof will be different, says the company. It will offer 100 external brands including in-house labels and Gupta says, "Our strategy is designed to be different from them (Jabong and Myntra). While our competitor's pitch is a combination of large range and deep discounts, our pitch is a combination of personalised and 'youthful' shopping experience, fashion that is trendy and curated, convenience and irresistible pricing."  

Besides, given the growing community of online shoppers and the way the business is churning, Birla said, "Fashion e-retailing will be a two or three player game in future and we will see some shakeout in the sector. Many smaller players are already drifting and if you look at the medium to long term, it's unlikely that one site will have all customers flocking to it and walk away with all the goodies."

The group intends to play the long term game and is banking on personalised catalogues and well-curated merchandise to attract customers.

But the young digital natives are a tough target; spoilt for choice and used to low prices, it will take patience and persistence to win them over. Abof has a long road to trek.

Photograph: Reuters

 

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