Online fashion retail is fast becoming the next battlefront for India’s growing e-commerce startups. With two of the biggest Indian e-commerce companies — Flipkart and Myntra — preparing to merge as part of $330 million deal, rival Snapdeal is now pushing aggressively to get its piece of action in the online fashion retailing space.
Less than two months after eBay invested around $134 million in Snapdeal, India’s biggest e-commerce marketplace is putting some of that funding to use by acquiring fashion products discovery site Doozton, a bootstrapped startup, which is less than a year old.
The companies have not disclosed the financial terms.
E-commerce in India is booming, as more consumers get online and the so-called “aspirational middle-class” looks to increase spending on fashion products. And while the market for e-commerce in the country is quite price-sensitive, fashion products are still able to attract premium. Doozton helps consumers buy specific fashion products suited for over a dozen occasions — right from wedding to the Valentines Day, etc.
“The technology built by Doozton will enable an artful and personalized way of listing and suggesting fashion merchandise on Snapdeal, making the acquisition fruitful for burrs and sellers on the platform. At Snapdeal, we have seen a 10x growth in our fashion categories in the last 12 months, and we foresee the benefits of this acquisition will further boost this growth,” said Snapdeal co-founder Rohit Bansal.
Fashion is going to be the next battlefront for Flipkart, Myntra and Snapdeal. Myntra, a specialist fashion e-commerce site, is seeing huge growth too. Online fashion nearly doubled in value from $278 million in 2012 to $559 million in 2013. Investors are scrambling to put money in these ventures to ensure they don’t miss out on the opportunity. In January this year, Myntra closed a $50 million round with four main investors: PremjiInvest, Belgian-based Sofina, Accel and Tiger Global, taking the total capital raised to $125 million to date.
After the latest eBay funding, Snapdeal has now raised $336 million to date.
With Doozton, Snapdeal is aiming to get its piece of action in the space.
Doozton was founded in March 2013 by Pushpendra Singh, an Indian Institute of Technology graduate. “With Snapdeal.com, the technology of Doozton will get a wider and more established platform. I am glad about this acquisition by Snapdeal, which will allow for a much larger canvas for our mission of enabling intuitive and fun merchandising of fashion products,” Singh said.
Growing influence of women shoppers who accounted for a little over quarter (around $500 million) of the total e-commerce sale in 2013, is helping e-commerce growth in categories such as fashion, home decor, jewelry and baby care, according to a recent study by Accel India.
India’s e-commerce market is projected to grow sevenfold to $22 billion in the next five years, as Internet infrastructure improves further, making it easier for the country’s nearly 200 million online population to shop on-the-go. The country’s e-commerce market (sans travel sites) is currently worth $3.1 billion annually.