India’s $130 billion lifestyle market, with fashion accounting for ~80% and the rest beauty and personal care (BPC), is expected to grow at 10%–12% CAGR to reach $210 billion over the next five years, largely led by the organised segment. India’s e-lifestyle market is poised to grow from $16–$17 billion in 2023 to $40–$45 billion in 2028. These are among the findings from the latest study, ‘E-Styling India: Decoding India’s Online Fashion and Lifestyle Shopping Trends‘ released by Bain & Company and Myntra.
This growth in e-lifestyle will be enabled by the easing of short-term inflationary pressures, combined with structural and favourable demand shifts, such as rise in income, growth of fashion forward, digital native Gen-Z shopper base as well as an increase in demand for organized/ branded products. Additional tailwinds from superior customer value propositions of trendy selection, faster delivery, easier returns, tech-enabled purchase journey, social media powered discovery and omni-access. This will bridge the massive penetration headroom versus global markets such as the US, China and Germany, which are at 35%+ e-lifestyle penetration; as such the-lifestyle penetration in India will grow from 13% to 18%–22% over 2023–28
“India’s e-lifestyle market has come of age in the last few years, with a diverse shopper base – 2 in 3 online shoppers are from beyond top 50 cities, 1 in 2 are from non-affluent segments, and 1 in 3 are Gen-Z. There still exists massive penetration headroom. 1 in 5 dollars spent on lifestyle will be online,” said Shyam Unnikrishnan, Partner at Bain & Company.
Currently, e-lifestyle is dominated by fashion, comprising ~75% of the market, and accessories and women’s apparel are expected to grow faster than other fashion segments. Beauty and personal care (BPC) has become more mainstream with ~16% penetration in 2023 and is expected to grow slightly faster over the next 5 years.
Another prominent trend driven by online platforms is the rise of the trend-first fashion market in India. With a large width of assortment and faster refresh cycles, this online trend-first market is expected to grow eightfold, reaching $4–5 billion by 2028. Consequently, the online share of trend-first fashion is projected to increase to 50%–55%, up from the current 30%–35%.
- In 2023, more than 175 million customers across India shopped for lifestyle online, transacting 6–7 times annually on average.
- For 40%–45% first-time e-commerce shoppers, lifestyle is their first purchase, thus becoming a key gateway category for e-retail.
- These online shoppers are visiting more platforms and visiting them more often; these shoppers are also completing purchases over a shorter duration.
- Deeply entrenched shoppers (defined as those with spend greater than INR 50,000 annually on a platform), visit their preferred platform at least once a day on average, and purchase over 25 times per annum versus the market average of 6–7.
- The 60 million Gen-Z shopper base transacts more frequently but spends lower per order.
- These fashion-forward, digital natives account for 25% of the e-lifestyle market, at $4 billion e-lifestyle GMV.
- New-age insurgent brands have seen 2X higher adoption among Gen-Z.
In order to win Gen-Z, it is critical for brands to cater to their needs and preferences by offering an affordable and trendy assortment, highlighting authenticity in brand positioning, tech-led shopper journeys, and active influencer endorsements.
This has created opportunities for India manufacturing evident in the growing share of India assortment for global brands. Enabled by enhanced manufacturing capabilities of not just cotton but also technical textiles, brands working closely with the manufacturers for faster GTM, and controlled cost and agility and greater role of tech in sourcing is bolstering India’s position as a fashion sourcing destination for brands.
India has been a core market for top global brands—90% of the top 50 global brands are already present in India, half of these brands have over $30 million in revenue from India operations. The confidence in India as a key lifestyle market is underscored by the launch or planned launch of over 60 global brands in the last 12 months. These span scale, niche, luxury and new age brands across fashion and beauty.
“Three in five global brands have entered India via the online channel in the past year and we are proud to have contributed to the launch of some of these global brands in the country. A well-rounded and high-decibel launch, facilitating easier discovery, access to intel about the needs of Indian fashion-forward consumers and Myntra’s reach to 99% of serviceable pin codes are among the key factors enabling the scale-up of the global brands in the sub-continent,” said Nandita Sinha, CEO, Myntra.
A deeper look at distinct, high-growth brands point to a common playbook to scale online sales in India. First, a relevant and differentiated customer proposition across selection, value and service experience; second, a well-oiled sourcing engine. And lastly, an ability to build a strong brand through targeted social media and online campaigns. In addition, for global brands, an empowered for India org and association for seamless go-to-market are critical enablers of growth.
