- In its recent earnings report, Reliance said that
AJIO has scaled new highs with 4x growth in orders from pre-COVID levels. - AJIO’s latest numbers show that it’s levelling up to Myntra while moving fast ahead of other competitors like Tata Cliq, Snapdeal and Koovs.
- However, Flipkart and Myntra continue to hold 60% market share in online fashion retail, according to a Bank of America report.
- Currently, fashion and lifestyle account for just 9% of the total retail sales of Reliance.
But the rise of e-commerce, especially as it spreads into rural India has brought about changes in the fashion e-commerce landscape. AJIO, which up until a year ago, wasn’t even counted among the frontrunners is scripting a story of resurgence now.
AJIO’s fast-tracked growth
“AJIO scaled new highs with 4x growth in orders from pre-COVID levels. Its quarterly revenue run rate is now equivalent to full last year’s revenue,” said Reliance during its earnings results on October 30.
AJIO’s latest numbers show that it’s levelling up to Myntra while moving fast ahead of other competitors like Tata Cliq, Snapdeal and Koovs. While AJIO’s website visits are higher than Myntra, it lags behind in app downloads and users.
AJIO’s growth can be seen during lockdown when it began to see a spike in the number of app downloads.
What’s working for AJIO
Reliance is aggressively pushing ahead with its retail and e-commerce ambitions, and fashion e-commerce is set to play a substantial role. Currently, fashion and lifestyle account for just 9% of the total retail sales of Reliance.
Analysts at Goldman Sachs believe that within e-commerce, RIL’s online GMV will reach $35 billion in FY25E with a 31% market share.
And for that, Reliance is focusing on grocery and apparel segments with JioMart and AJIO. “RIL’s retail business outperformed peers last quarter and we expect this trend to continue given its omni channel offering driving market share wins,” said the Goldman Sachs report specifically pointing out the download trends of both JioMart and AJIO.
For AJIO’s growth, Reliance has opted for the omnichannel approach where the e-commerce site is riding on the inventory of Reliance Trends. “AJIO helps strengthen RIL’s O2O (offline-to-online) capabilities through in-store couponing, aisle kiosks. It does direct deliveries from 350 Trends and 70 Trends Footwear stores,” said the report by Bank of America.
The platform has also enabled facilities like ‘Drop at Store with Cash Refund’ and ‘Pick at Store’ while also integrating the endless aisle kiosks where customers can even browse and order products that aren’t currently available in the store.
With the deep pockets of Reliance, AJIO has also been able to offer great discounts while also making way for exclusive marketing strategies like the ‘Sneakerhood sale’ on AJIO. The platform has also focused on bringing on board luxury brands. “It offers over 2,50,000 styles of curated collections across its own brand and 1,400+ national and international brands,” said Reliance’s annual report.
Resurgence in Indian e-commerce
Indian e-commerce has seen multiple stories of resurgence with a focussed approach with the most popular one being that of Snapdeal, which has bounced back and how, to be India’s third largest e-commerce platform while also solidifying its presence in Tier 2 and Tier 3 markets.
However, when it comes to the fashion category, AJIO’s growth will still see hurdles especially as it faces tough competition from the bigwigs like Flipkart and Myntra. “While AJIO is gaining traction, we believe competition is stiff in the online fashion market with Flipkart’s Myntra/Jabong controlling 60%+ of the market,” believe analysts at Bank of America.
But the potential remains immense – According to McKinsey’s State of Fashion 2020 report, the Indian clothing market will be worth $53.7 billion in 2020, making it the sixth largest globally.
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