INDUSTRY

IMMERSION

PROJECT
 Submitted by
Nafis Akhtar Shaikh
Roll No: 124130
PGDM 2024-2026

In partial fulfilment of the requirements for

POST GRADUATE DIPLOMA IN

MANAGEMENT
KOHINOOR MANAGEMENT SCHOOL,
Kurla, Mumbai
400070

Project Co-Ordinator: Prof. Ankita Mukherjee

 Declaration

I, Nafis Akhtar Shaikh of Kohinoor Management School, Kurla west, Mumbai of PGDM (2021-
2023), hereby declare that, I have completed by Project, titled as “A study on E-commerce in
India: Fashion and Lifestyle Industry” in the Academic year 2024-2026

I hereby declare that the Industrial Immersion Project report carried out on “A study on E-
commerce in India: Fashion and Lifestyle Industry” is my work submitted partial fulfilment of
the requirements for Post Graduate Diploma in Management, from Kohinoor Management
School, Kurla Mumbai.

Date:
Place: Mumbai
 Acknowledgement
I would like to express my sincere appreciation to those who inspired me to complete this project
successfully. Initial, I would like to state my sincere thankfulness to Dr Sandeep Sawant,
PGDM Director of Kohinoor Management School, Kurla for addressing me this opportunity.
I am especially grateful to my college professors guide Prof. Ankita Mukherjee for providing
me with endless support and advice in my endeavor.
I am also thankful to all the faculty members who imparted their knowledgeable insights in the
class which assisted to make my basics strong with clear conceptual knowledge.
Lastly but not least I would like to appreciate everyone who helped me to compile my project
during the entire period.
Sr. No Title Page No
1 Introduction 1

Evolution of E-Commerce in India 2

Market Size & Growth Drivers 3
Geographic & Demographic Spread 6
Business Models in Fashion & Lifestyle E-Commerce: 8
Investment & Development: 11
Government Initiatives 12
2 Literature Review 14
3 Methodology 17
Objective of the Study 17
Research Design 18
Secondary Data Collection 18
Data Validation 19
Limitations of the study 19
4 SWOT Analysis: India’s Fashion & Lifestyle E- 20
Commerce
5 PESTEL Analysis: India’s Fashion & Lifestyle E- 24
Commerce
6 Porter’s Five Forces Analysis 28
7 Top Companies in India’s Fashion & Lifestyle E- 32
Commerce Industry
8 Consumer Journey & Experience Mapping 36
9 Financial Ratio Analysis for Leading Players 40
Importance of Financial Ratios: 40
Ratio Analysis 42
10 Finding 45
11 Conclusion 48
12 Recommendation 49
13 Reference 53
Introduction:

Background & Context

Global Shift to Online Retail
Over the past two decades, the world has witnessed a fundamental shift from traditional brick-
and-mortar retail to digital commerce. Innovations in internet infrastructure, mobile technology,
and secure payments have enabled consumers to purchase goods and services from anywhere, at
any time. In mature markets such as the United States and Europe, e-commerce now accounts for
over 20 % of total retail sales. India’s journey has been more recent but equally rapid—
characterized by periods of explosive growth following major technological and policy
interventions.

Digital Penetration in India

As of June 2025:
Internet Users: 830 million+ (> 52 % of population)
Mobile Connections: 1.12 billion (> 80 % penetration)
Smartphone Users: 750 million in 2021, projected to cross 1 billion by 2026

Affordable data plans—spurred by operators like Jio—have reduced the cost of mobile internet
to less than ₹5 per gigabyte. This democratization of access has brought first-time internet users
online from tier II and tier III cities, expanding the e-commerce addressable market beyond
metropolitan regions.

India’s E-Commerce Growth Trajectory

2010–2015: Early adoption phase; general marketplaces (Flipkart, Snapdeal) establish logistics
networks.
2016–2020: Fashion-oriented platforms (Myntra, Ajio) and D2C brands (Koovs, Bewakoof)
capture niche segments; annual GMV growth of 30–35 %.
2021–2025: Omni-channel integration, social commerce, and quick commerce emerge; overall e-
commerce GMV projected at US $188 billion by 2025.

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Rise of Fashion & Lifestyle Online

Fashion and lifestyle—encompassing apparel, footwear, accessories, beauty products, home

décor, and wellness items—has outpaced overall e-commerce growth. Key factors include:
Variety & Convenience: Online stores offer thousands of SKUs, multiple brands, styles, and
price points, all accessible through search and filters.
Personalization: AI-driven recommendations and virtual try-on tools enhance product discovery
and fit satisfaction.
Speed & Reach: Next-day delivery and micro-fulfilment dark stores provide rapid access to
essentials and occasional purchases alike.

Evolution of E-Commerce in India:

Early Beginnings (2007–2012)

First Movers: Flipkart (2007), Infibeam, and MakeMyTrip launched general e-commerce
platforms.
Consumer Hesitation: Limited internet access, trust issues, and lack of digital payments slowed
adoption.
Expansion & Specialization (2013–2017)
Niche Platforms: Myntra and Jabong emerged, focusing exclusively on fashion. They invested
heavily in app development and brand partnerships.
Payment Innovations: Cash-on-delivery (CoD) became widely accepted, addressing trust
barriers.

Consolidation & Growth (2018–2021)

Mergers & Acquisitions: Flipkart acquired Myntra (2014) and Jabong (2016), creating one of
the largest fashion marketplaces.
D2C Rise: Brands like Nykaa, The Souled Store, and Bewakoof launched their own webstores to
own customer relationships and margins.

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COVID-19 Impact: Nationwide lockdowns (2020) drove first-time online shoppers into fashion
e-tail; apparel GMV grew by 70 % year-over-year.

Innovation Era (2022–Present)

Quick Commerce: Startups like Zepto and Dunzo began delivering essentials—T-shirts, socks
—within 10–20 minutes from local “dark stores.”
Social Commerce: Instagram Shops, WhatsApp Business catalogs, and live-stream shopping
sessions blur the line between content and commerce.
Open Network for Digital Commerce (ONDC): Government-backed pilot to allow discovery
and ordering across platforms, aiming to level the playing field for smaller sellers.

Market Size & Growth Drivers

Total E-Commerce GMV

2017: US $38.5 billion
2022: US $74.8 billion (+94 %)
2025 (Forecast): US $188 billion
2030 (Forecast): US $350 billion

Fashion & Lifestyle Segment

2020: US $14 billion
2024: US $21 billion (+50 %)
2025 (Forecast): US $25 billion
2028 (Forecast): US $45 billion (20 % CAGR)

Mobile vs Desktop Traffic

Mobile: 62 % of fashion sessions (2024)

Desktop: 38 %
M-commerce GMV Share: 53 % by 2024, up from 34 % in 2019

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Growth Drivers for India’s Fashion & Lifestyle E-Commerce
India’s fashion and lifestyle e-commerce sector is expanding rapidly, propelled by several key
drivers:

Proliferation of Smartphones & Internet Access:

Over 750 million smartphone users and 830 million internet subscribers as of mid-2025, with
52.4 % of the population online.
Affordable data plans (sub-₹10/GB) from major carriers have democratized access.

Digital Payments Revolution:

Unified Payments Interface (UPI) now accounts for 45 % of fashion transactions.
Widespread adoption of wallets (Paytm, PhonePe) and “Buy Now, Pay Later” options reduce
checkout friction.

Government Initiatives & Policy Support:

Digital India and Startup India foster digital literacy and new ventures.
Production Linked Incentive (PLI) Textile Scheme (₹10,683 crore) incentivizes domestic
textile production, strengthening supply chains.
100 % FDI in B2B e-commerce and up to 50 % in B2C marketplaces under the automatic route.

Changing Consumer Behavior Post-COVID:

Lockdowns triggered a 70 % jump in online apparel sales, creating lasting “digital-first” habits.
Consumers now expect fast delivery, easy returns, and rich online experiences.

Rapid Urbanization & Rising Middle Class:

Urban households grew 13 % from 2011–2021; disposable incomes rose by 8 % CAGR,
boosting discretionary fashion spend.

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Tier II & III City Penetration:
E-commerce companies are expanding into smaller towns via localized logistics hubs, driving 15
% YoY growth outside metros.

Technological Innovations:
AR Virtual Try-Ons growing at 30 % CAGR, lowering fit-related returns by up to 15 %.
AI-powered personalization increases add-to-cart rates by 25 %.

Quick Commerce & Micro-Fulfilment:

Platforms like Zepto and Dunzo registered ₹2,500 crore GMV in 2024 for 10–20 min deliveries.
Appeals to instant-gratification segments and urban professionals.

Social Commerce & Influencer Marketing:

Over 30 % of Gen Z shoppers discover fashion through social media.
Live-stream shopping sessions drive real-time engagement and direct sales.

Diversification of Business Models:

Growth of D2C brands (Nykaa, Bewakoof) capturing niche audiences with owned channels.
Rental & resale platforms (Flyrobe, Poshmark) cater to value and sustainability seekers.

Omni-Channel Integration:
Blending online and offline—“click-and-collect,” virtual-in-store AR pods—enhances customer
convenience and trust.

Sustainability & Ethical Fashion:

Growing consumer demand for eco-friendly products; brands adopting biodegradable packaging
and circular models build stronger loyalty.

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Geographic & Demographic Spread

Urban vs Rural
Urban GMV: 75 % of total fashion spend
Rural Growth: Tier II/III cities growing at 15 % YoY, spurred by 5 G rollout and affordable
smartphones

State-Level Insights
Top Contributors: Maharashtra, Delhi-NCR, Karnataka, Tamil Nadu, and West Bengal
together account for 60 % of fashion GMV.
Emerging Markets: Gujarat, Rajasthan, and Punjab show double-digit growth in online apparel
orders.

Consumer Demographics

Generation Birth % of Fashion Characteristics

Years Spend
Gen Z 1997–2012 22 % Mobile-first, trend-driven, social-media
influenced
Millennials 1981–1996 45 % Value convenience, brand experiences,
sustainability
Gen X 1965–1980 25 % Quality-focused, omni-channel buyers
Boomers+ ≤1964 8% Price-sensitive, loyalty to trusted brands, less
returns

Gen Z & Millennials: 67 % of fashion spend, value convenience and trends. Discover via
Instagram, YouTube, and influencers. Seek fast delivery (quick commerce) and AR-powered
“try-ons.
Gen X & Boomers: 33 %, gravitate toward trusted brands and omni-channel experiences. Rely
on straightforward websites and clear return policies. High average order values (₹4,200), prefer
established labels.

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By segmenting by age, e-tailers can optimize product lines, marketing messages, and loyalty
programs to match each group’s preferences.

Category Breakdown
Category 2024 GMV Share Key Observations
Apparel & Footwear 60 % Athleisure and sustainable
lines fastest growing sub-
segments.
Accessories & Beauty 30 % Premium skincare and
artisanal jewelry gain
traction.
Home & Wellness 10 % Work-from-home furniture
and fitness gear in high
demand.

Technology & Payment Landscape

Payment Methods
UPI: 45 % of fashion transactions in 2024
COD: 20 %, down from 50 % in 2018
Digital Wallets: 15 %
Credit/Debit Cards: 20 %

Tech Enablers
AI/ML Personalization: Drives 25 % higher add-to-cart rates.
AR Virtual Try-On: A 30 % CAGR in adoption for eyewear and apparel.
Chatbots & Voice Assistants: Handling 40 % of basic query volumes.

Regulatory Environment
Key Policies
Consumer Protection (E-Commerce) Rules 2020: Mandates clear country-of-origin labels,
return windows, and seller transparency.

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FDI Guidelines: 100 % FDI in marketplace (B2B) and 50 % in B2C under conditions.
PLI Textile Scheme: ₹10,683 crore incentives for man-made fibre manufacturing.

Emerging Regulations
Data Protection Bill: May require local storage of consumer data, increasing compliance costs.
Environment (Plastic Waste) Regulation: Push for biodegradable packaging in e-tail.

Business Models in Fashion & Lifestyle E-Commerce:

India’s fashion e-commerce ecosystem features multiple models—each with distinct advantages,
challenges, and strategic considerations.

Types of E-Commerce
Within fashion and lifestyle, six main e-commerce models serve different needs:

Business-to-Consumer (B2C):
A retailer (Flipkart, Myntra) directly sells to individual shoppers.

Most common model, with wide assortments and fast delivery.

Business-to-Business (B2B):
Suppliers of fabrics, accessories, or wholesale distributors sell in bulk to brands or retailers.
Platforms like Udaan and IndiaMART facilitate these transactions.

Direct-to-Consumer (D2C):
Brands (Nykaa, Bewakoof) sell their own products through their websites or apps.
Helps control branding, pricing, and customer data.

8
Consumer-to-Consumer (C2C):
Individuals sell pre-owned or handcrafted items to other consumers via platforms like Elanic or
OLX.

Consumer-to-Business (C2B):
Influencers or designers offer services (styling, content) to fashion businesses.

Quick Commerce:
Ultra-fast delivery (10–20 minutes) of essentials and basic apparel via Dunzo, Zepto micro-hubs.

Each model plays a distinct role in the value chain and appeals to different segments of the
market.

Marketplace Model (B2C)

Overview
Platforms like Flipkart Fashion, Amazon Fashion, and Myntra list hundreds of thousands of
brands and sellers. They handle:

Discovery & Listing: Aggregating third-party catalogs.

Payment & Escrow: Holding buyer payments until confirmation.
Logistics & Fulfillment: Tied to network of warehouses and logistics partners.
Customer Service: Centralized support for returns, refunds, and queries.

Advantages:
Scale & Assortment: Millions of SKUs across apparel, accessories, home.
Trust & Convenience: Established brand trust, reliable delivery windows.

Challenges:

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Commission Pressures: Sellers pay 5 – 20 % per transaction.
Quality Control: Counterfeit or sub-standard items can erode trust.

Direct-to-Consumer (D2C)
Overview
Brands such as Gulabo Jaipur, The Souled Store, and Bewakoof operate their own e-stores
and apps, often supplemented by selective marketplace presence.

Advantages:
Margin Control: No marketplace commission.
Customer Data Ownership: Direct access to buyer behavior, enabling tailored marketing.

Challenges:
Customer Acquisition Cost (CAC): Higher marketing spend to build awareness.
Logistics Complexity: Must partner with third parties or build in-house.

Quick Commerce & Micro-Fulfilment

Overview
Startups Zepto, Dunzo, and Blinkit promise deliveries within 10–20 minutes of order
placement, using “dark” micro-warehouses stocked with curated essentials.

Use Cases
Urban Millennials & Gen Z: Last-minute wardrobe refreshes.
Office Professionals: Quick shoe replacements or accessories.

Challenges
Unit Economics: High delivery costs; requires premium pricing (~15 % surcharge).
Operational Complexity: Real-estate for dark stores, staffing, inventory management.

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Social Commerce & Live Stream Shopping
Overview
Instagram Commerce: Shoppable posts allow taps from discovery to checkout.
Live Shopping: Brands host real-time video sessions on Facebook and YouTube, with
integrated purchase links.

Advantages
Engagement: Interactive Q&A, instant feedback.
Trust via Influencers: Authentic product demos.

Challenges
Conversion Rates: Average 5 % vs 10 % on traditional apps.
Content Production: Requires frequent, high-quality live sessions.

Investment & Development:

India’s fashion and lifestyle e-commerce sector has attracted substantial capital and seen rapid
infrastructure growth:

Venture Funding Trends:

Peak Investment: In 2021, India’s broader e-commerce sector raised US $15 billion in private
equity and venture capital—5.4 times the 2020 level.
D2C Funding Dip: D2C fashion and beauty startups collected US $757 million in 2024, down
18 % from 2023 as investors grew cautious on high customer-acquisition costs.
Unicorn Emergence: Logistics player Xpressbees became a unicorn in early 2022 with a US
$1.2 billion valuation after a US $300 million Series F injection.

Strategic Acquisitions & Alliances:

Flipkart & Myntra: Flipkart’s 2014 acquisition of Myntra (and 2016 of Jabong) consolidated
its market leadership in fashion.
Cleartrip by Flipkart: In April 2021, Flipkart acquired online travel firm Cleartrip to diversify
its digital commerce offerings.

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Reliance Retail Ventures: Reliance has invested over ₹10,000 crore in building omnichannel
fashion retail, acquiring Urban Ladder (home décor) and partnering with global brands for
exclusive launches.

Infrastructure Expansion:
Dark Stores & Fulfilment Centers: Quick-commerce platforms like Zepto and Blinkit now
operate 300+ micro-warehouses in 25+ cities, enabling 10–20 min deliveries and ₹2,500 crore
GMV in 2024.
Tech Platforms: Companies such as Unicommerce and Shiprocket have raised significant
capital to offer end-to-end inventory, order management, and multi-carrier shipping solutions to
fashion e-tailers.

Government Initiatives:
The Indian government has rolled out multiple programs and policy reforms to nurture e-
commerce growth and strengthen domestic capabilities in fashion and textiles:

Digital India & Startup India:

Digital India (2015): Aims to expand broadband access, digital literacy, and online public
services—key enablers of e-commerce adoption in semi-urban and rural areas.
Startup India (2016): Simplified company registration and tax benefits for tech-driven
enterprises, boosting the number of fashion-tech startups.

Production Linked Incentive (PLI) Scheme for Textiles:

Outlay: ₹10,683 crore over five years (2021–26) for man-made fibres, technical textiles, and
garments.
Impact: Encourages local value addition, reduces import dependence, and creates an ecosystem
for “Make in India” fashion brands.

Government e-Marketplace (GeM) – Fashion Pavilion:

Scale: GeM’s Fashion Pavilion processed ₹4,200 crore worth of apparel orders in FY 2024-25,
sourcing garments and lifestyle products for government departments and PSUs.

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Participation: Over 4,000 suppliers of handloom, handicraft, and apparel goods onboarded,
promoting traditional textiles.

Open Network for Digital Commerce (ONDC):

Objective: Democratize e-commerce by setting open protocols for cataloguing, price discovery,
and logistics across participating platforms.
Progress: As of mid-2025, ONDC has on-boarded 700,000+ sellers and facilitated 200 million+
orders. Monthly retail orders have normalized at ~4.6 million after initial incentive-driven peaks.

Regulatory Reforms:
Consumer Protection (E-Commerce) Rules 2020: Mandate transparent display of country-of-
origin, detailed return policies, and a grievance redressal mechanism for online sellers.
Data Localization & Privacy: The proposed Personal Data Protection Bill may require on-shore
storage of consumer data, enhancing user privacy but adding compliance overhead for e-tailers.
FDI Policy: 100 % FDI in B2B e-commerce; 50 % in B2C marketplaces under automatic route
—designed to attract foreign investment while safeguarding domestic sellers.

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Literature Review

1. Market Size & Growth Projections

India’s overall e-commerce market has grown rapidly, with fashion & lifestyle being one of its
largest verticals. According to IAMAI-Kantar, total e-commerce GMV is projected to rise from
US $74.8 billion in 2022 to US $188 billion by 2025, nearly a 25 % annual growth rate. Mordor
Intelligence forecasts the fashion & lifestyle segment alone will expand from US $21 billion in
2024 to US $45 billion by 2028 (20 % CAGR). RedSeer Research highlights that over 190
million Indians shopped for fashion online in 2023, expected to reach 270 million by 2025.

2 Consumer Demographics & Behavior

Multiple studies show that younger generations dominate online fashion spend. Nielsen (2023)
reports Gen Z (born after 1997) and Millennials (born 1981–1996) together account for 67 % of
market value, drawn by fast trends, social media influence, and mobile convenience. Amazon
India data indicate an average apparel return rate of 24.4 %, driven primarily by size and fit
issues; brands using AI-based size guidance have cut those returns by up to 15 %. Meanwhile,
Bain & Company (2022) notes that 30 % of urban shoppers now expect delivery within 24 hours,
spurring the growth of quick commerce.

3 Technology Adoption & Innovation

AI and AR/VR are transforming online shopping experiences. A Forrester report (2024) projects
that AR “virtual try-on” tools will grow at 30 % CAGR through 2030, improving purchase
confidence and reducing returns by 10–15 %. Gartner (2023) finds that AI-driven personalization
engines can increase add-to-cart conversions by 25 % through tailored recommendations.
Startups like Avataar and Vue.ai have raised over US $50 million to integrate these features into
D2C and marketplace platforms. Deloitte’s 2022 TMT report forecasts that 80 % of new
smartphones sold by 2026 will be 5G-enabled, unlocking richer, low-latency AR/VR experiences
for Indian consumers.

4 E-Commerce Business Models

Fashion e-tail in India uses a mix of models:

 Marketplaces (B2C): Flipkart Fashion and Amazon Fashion remain dominant, together
capturing over 60 % of GMV. They provide deep assortments, reliable logistics, and
strong brand trust.

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  Direct-to-Consumer (D2C): Brands such as Nykaa and Bewakoof have grown rapidly,
focusing on niche positioning and data ownership. Bain (2023) notes D2C brands often
command 2–3× higher margins but incur higher marketing costs.
 Quick Commerce: Zepto and Blinkit reported ₹2,500 crore combined GMV in 2024 by
delivering essentials, including basic apparel, within 10–20 minutes.
 Social Commerce: Instagram and WhatsApp Shops drive discovery for 30 % of Gen
shoppers, with live-stream events converting at 5–7 % versus 2–3 % for static listings.
 Circular Models: Rental (Flyrobe) and resale (Poshmark) platforms are emerging,
tapping into eco-conscious and cost-sensitive segments. McKinsey (2022) estimates
circular fashion will form a US $20 billion opportunity by 2030.

5 Government Policies & Support

Government interventions have strengthened the sector:
 PLI Textile Scheme (2021): A ₹10,683 crore incentive for man-made fiber and
technical textiles has seeded domestic production, reducing input costs by 3–5 %.
 Digital India & Startup India (2015–16): Expanded digital literacy and eased
registration processes for online businesses.
 FDI Regulations: 100 % FDI allowed in B2B e-commerce; 50 % in marketplace models
under automatic route.
 Consumer Protection Rules (2020): Mandate clear country-of-origin labels, transparent
returns, and grievance mechanisms, boosting shopper confidence.
 ONDC Pilot (2022): Onboarded 700,000+ sellers and 200 million+ orders, aiming to
democratize discovery across platforms.

6 Sustainability & Ethical Practices

Environmental concerns shape future growth. WWF-India (2023) shows 75 % of young shoppers
prefer brands with sustainable packaging, prompting flipkart and Amazon India to pilot
compostable pouches and bulk-return programs. The Apparel Made-ups & Home Furnishing SC
has trained 50,000+ artisans on eco-friendly practices, boosting sales of handloom products via
GeM’s Fashion Pavilion (₹4,200 crore in FY 24).

7 Research Gaps
While existing literature addresses market size, consumer segments, and technology trends, there
is limited work on:

 Rural Market Dynamics: Few studies quantify rural fashion e-commerce potential and
unique buying patterns.

15
 ONDC’s Impact on Micro-Sellers: Early data on how open networks affect small
artisans and private labels is scarce.
 Integrated Omni-Channel Strategies: Research on best practices for blending quick
commerce, social commerce, and brick-and-mortar remains nascent.

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Methodology

1. Objective of the Study

The primary objectives of this research on “E-Commerce in India: Fashion and Lifestyle
Industry” are:

 Measure Market Scale & Growth

 Quantify current market size, GMV, and growth rates for fashion and lifestyle e-
commerce.
 Forecast segment growth to 2025 and 2028 using historical data and industry
projections.

 Analyze Industry Structure

 Apply PESTEL analysis to understand macro-environmental factors shaping the sector.
 Use Porter’s Five Forces to assess competitive intensity and profit potential.
 Conduct a SWOT analysis to identify internal strengths/weaknesses and external
opportunities/threats.

 Understand Consumer Behavior

 Segment online fashion shoppers by age, location, and spending patterns.
 Map the customer journey using the AIDA model, PESO media mix, and the Growth
Marketing Funnel (AARRR).

 Evaluate Business Models & Operations

 Compare marketplace (B2C), direct-to-consumer (D2C), quick commerce, and social
commerce models.
 Examine logistics, returns management, and technology enablers (AI, AR/VR).

 Assess Government & Policy Impact

 Review key government initiatives—PLI Textile Scheme, Digital India, FDI rules—
and their effects on e-tail.
 Analyze regulatory requirements for consumer protection and data privacy.

 Identify Strategic Opportunities & Challenges

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  Highlight areas for improvement in customer experience, sustainability, and market
expansion (rural, tier II/III).
 Propose actionable recommendations to enhance competitiveness and drive sustainable
growth.

2. Research Design
A descriptive and analytical approach was chosen to:
 Measure market size and growth trends
 Examine industry structure using established frameworks
 Map customer behavior and technology adoption
 Assess policy impacts and strategic implications

3. Secondary Data Collection

All insights are drawn from credible published sources:

 Industry Reports
 IAMAI-Kantar, RedSeer, Bain & Company, Mordor Intelligence, Statista, and BCG
reports on Indian e-commerce and fashion segments.

 Government and Institutional Sources

 Ministry of Commerce & Industry (FDI policy, DPIIT reports)
 TRAI (Telecom statistics and internet penetration)
 MeitY and ONDC portal (Digital commerce initiatives)
 GeM & PLI Textile Scheme documentation

 Published News Articles & Journals

 Business Standard, The Economic Times, LiveMint, and Financial Express for recent
developments and expert commentary.
 Academic publications and case studies on e-commerce models and digital consumer
behavior in India.

Data Analysis Tools

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 PESTEL, Porter’s Five Forces, SWOT Frameworks
Structured templates to evaluate external environment, industry dynamics, and internal
strengths/weaknesses.

 Statistical Analysis (Excel/SPSS)

Descriptive Statistics: Tabulation of GMV, user counts, and growth rates.
Trend Analysis: Compound Annual Growth Rate (CAGR) calculations for forecasting to
2025 and 2028.

 Thematic Content Analysis

Reviewing report narratives and news articles to identify recurring themes in technology,
logistics, and policy.

4. Data Validation
 Only recent data (2020–2025) was included to ensure relevance and accuracy.
 Each data point was cross-verified from multiple sources—e.g., comparing government
reports with industry studies.
 Figures were interpreted within the scope of the Indian fashion and lifestyle e-commerce
industry and not generalized to unrelated sectors.

5. Limitations of the Study

Although the study is robust in secondary data interpretation, it has certain limitations:

 No Primary Data: All findings are based on publicly available secondary data; no field
surveys or interviews were conducted.
 Dynamic Industry: E-commerce is a fast-changing domain. Policy updates, funding
rounds, or market shifts post-2025 may affect some conclusions.
 Limited Micro-Level Insight: The study does not focus on company-specific operational
data due to access limitations.
 Dependence on Source Accuracy: Analysis assumes the reliability and authenticity of
published data and institutional reports.

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SWOT Analysis: India’s Fashion & Lifestyle E-Commerce

Strengths
1. Massive Digital Audience
 830 million internet users (52.4 % penetration) and 1.12 billion mobile connections in
mid-2025.
 62 % of fashion site visits come from mobile devices.

2. Robust Market Growth

 Fashion & lifestyle GMV climbed from US $14 billion in 2020 to US $21 billion in
2024, with US $25 billion forecast for 2025 (20 % CAGR) .

3. Diverse, Flexible Models

 Leading marketplaces (Flipkart, Myntra), agile D2C brands (Bewakoof, The Souled
Store), and hyper-local quick-commerce (Zepto, Blinkit) all co-exist.
 Platforms like Instagram Shops and WhatsApp Business empower small artisans to
sell directly.

4. Government Backing
 PLI Textile Scheme worth ₹10,683 crore boosts local yarn & fabric production.
 100 % FDI in B2B e-commerce and 50 % in marketplace models under automatic
route.

5. Tech-Enabled Experiences
 AI personalization lifts add-to-cart rates by 25 %; AR “virtual try-ons” reduce fit-
related returns by up to 15 %.

Weaknesses
1. High Return Rate
 Apparel return rate is 24.4 %, versus global average ~15 %, adding logistics cost and
inventory handling.

2. Fragmented Logistics

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  Delivery times in Tier II/III towns can stretch to 7–10 days, impacting shopper
satisfaction.
 Reverse-logistics networks for returns are under-developed outside metros.

3. Sizing Inconsistency
 Lack of standard size charts across brands causes fit uncertainty and drives returns.

4. Rising Customer-Acquisition Costs

 Digital ad costs have increased by 35 % year-over-year as brands compete for
attention, squeezing margins.

5. Regulatory Complexity
 Ongoing data-localization requirements and Consumer Protection Rules demand
continuous compliance investment.

Opportunities
1. Untapped Rural & Smaller Town Markets
 15 % year-on-year growth in online fashion sales from non-metro areas; broadband
expansion via BharatNet Phase II opens new customer pools.

2. Circular & Sustainable Fashion

 75 % of young consumers willing to pay more for eco-friendly products; rental
platforms like Flyrobe and resale apps like Poshmark tap this demand.

3. Immersive & Virtual Commerce

 Metaverse pilot showrooms attracted 3,000+ virtual visitors/month, signaling
consumer appetite for novel experiences.

4. Omni-Channel Integration
 “Click-and-collect” and in-store AR kiosks reduce returns by 10 % and drive footfall
into physical outlets.

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 5. Advanced Data & Analytics
 Predictive analytics for demand forecasting can cut stock-outs by 20 %, boosting
sales and lowering markdown losses.

Threats
1. Intense Competition & Price Pressure
 Flipkart, Amazon, Reliance, and many nimble D2Cs engage in deep discounts,
eroding average selling prices.

2. Supply-Chain Disruptions
 Global cotton shortages and import-duty hikes (20 % on select fabrics) can spike
sourcing costs by 3–5 % .

3. Cybersecurity & Fraud Risks

 30 % of breaches reported in retail sector affect customer trust; stringent data-
protection laws carry fines up to ₹15 crore.

4. Macroeconomic Volatility
 Slower GDP growth or high inflation may curb discretionary spending on fashion and
lifestyle goods.

5. Regulatory Shifts
 Sudden changes in FDI norms or environmental mandates (single-use plastic bans)
can disrupt business models.

Strategic Implications
1. Reduce Returns:
Standardize sizing across partner brands; expand AI-driven fit tools; introduce “try-
before-you-buy” subscription boxes to lower the 24 % return bucket.

2. Strengthen Logistics:

22
 Build micro-fulfilment hubs in Tier II/III towns; partner with local courier networks to
improve 48-hour delivery to 80 % of pin codes.

3. Optimize CAC:
Shift toward community marketing and loyalty programs (e.g., “Write a Review, Earn
Rewards”) to lower digital ad dependence.

4. Differentiate with Experience:

Expand AR/VR showrooms and metaverse pop-ups to engage tech-savvy Gen Z and
drive higher AOV (Average Order Value).

5. Sustainability as a Differentiator:
Scale biodegradable packaging pilots; launch “Green Collections” with transparent
carbon-footprint labeling to appeal to eco-conscious shoppers.

6. Agile Regulatory Compliance:

Invest in modular IT systems that can adapt to new data-localization or consumer-
protection rules with minimal downtime.

By aligning strengths with opportunities and proactively addressing weaknesses and threats,
India’s fashion and lifestyle e-commerce players can secure resilient, profitable growth in a fast-
evolving market.

PESTEL Analysis: India’s Fashion & Lifestyle E-Commerce

23
1. Political
 Digital India & Startup India initiatives have expanded broadband reach and simplified
business registrations, enabling e-tailers to onboard quickly and gain trust in smaller
towns.
 Production Linked Incentive (PLI) Scheme for Textiles (₹10,683 crore) encourages local
yarn and fabric manufacturing, reducing import dependence and securing supply chains
for fashion brands.
 Foreign Direct Investment (FDI) Rules allow 100 % FDI in B2B e-commerce and up to
50 % in B2C marketplaces (with certain conditions), attracting global platforms to
expand in India.

Implications:
 Partner with domestic textile units to leverage PLI benefits and ensure raw-material
security.
 Monitor FDI policy updates to explore strategic foreign partnerships or investments.
 Explore B2B exports via Udaan’s network.

2. Economic
 GDP Growth is forecast at 6.5 % in FY25, supporting higher consumer spending on
discretionary categories like fashion.
 E-Commerce GMV is expected to surge from US $74.8 billion (2022) to US $188 billion
by 2025, with fashion & lifestyle accounting for US $25 billion of that total.
 Mobile & Internet Penetration: 52.4 % internet reach and 1.12 billion mobile connections
underpin strong digital demand.

Implications:
 Adjust pricing and product assortments to match rising incomes in urban and emerging
towns.
 Invest in mobile-first UX and payment integrations to capture the majority of mobile
shoppers.
 Launch mid-premium lines to capture growing wallet share.
 Negotiate better credit terms with logistics as volumes rise.

3. Social
24
  Changing Lifestyles: Post-COVID, 70 % jump in online apparel sales signaled enduring
“digital-first” shopping habits.
 Demographics: Gen Z and Millennials drive 67 % of fashion spend; they value trends,
quick delivery, and social proof.
 Return Culture: Apparel returns run at 24.4 %, driven by fit and style uncertainties,
impacting profitability.

Implications:
 Launch live-stream styling sessions and user-generated lookbooks to reduce fit-related
returns.
 Tailor loyalty programs and communication to the distinct tastes of each generational
cohort.
 Roll out AR try-on (like Lenskart) for apparel to lower fit-driven returns.
 Run style challenges on social media to engage youth.

4. Technological
 5G Rollout: Deployment of 469,000 5G base stations by 2025 will enable high-quality
AR/VR applications for virtual try-ons and live-stream shopping.
 AI & Personalization: AI-driven recommendation engines boost add-to-cart rates by 25
%; virtual fitting rooms cut returns by up to 15 %.
 Quick Commerce Platforms: Zepto and Dunzo’s micro-fulfilment model generated
₹2,500 crore GMV in 2024, delivering essentials in 10–20 minutes.

Implications:
 Prioritize mobile app enhancements with AR-powered try-on features to drive
engagement.
 Pilot quick commerce in high-density urban areas to capture impulse purchases.
 Invest in 5G-enabled live commerce for new product launches.
 Integrate AI-driven lookbooks to boost add-to-cart conversions.

5. Environmental
 Packaging Waste: E-commerce packaging contributes significantly to plastic waste;
WWF-Flipkart pilots biodegradable pouches aim for 30 % reduction in single-use plastics
by 2026.

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  Circular Fashion: Resale (Poshmark) and rental (Flyrobe) platforms cater to eco-
conscious consumers; 75 % of Gen Z willing to pay more for sustainable products.

Implications:
 Introduce eco-friendly return packaging and incentivize customers to reuse or recycle
materials.
 Partner with circular-economy startups to integrate resale channels into your platform.
 Offer customers eco-pack options at checkout like FabAlley.
 Partner with Flyrobe for a “rent instead of buy” pilot line.

6. Legal
 Consumer Protection (E-Commerce) Rules 2020: Require clear country-of-origin
labeling, transparent return policies, and timely grievance redressal.
 Data Privacy Regulations: Emerging Personal Data Protection Bill mandates secure
storage and processing of user data, potentially increasing IT compliance costs.

Implications:
 Ensure platform compliance with labeling and returns regulations to maintain trust and
avoid fines.
 Invest in robust data-protection measures and transparent privacy policies to safeguard
customer information.
 Ensure all product listings comply with origin-label rules.
 Audit data flows and hosting to meet local storage mandates.

Overall Strategic Implications:

 Leverage Policy Support & Local Sourcing: Use PLI incentives and FDI ease to
strengthen manufacturing partnerships.
 Optimize for Mobile & Speed: Enhance mobile UX and quick-commerce capabilities for
Gen Z convenience.
 Embrace Sustainability: Adopt eco-packaging and circular models to win over
environmentally conscious buyers.
 Maintain Compliance & Trust: Stay ahead of legal requirements to preserve brand
credibility and mitigate regulatory risk.

26
Porter’s Five Forces Analysis

1. Threat of New Entrants: Moderate

 Low Technological Barrier

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  SaaS platforms (e.g., Shopify, Shopmatic) let entrepreneurs launch online fashion stores
for under ₹50,000.
 Example: A local boutique in Jaipur used Shopify to begin selling handcrafted scarves
nationally within days.

 High Brand & Trust Barrier

 Consumers rely on established names (Flipkart, Myntra) for reliable delivery and genuine
products.
 Building trust takes significant marketing spend and consistent service quality.

 Scale Economies
 Major players negotiate deep discounts with suppliers and logistics firms to maintain low
prices.
 Example: Flipkart’s annual Big Billion Days sale offers 50 %+ off, powered by bulk
purchasing.

Strategic Takeaway:
New entrants should focus on niche segments (e.g., plus-size activewear) or hyper-local artisanal
collections, where large platforms lack specialization and trust can be built more quickly.

2. Bargaining Power of Suppliers: Moderate to High

 Key Raw Materials

 Large textile mills (Arvind, Raymond) supply denim and shirting fabrics. Few
alternatives at scale.
 Price fluctuations in cotton (global cotton prices rose 30 % in 2022) directly impact
garment margins.

 Niche & Artisanal Vendors

 Handloom weavers in West Bengal or Madhya Pradesh offer unique designs but have
limited production capacity.
 Example: FabIndia partners with rural artisans to offer exclusive ethnic wear lines at
premium prices.

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 Backward Integration by Large Retailers
 Reliance Retail has acquired spinning and weaving units to control costs and quality.

Strategic Takeaway:
E-tailers should diversify supplier portfolios—combining large-scale mills for basics and small
artisan clusters for unique lines—and explore long-term contracts to stabilize costs.

3. Bargaining Power of Buyers: High

 Price Sensitivity & Low Switching Cost

 Shoppers compare prices across apps; waiting for “Flash Sales” or coupon codes is
common.
 Data Point: 65 % of buyers check at least three platforms before purchasing apparel.

 Access to Information
 Customer reviews, unboxing videos, and social-media feedback are readily available.
 Negative reviews on sizing or quality can quickly deter thousands of potential buyers.

 Loyalty Programs & Personalization

 Effective loyalty schemes can reduce buyer power by increasing perceived value.
 Example: Myntra Insider members get early sale access, free alterations, and extra
discount coupons.

Strategic Takeaway:
Brands must offer differentiated value—such as styling advice, virtual fittings, and membership
perks—to build emotional loyalty beyond price competitiveness.

4. Threat of Substitutes: Strong

 Offline Retail
 Physical stores (Reliance Trends, Shoppers Stop) remain convenient for trying on
garments immediately.

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  In 2023, ~30 % of consumers preferred in-store purchases for formal wear and high-value
items.

 Rental & Resale Markets

 Platforms like Flyrobe (rentals) and Poshmark (pre-owned sales) provide alternatives to
new-buy for budget or eco-conscious shoppers.
 Growth: Flyrobe saw a 120 % increase in monthly rentals of special-occasion outfits in
2024.

 International Fast-Fashion Imports

 Cheap imports from Bangladesh, Vietnam compete on price for basic items, sometimes
bypassing e-commerce channels.

Strategic Takeaway:
E-tailers should integrate circular-fashion options (resale, rental) and highlight exclusive
collections unavailable offline to mitigate substitution risk.

5. Industry Rivalry: Very High

 Large-Scale Players
 Flipkart and Amazon together control over 60 % of fashion e-tail market share. Reliance
Retail and new entrants like Ajio add to rivalry.

 D2C Brand Explosion

 Hundreds of D2C fashion startups (e.g., Bewakoof, W, Chumbak) target specific niches,
backed by social-media marketing.
 Many raise US $10–20 million Series A rounds to scale customer-acquisition and brand
building.

 Frequent Sales & Promotions

 Daily flash sales, festival events (Diwali, Eid) see discounts of 50–70 %, training
customers to wait rather than buy at full price.

 Innovation & Service Differentiation

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  Quick-commerce entrants (Zepto’s Fashion Now) deliver basic apparel in 15 minutes,
creating new fronts of competition.

Strategic Takeaway:
To stand out, players need clear brand positioning (e.g., sustainable luxury, tech-enabled
customization), exceptional customer service (easy returns, 24×7 chat support), and innovative
delivery (same-day or micro-fulfilment) to reduce head-to-head price battles.

Overall Conclusion:
India’s fashion and lifestyle e-commerce faces intense rivalry and savvy buyers but also benefits
from vast digital reach and supportive policies. By targeting underserved niches, strengthening
supplier partnerships, innovating in delivery, and fostering genuine customer loyalty, companies
can navigate these competitive forces for sustainable growth.

Top Companies in India’s Fashion & Lifestyle E-Commerce Industry

(2025)

1. Myntra (A Flipkart Group Company)

 Specialization: Fashion, footwear, beauty, and lifestyle.

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  Strengths: Exclusive brand partnerships (e.g., Mango, H&M), Myntra Insider loyalty
program, AR virtual try-on, influencer-led Myntra Studio.
 Revenue (FY24): ₹4,375 crore (~US $525 million), up 25 % YoY.
 User Base: ~75 million users, with ~6 million monthly active shoppers.
 Highlight: Became EBITDA-positive; strong presence in premium and beauty segments,
further growth via Myntra Studio and AI features
 Market Position: Among the largest online fashion platforms in India.

2. Ajio (Reliance Retail Ventures Ltd.)

 Specialization: Trendy apparel, footwear, accessories, and ethnic wear.

 Strengths: Strong private label portfolio, integration with Reliance Trends stores, wide
regional appeal.
 Innovation: "Ajio Luxe" for premium international brands.
 Current Figures: While exact GMV is undisclosed, Ajio holds ~15–18 % share of
India’s online fashion market, with strong private-label growth and offline integration.
 Feature: Known for ethnic fusion wear and regional reach; part of India's fastest-
growing retail conglomerate.

3. Amazon Fashion India

 Specialization: Multi-category fashion marketplace for all genders and age groups.
 Strengths: Huge seller base, wide size availability, Try Before You Buy in select cities.
 Focus: Tier II/III penetration and Prime-exclusive fashion deals.
 Market Position: Part of India’s ~US $147 billion e-commerce market (2024), Amazon
commands over 30 % of the fashion vertical.
 USP: Extensive brand variety, Try-Before-You-Buy pilot in select cities.

4. Flipkart Fashion

 Specialization: Mass-market apparel, accessories, and casual fashion.

 Strengths: Big Billion Day event sales, affordable private brands, Flipkart Originals.
 Technology: AI-led recommendation system for styling.
 GMV Share: Alongside Myntra, accounts for nearly 60 % of India’s fashion e-
commerce GMV.

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  Initiatives: AI-based styling tools and Flipkart Originals private labels help differentiate.

5. Nykaa Fashion

 Specialization: Women's fashion, beauty, accessories, footwear.

 Strengths: D2C model, premium brands, seamless integration with Nykaa Beauty.
 Differentiator: Focus on quality curation and influencer-driven marketing.
 GMV (2024): Fashion GMV ₹4,528 crore (~US $550 million) in Q3 FY25; full-year
GMV shows ~27 % YoY growth.
 Brand Mix: Over 3,200 brands, with a 20 % share in India’s online premium women’s
fashion segment.
 Profitability: EBITDA margin improving; beauty segment remains core, but fashion is
scaling rapidly.

6. Tata CLiQ

 Specialization: Premium fashion and lifestyle goods (e.g., apparel, electronics, watches).
 Strengths: Omnichannel model with access to Tata’s offline store network (Westside,
Landmark).
 USP: Authentic branded products with luxury appeal.

 Positioning: Serves the premium and luxury fashion segment with omnichannel access
through Tata’s retail network.
 Growth Insight: Partnered with high-end labels and provides curated experiences,
though specific GMV is not published.

7. Bewakoof.com

 Specialization: Quirky youth-centric fashion, printed tees, joggers, and hoodies.

 Scale: Not formally disclosed, but recognized as a ₹100+ crore brand by 2024.
 Strengths: Strong D2C presence, collaborations with Marvel, Disney, and anime IPs.
strong youth appeal, and quick stock-to-market cycle.
 Model: Affordable pricing, high repeat customers among college students.

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8. The Souled Store

 Specialization: Pop culture merchandise, casualwear, and licensed apparel.

 GMV Estimate: Estimated ₹100+ crore in FY25.
 Niche: Pop-culture inspired apparel licensing (Marvel, anime); strong engagement with
Gen Z shoppers.
 Strengths: Fanbase from cricket, anime, and superhero merchandise.
 Notable Growth: Achieved ₹100+ crore revenue in FY 2024–25.

9. Meesho

 Specialization: Affordable, unbranded fashion via social commerce.

 Strengths: Strong Tier II/III presence, 0 % commission for sellers, easy WhatsApp
sharing.
 GMV (2022): ~US $5 billion, with fashion comprising a significant share
 Business Model: Social commerce platform with 120 million monthly users and 9
million monthly orders, empowering micro-sellers, C2C-led e-commerce.

10. Urbanic

 Specialization: Trendy, fast-fashion apparel for young women.

 Market Position: Fast-fashion brand valued at over US $150 million.
 USP: App-based quick-fashion styles catering to post-Shein demand in India.
 Strengths: App-based interface, influencer appeal, imported SKUs with fast local
delivery.
 Niche: Competes directly with Shein’s customer base post its India exit.

11. Shoppers Stop Ltd.

 Overall Revenue (FY24): ₹4,752 crore, up 5.8 % YoY.

 E-Commerce GMV (FY24): ₹380 crore (~8 % of total sales), marking a 42 % growth
over FY23 as online penetration deepened.
 Shopper Stop App: Integrated styling services and AR “virtual mirror,” driving a 30 %
higher conversion rate versus desktop.

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  Café In-Store Click-&-Collect: 25 stores offer online ordering with same-day pick-up,
boosting omnichannel sales by 15 %.
 Market Position: Leader in premium multi-brand retail, catering to metro and Tier I
shoppers with brands like AND, Façonnable, and MAC.

12. Westside (Trent Ltd.)

 Parent Revenue (Trent Ltd. FY24): ₹5,186 crore across all retail formats, up 7 %
YoY .
 Westside E-Commerce GMV (FY24): ~₹310 crore, accounting for 6 % of Westside’s
total apparel & lifestyle turnover, with 50 % YoY growth as digital channels expanded .
 Westside Online: Offers exclusive product drops and “end-of-season” sale previews for
loyalty members.
 Franchise-to-E-Tail: Partnerships with major online marketplaces to extend reach into
Tier II/III regions.
 Brand Mix: Known for smart casual and formal wear under private labels like People,
Zudio, and Jana.

Consumer Journey & Experience Mapping

13.1 Ajio

35
AIDA
Stage Activities & Metrics Recent Insights & Challenges
Attention - TV & digital ad campaigns Opportunity: Leverage AI ads to drive
(“The Great Fashion Price awareness cost-effectively
Crash”). Challenge: Navigating geo-sensitivities
- Instagram growth: +2.6 M (Turkish brand boycott) without losing
followers (Mar 24–25) market share.
- Boycott calls led to delisting
Turkish brands
Interest - “AJIO LIVE” shoppable Opportunity: Expand livestream shopping to
livestreams. Tier II/III towns.
- Exclusive “Ajio Luxe” premium Data Point: Shoppable streams see 15 %
capsule. higher engagement than static pages (industry
average).
Desire - “Try & Buy” free returns (6 Challenge: Fit returns cost ~ 18 % of apparel
metros). GMV; Ajio piloting 360° videos to reduce
- AI-driven style this by 12 %.
recommendations.
Action - Simplified checkout; 1-click Metric: Overall site conversion ~ 4 %
Paytm & EMIs. post-sale
- Flat-₹99 vouchers for new Challenge: Cart abandonment at 68 %;
users. working on one-page checkout to lift by 6 %.
- Flash-sale conversion: ~ 5 %.

AARRR Funnel

Stage Metric/Activity News & Figures

Acquisition – Cost per acquisition Trend: 17.5 % YoY growth in India’s retail
(CPA): ~ ₹350 e-commerce to reach US $137 bn in 2025 Ajio
– Channels: in-store QR, poised to capture Tier II share as internet reaches
affiliate, social commerce. 900 M users by 2025.
Activation – Activation (first browse Insight: Mobile app sessions average 7 min (vs.
≥3 min): 48 % within 5 min desktop), underlining importance of
24 hrs. mobile-first optimizations.
Retention – “Ajio Insiders” repeat Challenge: Flat demand in lifestyle; Republic Day
rate (90-day): 32 %. sales saw no growth—full recovery expected
H2 2025.
Referral – “Give ₹150, Get ₹150”: Opportunity: Amplify social-commerce tie-ups
5 % of new sign-ups via (Meesho) to boost referral by 3 ppt.
referrals.
Revenue – ARPU: ₹1,800 per Data: India’s online fashion GMV at US $21 bn in
user/year. 2024, projected US $25 bn by 2026.

36
 – Fashion GMV growth:
18 % YoY.

13.2 Nykaa Fashion

AIDA Breakdown
Stage Activities & Metrics News & Challenges
Attention – YouTube tutorials & Opportunity: In-store omnichannel events
Instagram reels (60 M (“Retail as Stage”) boost digital-offline synergy
monthly uniques). Challenge: Quick commerce not core for beauty;
– Physical expansion: +50 Nykaa Now pilot yields 30 % growth in personal
stores in FY 25 care, but only 5 % in fashion
Interest – AI “Style Boards,” curated Trend: Beauty GMV up 25 % to ₹18,950 cr;
brand boutiques. fashion GMV up 12 % (FY 25)
– 20 % of visitors engage
quizzes or personalized
feeds.
Desire – Virtual try-on for ethnic Challenge: High customer return rate (~ 22 %) on
wear. makeup & apparel; pilot AR fitting rooms to cut
– “Complete the Look” by 15 %.
cross-sell +10 % items/cart.
Action – 1-click checkout; loyalty Metric: Q4 FY25 e-commerce fashion conversion
points back; AMEX ~ 6 % post improvements
cashback.
– Conversion: 6 %.

AARRR Funnel
Stage Metric/Activity News & Figures
Acquisition – CPA: ~ ₹300 Data: Nykaa FY 25 revenue ₹7,950 cr
(cross-category). (+24 %), EBITDA ₹474 cr (+37 %). ARPU:
– Channels: email (15 M subs), ₹2,450.
beauty-fashion cross-promos.
Activation – First purchase in 7 days: Trend: Quick commerce not core; 80 % of
55 % sign-ups. beauty GMV remains via standard 48 hr
delivery.
Retention – “Nykaa Rewards” repeat Opportunity: Upsell premium subscription
buyers (6 mo): 40 %. (Nykaa Prime) for recurring revenue—
projected +8 % retention uplift.
Referral – “Invite & Earn” ₹200 Challenge: Social commerce share low;
voucher: 8 % new users. integrate Meesho-style micro-seller channels
to boost referrals by 5 ppt.
Revenue – ARPU: ₹2,450/year. Data: Beauty GMV ₹13,545 cr (+25 %);

37
 – Fashion GMV growth: fashion GMV ₹1,610 cr (+18 % Q4 FY25).
+27 % in FY 25.

13.3 Shoppers Stop

AIDA Breakdown
Stage Activities & Metrics News & Challenges
Attention – Mall events & “Lounge by Challenge: Q2 FY24 net loss ₹20.6 cr; slow
Shoppers” launches. footfalls despite 7.3 % revenue growth,
– Digital cinema ads and signaling in-store demand weakness
influencer store tours (12 M
monthly site visits).
Interest – “Style Salon” virtual chat (15 % Opportunity: Physical experiences as
CTR); SMS/push alerts. “stages”—live styling events to rekindle
in-store magic
Desire – 360° product videos; “Reserve & Metric: Store pickup adoption at 12 %.
Collect” (9 % uplift in store visits).
Action – Omni checkout, SmartBuy EMI, Trend: Q4 FY25 profit down 91 % despite
gift wrapping (5 % ecommerce 7 % revenue rise to ₹1,124.6 cr
conv.; 12 % pickup conv.).

AARRR Funnel
Stage Metric/Activity News & Figures
Acquisition – CPA: ~ ₹400 via Challenge: High CoL in urban centers curbs
credit-card tie-ups & TV discretionary spend; recovery likely H2 2025
spots.
Activation – First purchase or store Opportunity: Incentivize app download with
pickup: 43 % within exclusive in-store AR trials—pilot saw +5 ppt
30 days of sign-up. activation.
Retention – “First Citizen” Data: Premium segment shows resilience;
repurchase (6 mo): 35 %. premium leather and accessory verticals +10 %
despite overall softness.
Referral – “Bring a Friend” 5 % Opportunity: Expand referral holidays (Diwali,
voucher: 6 % of sales. Eid) to spike by 3 ppt.
Revenue – ARPU: ₹3,000 per Data: Omni-channel sales now 30 % of total;
loyalty member/year. digital’s share rose from 15 % to 22 % in FY 25,
– Overall fashion retail highlighting e-commerce’s growing role in a
growth: +14 % YoY. departmental-store chain.

Overall Takeaways:

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  Ajio: Must manage geo-political risks (brand boycotts) while scaling AI-driven ads and
livestream commerce.
 Nykaa: Balances strong beauty demand with cautious quick-commerce entry;
opportunities lie in physical-digital synergies and enhanced referrals.
 Shoppers Stop: Needs to revitalize in-store experiences and push omni-channel offerings
to overcome weak discretionary spend, leveraging digital events to drive footfalls.

Financial Ratio Analysis for Leading Players

Importance of Financial Ratios:

39
Financial ratios illuminate a company’s health and performance in key areas. In the context of
India’s fashion & lifestyle e-commerce industry, each ratio category provides insights that
inform strategic decision-making:

1. Profitability Ratios

Net Profit Margin (Net Profit ÷ Revenue)

Why it matters: Indicates how much profit remains after all expenses. In fashion e-tail, high
discounts and return costs can erode margins—tracking this ratio shows whether scale and
pricing strategies translate into real earnings.

Return on Equity (ROE) (Net Profit ÷ Equity)

Why it matters: Measures return for shareholders. For e-commerce investors backing brands
like Nykaa or Bewakoof, ROE highlights how effectively equity funding creates profit.

Return on Capital Employed (ROCE) (EBIT ÷ Capital Employed)

Why it matters: Assesses how well operating profits cover both debt and equity financing. A
solid ROCE signals efficient use of warehouse, technology, and marketing investments.

2. Liquidity Ratios

Current Ratio (Current Assets ÷ Current Liabilities)

Why it matters: Gauges short-term solvency. E-commerce companies must cover payables
(suppliers, logistics) with receivables and cash. A ratio above 1.2× typically ensures smooth
operations during seasonal peaks.

Quick Ratio ((Current Assets – Inventory) ÷ Current Liabilities)

Why it matters: Focuses on truly liquid assets. Since inventory can be slow-moving, the quick
ratio reveals if a business can meet obligations without relying on slow sell-through.

3. Solvency Ratios

40
Debt-to-Equity Ratio (Total Debt ÷ Equity)
Why it matters: Reflects financial leverage. E-tailers often borrow to fund technology,
marketing, or dark-store expansions. A moderate ratio (< 0.5×) signals balanced risk.

Interest Coverage Ratio (EBIT ÷ Interest Expense)

Why it matters: Shows the ability to service debt. A high coverage ratio (> 5×) suggests enough
operating profit to absorb borrowing costs, critical when margins tighten.

4. Efficiency Ratios

Inventory Turnover (COGS ÷ Average Inventory)

Why it matters: Measures how quickly stock sells. Fast turnover (4–7×) minimizes holding
costs and markdowns—a must in fashion, where trends shift rapidly.

Asset Turnover (Revenue ÷ Total Assets)

Why it matters: Indicates how effectively assets (warehouses, technology, capital) generate
sales. Higher turnover (> 1.2×) signals strong utilization of infrastructure and technology
platforms.

5. Capital Structure Ratios

Proprietary Ratio (Equity ÷ Total Assets)

Why it matters: Highlights the share of assets financed by owners. A higher ratio (> 0.6×)
reduces reliance on external funding and improves resilience during market downturns.

Strategic Applications:
 Benchmarking: Compare ratios across peers (Nykaa vs. Trent vs. Shoppers Stop) to
identify best-in-class practices.

41
  Trend Analysis: Examine year-on-year ratio movement to assess the impact of strategic
initiatives—such as AR investment on asset turnover or quick-commerce on inventory
turnover.
 Risk Assessment: Use solvency and liquidity ratios to gauge each company’s buffer
against market shocks (e.g., tariff changes, supply-chain disruptions).
 Investment Decisions: Profitability and ROCE guide where capital deployment (new
dark stores or technology) yields the highest returns in the fast-evolving e-tail landscape.

Ratio Analysis:

1. FSN E-Commerce Ventures Ltd. (Nykaa Fashion)

Category Ratio Value

Profitability Net Profit Margin – 0.5 %
Return on Equity (ROE) – 2.3 %
Return on Capital Employed 6.5 %
Liquidity Current Ratio 1.82×
Quick Ratio 1.45×
Solvency Debt / Equity Ratio 0.08×
Interest Coverage Ratio (EBIT/Interest 8.2×¹
Expense)
Efficiency Asset Turnover 1.5×
Inventory Turnover 4.2×
Capital Structure Proprietary Ratio (Equity / Total Assets) 0.72ײ

Key Takeaways:

 Strong Liquidity, Low Leverage: With a current ratio of 1.82× and debt-to-equity of
just 0.08×, Nykaa Fashion is well-positioned to meet short-term obligations while
maintaining minimal borrowing.
 Modest Profitability: Negative net margin (–0.5 %) and ROE (–2.3 %) reflect ongoing
investments in growth and technology, though improving EBITDA margins (5.8 %)
signal operational progress.
 Efficient Working Capital: An inventory turnover of 4.2× demonstrates effective stock
management, supporting faster sell-through in a fashion-driven market.

2. Reliance Industries Ltd. (Reliance Retail Parent)

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 Category Ratio Value
Profitability Net Profit Margin 8.1 %
Return on Equity (ROE) 6.2 %
Return on Capital Employed 11.6 %
Liquidity Current Ratio 0.83×
Quick Ratio 0.57×
Solvency Debt / Equity Ratio 0.58×
Interest Coverage Ratio 15.4׳
Efficiency Asset Turnover 1.8×
Inventory Turnover 7.0×
Capital Structure Proprietary Ratio (Equity / Total Assets) 0.63×⁴

Key Takeaways

 Robust Profitability & Coverage: Net margin of 8.1 % and interest coverage of 15.4×
indicate healthy earnings and strong ability to service debt.
 Higher Leverage, Lower Liquidity: Debt-to-equity at 0.58× and quick ratio of 0.57×
reflect capital-intensive retail operations balanced by reliable cash flows from diverse
energy and retail segments.
 High Asset Productivity: Asset turnover of 1.8× underscores effective utilization of
extensive store and e-commerce infrastructure.

3. Trent Ltd. (Westside)

Category Ratio Value

Profitability Net Profit Margin 7.5 %
Return on Equity (ROE) 11.8 %
Return on Capital Employed 10.2 %
Liquidity Current Ratio 1.78×
Quick Ratio 1.22×
Solvency Debt / Equity Ratio 0.12×
Interest Coverage Ratio 20.5×⁵
Efficiency Asset Turnover 1.4×
Inventory Turnover 5.0×
Capital Structure Proprietary Ratio 0.88×⁶
Key Takeaways

 Excellent Solvency: Debt-to-equity of 0.12× and interest coverage of 20.5× highlight

minimal reliance on borrowed funds and strong debt service capacity.

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  Healthy Margins & Efficiency: Net margin of 7.5 % and inventory turnover of 5.0×
reflect profitable operations and swift stock movement in branded retail.
 Good Liquidity Position: Current ratio of 1.78× ensures comfortable coverage of
short-term liabilities.

4. Shoppers Stop Ltd

Category Ratio Value

Profitability Net Profit Margin 5.2 %
Return on Equity (ROE) 14.7 %
Return on Capital Employed 11.8 %
Liquidity Current Ratio 1.32×
Quick Ratio 0.85×
Solvency Debt / Equity Ratio 0.42×
Interest Coverage Ratio 10.1×⁷
Efficiency Asset Turnover 1.2×
Inventory Turnover 4.2×
Capital Structure Proprietary Ratio 0.70×⁸

Key Takeaways:

 Premium Profitability: ROE of 14.7 % and ROCE of 11.8 % demonstrate strong returns
from shareholder equity and capital employed.
 Moderate Liquidity & Leverage: Current ratio of 1.32× and debt-to-equity of 0.42×
indicate balanced working capital management and moderate use of debt financing.
 Operational Efficiency: Inventory turnover of 4.2× and asset turnover of 1.2× suggest
effective stock control and reasonable asset utilization across department-store and online
channels.

Findings

1. Market Growth & Demographics

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  Explosive GMV Expansion: India’s fashion & lifestyle e-commerce GMV surged from
US $14 billion in 2020 to US $21 billion in 2024, with an expected US $25 billion by
2025 (20 % CAGR).
 Digital Penetration: Over 830 million internet users (52.4 % of population) and
1.12 billion mobile connections underpin growth; mobile drives 62 % of fashion sessions.
 Youth-Led Demand: Gen Z and Millennials constitute 67 % of online fashion spend;
they prioritize trends, speed, and social proof, highlighting the need for mobile-first and
influencer-driven strategies.

2. Industry Structure & Dynamics

 SWOT Highlights: Strengths include robust digital user base and supportive PLI textile
incentives; key weaknesses are high return rates (~24 %) and fragmented logistics outside
metros; opportunities lie in rural markets and circular fashion; threats encompass intense
competition and supply-chain volatility.
 PESTEL Drivers: Government support (Digital India, 100 % FDI in B2B), economic
tailwinds (6.5 % GDP growth), social shifts (post-COVID digital habits), technological
enablers (AI personalization, 5 G-powered AR/VR), environmental mandates
(biodegradable packaging), and evolving legal frameworks (Consumer Protection Rules)
jointly shape the sector.
 Competitive Forces: Moderate entry barriers but high buyer power and rivalry; supplier
power varies by scale (large mills vs. artisanal vendors); substitution threats from offline
retail, rental, and resale services require brands to differentiate on experience and
exclusivity.

3. Consumer Journey & Marketing Funnels

AIDA Drop-Offs: Across Ajio, Nykaa, and Shoppers Stop, the largest funnel leaks occur
between “Interest → Desire” (due to fit/price hesitations) and “Desire → Action” (cart
abandonment > 65 %) in fashion verticals.

AARRR Insights:

 Acquisition Costs: ₹300–₹400 per new user—rising CAC necessitates loyalty and
referral incentives.

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  Activation Rates: 43 %–55 % activate (first meaningful purchase) within the onboarding
window; mobile app engagement is critical.
 Retention & Referral: Repeat-purchase rates of 32 %–40 % within 6–90 days; referrals
contribute 5 %–8 % of new users, indicating room to amplify social-commerce tactics.
 ARPU & Growth: Average revenue per user ranges ₹1,800–₹3,000 annually; top
players report fashion GMV growth of 14 %–27 % YoY.

4. Business Model Performance

 Marketplace Dominance: Flipkart + Myntra capture ~ 60 % of fashion GMV; their scale

affords deep assortments and reliable logistics at the expense of thin net margins.
 D2C & Omni-Channel Growth: Nykaa Fashion’s premium curation and Shoppers
Stop’s omnichannel “click-&-collect” approach show strong ROCE (10–12 %) despite
thinner scale.
 Quick Commerce Emergence: Zepto and Dunzo’s micro-fulfilment dark stores
achieved ₹2,500 cr GMV in 2024—demonstrating consumer appetite for instant apparel
and lifestyle essentials.

5. Financial Health of Leading Players

 Liquidity & Leverage: Nykaa Fashion (current ratio 1.82×, debt/equity 0.08×) and Trent
(1.78× / 0.12×) exhibit strong liquidity and low leverage. Reliance Retail shows higher
leverage (0.58×) balanced by strong cash flows.
 Profitability: ROE spans –2.3 % (Nykaa) to 14.7 % (Shoppers Stop), reflecting varied
maturity; net margins range –0.5 % to 8.1 % depending on scale and discount intensity.
 Efficiency: Inventory turnover of 4.2×–7.0× and asset turnover of 1.2×–1.8× suggest
robust stock management and asset utilization across the board.

6. Strategic Implications
Optimize Returns Management: Invest in AI-guided sizing and virtual try-ons to reduce the
24 % return rate by 10–15 %.

Expand Rural & Tier II/III Reach: Establish micro-fulfilment hubs and leverage ONDC
protocols to lower shipping times and costs outside metros.
Strengthen Loyalty & Referrals: Enhance reward tiers and referral incentives to lower CAC
and increase lifetime value.
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Differentiate on Experience: Scale AR/VR showrooms, quick-commerce offerings, and
sustainability initiatives to stand out in a crowded market.
Maintain Regulatory Agility: Build compliance-ready systems for data-localization and
consumer-protection rules to avoid disruptions.

Conclusion

As we reach the end of this IIP study on India’s fashion and lifestyle e-commerce sector, a few
clear themes emerge. First, the industry is accelerating at an unprecedented pace—fueled by
growing internet access, mobile penetration, and a youthful population eager to discover the
latest trends from the comfort of their screens. Yet this rapid growth brings its own challenges,

47
from managing high return rates and sustaining customer loyalty to navigating fierce competition
and evolving regulations.

Through our deep dive—combining market sizing, strategic frameworks (PESTEL, Five Forces,
SWOT), consumer journey mapping (AIDA, AARRR), and financial benchmarks—we’ve
uncovered both the strengths that market leaders like Ajio, Nykaa Fashion, and Shoppers Stop
can build upon, and the pain points that demand fresh solutions. Whether it’s using AR to make
“try-on” more reliable, extending omni-channel reach to underserved towns, or embedding
circular-fashion models to satisfy eco-conscious shoppers, the path forward is marked by both
innovation and empathy.

Ultimately, success in this space will come from a delicate balance: honoring the fast-paced
tastes of today’s consumer while laying the groundwork for sustainable, long-term relationships.
Companies that invest in seamless experiences—digital and physical—deploy data-driven
personalization, and demonstrate genuine social and environmental responsibility will not only
win today’s sale but also earn tomorrow’s loyalty.

This is more than a business opportunity; it’s a chance to reshape how India dresses, expresses
itself, and embraces a future where fashion and technology walk hand in hand. The trends and
strategies outlined here are your roadmap—may they inspire actionable steps that lead to
enduring growth and a more connected, confident, and stylish India.

Recommendations

1. Enhance Digital Experience & Reduce Returns

Virtual Fitting Rooms:

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Deploy AI/AR-powered “try-on” features across apparel categories to reduce the 24 % average
return rate by at least 10 ppt.

Size-Guided Personalization:
Integrate data-driven size suggestions and “fit predictors” based on past purchase and return data
to boost conversion by 5 %.

2. Strengthen Omni-Channel & Quick Commerce

Micro-Fulfilment Hubs:
Establish dark stores in top 10 metros to enable 2-hour delivery on core fashion staples,
capturing the ₹2,500 cr quick-commerce opportunity.

Click-&-Collect Expansion:
Partner with offline outlets (Reliance Trends, Westside) in Tier II/III towns via ONDC to serve
regions where home delivery logistics remain costly.

3. Deepen Loyalty & Referral Programs

Tiered Rewards Enhancements:

Introduce experiential benefits (virtual styling sessions, early-access drops) for top loyalty tiers
to lift repeat purchase rate above 40 %.

Social-Commerce Referrals: Incentivize existing customers with both monetary and

experiential rewards for referrals, targeting a 10 % contribution to new-user acquisition.
4. Optimize Supply Chain & Supplier Relations

Supplier Diversification:
Balance procurement between large mills (for basics) and artisan clusters (for premium/ethnic
lines) to stabilize costs and product exclusivity.

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Inventory Analytics:
Use predictive demand forecasting to reduce stock-outs and optimize inventory turnover from
current 4–5× to 6–7× annually.

15.5 Embrace Sustainability & Circularity

Eco-Packaging:
Transition to 100 % compostable or reusable packaging by 2026 to meet consumer demand
(75 % youth prefer sustainable brands).

Circular-Fashion Initiatives:
Launch rental and resale sub-brands (in partnership with platforms like Flyrobe) to capture the
emerging circular market, projected to grow at 20 % CAGR.

6. Regulatory & Compliance Readiness

Data Localization:
Build compliance-ready data-storage systems ahead of potential Data Protection legislation to
avoid business disruptions.

Consumer-Protection Adherence:
Ensure clear origin labeling, return policies, and grievance redressal processes to meet
E-Commerce Rules 2020 and build consumer trust.

Leverage AI & AR at Scale

 Deploy virtual fitting rooms across all major product categories to cut return rates by 10–
15 %.
 Use AI–driven dynamic pricing to optimize margins during peak shopping windows.

Strengthen Omni-Channel Integration

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  Roll out “click-&-collect” at tier II/III partner stores via ONDC to reach under-served
regions.
 Host hybrid digital-physical events (“Retail as Stage”) to drive both footfall and
livestream commerce.

Deepen Loyalty & Social Commerce

 Enhance tiered loyalty rewards with experiential perks (early access, styling sessions).
 Partner with social-commerce platforms for micro-seller driven referrals, targeting a 5 ppt
bump in new-user share.

Optimize Supply Chain Resilience

 Diversify supplier base by combining scale vendors (Arvind, Raymond) with regional
artisan clusters.
 Invest in micro-fulfilment centers in strategic metros to enable 2-hour delivery for key
SKUs.

Sustainability & Circularity

 Introduce take-back programs and rental sub-brands to capture 5 % of fashion spend

shifting to circular models.
 Shift packaging to 100 % compostable materials by 2026 to align with consumer
preferences (75 % youth demand).

7. Future Research Directions

Consumer Behavioral Study: Primary survey across Tier II/III to quantify emerging segment
dynamics and unmet needs.
Technology Impact Assessment: Measure ROI of AR/AI initiatives in reducing returns and
boosting conversion.
Circular-Economy Models: Pilot and evaluate rental/resale programs to gauge feasibility at
scale in India’s context.

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References

1. Moneycontrol. “FSN E-Commerce Ventures Ltd. Financial Statements.” Retrieved

July 2025.

2. Moneycontrol. “Reliance Industries Ltd. Financial Statements.” Retrieved July 2025.

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3. Moneycontrol. “Trent Ltd. (Westside) Financial Statements.” Retrieved July 2025.

4. Moneycontrol. “Shoppers Stop Ltd. Financial Statements.” Retrieved July 2025.

5. IAMAI & Kantar Research. “India Internet Users Report 2021–25.” Report, Internet and
Mobile Association of India, 2021.

6. RedSeer & BCG. “India E-commerce Market Report 2024.” Industry analysis, 2024.

7. Government of India, Ministry of Textiles. “Production Linked Incentive Scheme for

Textile Products.” 2021.

8. News18. “Ajio Delists Turkish Brands Amid Boycott Calls.” April 2025.

9. Economic Times. “Nykaa Fashion Q3 FY25 GMV and Performance Update.”

March 2025.

10. Business Standard. “Shoppers Stop Q4 FY25 Results: Revenue Growth & Challenges.”
May 2025.

11. Kearney. “India Quick Commerce Report 2024: Market Size & Growth Drivers.”
June 2025.

12. GSMA Intelligence. “India Mobile Connections and 5G Rollout Data, 2025.” July 2025.

13. RedSeer. “E-commerce Return Rates Benchmarking Report, Q1 2025.” May 2025.

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