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Why Fashion E-Commerce needs to be disrupted by Technology to gain Mass Adoption in India!!

- by Mr. Deepak Jain, Founder, Baggout.com(http://baggout.com/)

Indian e-commerce is going through a sea of change with the homegrown companies such as Flipkart and Snapdeal under tremendous pressure from an onslaught of foreign behemoths like Amazon. Profitability is the new buzz word and the magic word “GMV” has finally been buried at its appropriate place.

Electronics and Fashion are top two categories in Indian e-commerce and with Electronics (mainly Mobile Phones) operating on razor thin margins; there is a lot of dependence on Fashion to support the industry’s profitability. However, that can only happen if Fashion can be sold at Full price online. The current state of Fashion e-commerce is really sad with “Discounting” being the biggest (read ONLY) value proposition on offer. And the biggest reason for such a state is that there is a huge difference in the Experience that customers are getting Offline and Online.The users are buying Fashion online mainly because of the discounted pricing; however, this is not sustainable and the industry needs to offer bigger value proposition so that users buy at Full prices. Technology is going to be the key foundation on which this sustainable value proposition can be built.

People buy online because of the broad selection available at their fingertip without going out to the market. However, it means that the customers need to buy the products without looking at them physically and without trying them on to see how it looks and feel on them. The industry has tried to tackle this issue through offering Cash on Delivery; however, it is just a temporary solution.

The customer still feels that Online shopping experience lacks big time as compared to Offline experience leading to a big proportion of target audience never buying online. The in-store convenience of getting style recommendations from the staff and the ability to try them on are missed big time online. In addition, percentage return in COD is very high as the expectation and actuality are different - leading to erosion of profitability.

There are a number of issues that need to be tackled through technology which affect both before and after shopping customer experience. Most importantly, the online shopping experience needs to provide technology based personalization and curation. Effectively, the customer needs to be able to discover the right products from amongst the lakhs of products available online. In addition, the customer needs help in determining which product would look better on her just like she does by trying the same while shopping offline. Here, the customer expects accuracy in the data that has been provided online including the fit, colour and design details. In case, there is any discrepancy, the return is imminent.

These problems are complex and need strong technology involving text and image recognition, machine learning and big data analysis. The first step to everything is accurate product metadata on which everything else would work. This is a rather complex field comprising Text Recognition and Image recognition complementing each other in perfect unison. The other side of the equation is to understand the user so that appropriate products can be recommended by understanding user’s persona and needs.

It is difficult for the e-commerce companies to solve these problems as their area of expertise and focus is to aggregate a large selection of products, generating demand and then handling the logistics. It means that all these problems need to be solved by technology companies. With the Fashion e-commerce setting to grow to 50 Billion USD in India by 2020; creating technology for helping these Fashion e-commerce companies to sell online seems to be a great proposition and business model. Also, this is a global play as most of the companies outside India also seem to be facing the same challenges. Hope to see some strong technology players emerging in the scheme of things and help out these unicorns as well as offline brands in selling fashion online.

Author – Deepak Jain is the CEO of Baggout which is a Fashion Recommendation portal for Women (500K to 1 Mn Monthly Visitors). Baggout has created algorithms for powering recommendations on their partner retailer’s sites and their clients use the technology to power “Automated Tagging”, “Similar Product Recommendations” and “Complete the Look Recommendations” on their websites.

Team Baggout.com
Team Baggout.com
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Can reach me at shalujha48@gmail.com

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