Targeting India's e-commerce hotspots

Across regions, states and cities, Indian consumers are increasingly turning towards the Internet to shop for apparel. As the e-retail fever spreads to new geographies, building strength in digital channels will become an imperative for apparel retailers to both secure and expand their customer base.

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Quick view:

  • The potential of e-retail is clearly evident given the success of Amazon, Flipkart and Jabong.
  • Despite this Kanvic analysis of a sample of leading apparel retailers shows that penetration into top 68 e-retail hotspots is only 7-57%.
  • The potential of multichannel retail given the ability to sell pan-India and the lack of restriction on shelf-space and product assortment makes its vital to ensuring to ensuring and expanding their customer base.

In India, online marketplaces such as Amazon, Flipkart or Jabong are turning more and more consumers into digital shoppers. The value proposition of these players, based on attractive prices, convenience, and choice is answering the needs of a widening base of customers. So much so that in 2014, only a few years after their entry into the Indian market, online sales of apparel reached a record Rs. 3,200 crores.

Not only is India’s base of digital consumers expanding in size, but it is also expanding in breadth. Early adopters of digital channels were initially concentrated in big metros, but as smartphone penetration increased and marketplaces strengthened their logistics capabilities, online shopping has become a pan-India phenomenon.

Today, online apparel shoppers live in more diverse locations - including many Tier II and III cities, resulting in the dispersed set of e-retail hotspots shown on the map.

With consumers going digital in new geographies, brick and mortar apparel retailers should look at their store footprint and answer two important questions: 

  1. How exposed is our business to consumers’ shift to digital?  
  2. Could our business hit new demand hotspots through digital channels?

To obtain insights on these questions, our team took a sample of leading apparel retailers and compared their store locations to India’s top hotspots for buying apparel online.


Some leading brick and mortar apparel retailers operate the vast majority of their stores in e-retail hotspots, where consumers already show a high interest in buying apparel online.


In these locations, buyers will have a higher propensity to navigate between physical and digital channels throughout their purchasing journey. This poses a serious threat to those players lacking a strong online presence, as customers will be tempted to shop elsewhere whenever a retailer cannot serve them across both online and offline touch-points.

In this context, apparel retailers with a high brick and mortar presence in e-retail hotspots should make a strong commitment to increasing their online capabilities. One retailer in our sample is a particularly interesting case. This player operates almost 90% of its stores in cities where consumers have a high propensity to shop online. However, it only offers a limited range of its products through third-party marketplaces. Being unable to consistently follow its shoppers across their multichannel journey, this retailer could be losing business to its online competitors.

Another compelling reason for Indian apparel retailers to build a stronger online presence is that this channel can significantly boost their reach. From our analysis, it appears that leading apparel retailers could leverage digital channels to go much beyond their current geographies and gain access to a new base of consumers.

Through their existing store footprint, each of the retailers in our sample is only reaching between 5 and 39 of the top 68 e-retail hotspots for apparel. Entering these geographies with new brick and mortar stores could be an option, but adding outlets is a slow and costly process, providing only a limited reach. It also requires careful planning of store roll-out and adjustments in each store’s product mix.

In contrast, developing digital channels to reach these digitally active customers could be much more efficient. On a single platform, products and brands can be advertised and sold across all of India’s e-retail hotspots. And since online offers unlimited shelf-space, product assortment need not be adapted to a specific geography. Instead, consumers will use the tools availed by search and recommendation engines to navigate through the offer and find what suits their particular tastes.

As the market for apparel moves increasingly online, brick and mortar retailers need to get ready to hit emerging e-retail hotspots in both existing and new markets.

About the authors

Gehan Wanduragala is principal at Kanvic Consulting

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