Mar 27, 2015
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Amazon India: Indian designers will create new products for online shoppers

Mar 27, 2015

The e-commerce industry in India is expected to cross $100 billion in the next four years, with 35 percent coming from fashion alone. Amazon has chosen a long-term, layered strategy to tap into the demand from online shoppers, set to cross 250 million by 2020. The company has tied up with the country’s premier fashion body, the Fashion Design Council of India (FDCI), and launched a designer store on its platform as part of the strategy.

When Amazon India launched its fashion section in October last year, many called it a late entry in a market dominated by Flipkart-owned Myntra and Jabong. Three months down the line, the American online retail giant has registered a 300 percent growth in apparel sales and fashion has become one of its top three segments in India.

But can designer wear be successful in a medium that attracts many of its users because of discounts? Vikas Purohit, head of fashion at Amazon India, tells India Insight that he foresees the country’s top designers creating products especially suited to online retail to tackle price considerations.
Below are excerpts from the interview. Quotes have been lightly edited for clarity.

Q. Why is Amazon tying up with FDCI and sponsoring its ongoing fashion week?
A: For us, this is not a commercial arrangement and it’s not a partnership for the fashion week. We have done a larger partnership with the FDCI where we will be doing many more things together. They mentioned that they are an NGO and their objective is to grow fashion and fashion designers in India and outside India. We came from a point of view where we believe that today Amazon has to play a role of building a fashion eco-system.

Q. Like other retailers, Amazon is a platform for the masses. And, arguably, designers and fashion weeks cater to a certain class…
A: The assumption is not correct that it is for the masses. If you look at the Amazon India Fashion Week, it is centered around prêt and diffusion lines. So this is a more accessible part of fashion. We realized that the number of Indians searching for Indian designers on our platform was quite a lot. We reached out to designers through FDCI and the discussion happened that: “You people are wanted everywhere. Today you have just two stores – one in Delhi and one in Mumbai – and you are creating products only for those two stores.” But if they get access to 19,000 PIN codes, they said they will be very keen to create different products because they want to become brands. That is one part of the problem which is getting solved.

There is a bigger part of the problem which is also getting solved. Think of the umpteen number of new designers that get out of design schools in India. Now, with this initiative that we are doing with the FDCI, we want to open up the floodgates: any designer can come on Amazon and build his store. Whatever he sells, he pays us a small commission on that. You will see many more new names coming up because they will see success on Amazon.

Q. The top fashion designers are usually considered exclusivist. Do you think the problem of access can be solved? A: It’s not that these designers don’t have the aspiration to grow big. The problem was that they didn’t have market knowledge, which we are going to provide to them. It’s very expensive to reach out to so many markets in India.

Q. Were some designers reluctant to go online?
A: There was aversion to going online. The aversion was the fact that e-commerce is a discount-led phenomenon. We are very clear about it. We don’t control pricing so you choose at what price you want to sell your products. We will ensure we work with you to create a great experience for your product, for your store. Most of them were convinced that this is an exponential way to grow.

Amazon India fashion head Vikas Purohit

Q. So will the price of clothes by designers be the same online and in physical stores?
A: What I foresee happening is they will start creating products which are very different from what is available in their couture stores. Product usually will be a very customized product. That is what they will create for this medium – something that is more scalable and commercial. It’s an assumption that over and above what they have, designers will create new ranges for e-commerce and the customer.

Q. What if they don’t play to the rules of e-commerce and don’t offer discounts/cheaper alternatives?
A: If designers are hungry to succeed, the supply and the demand will merge. We have the patience and the long-term vision to wait out for years to let that happen.

Q. What about private labels on Amazon India?
A: We don’t have any private labels in India on Amazon.

Q. Will the collections at this year’s Amazon Fashion Week be up for grabs on the Amazon website?
A: It’s up to the designers – how many of them want to put it up and ensure that it gets launched on Amazon first. And those discussions are happening and you will see the products on Amazon soon. A normal assumption is that any designer who will showcase his range in future fashion weeks would love to launch those on Amazon itself. Most of them are coming online.

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