After groceries and electronics, fashion is the next quick-commerce battleground

Mint

2 days ago

New Delhi: After getting urban Indians hooked on to 10-minute groceries to electronics, Indian online retailers will now battle for quick delivery of a category tailored to fuel instant gratification: fashion.
On Friday, Reliance Retail Ltd, India's largest retailer, rolled out Ajio Rush, the online commerce platform's four-hour delivery service that is live in six cities. Earlier this year, Myntra expanded its quick commerce offerings with its M-Now services in Delhi and Mumbai. Brick-and-mortar retailer Libas is also increasing investments in quick commerce, using its own dark stores and partnering with third-party platforms to offer faster shipments on select items.
Also read | Myntra aims to stream glamour through stories, stars and songs
Fashion retailers aim to tap the preference for same-day deliveries among consumers, driven by the explosion of rapid shipping of milk, eggs, bread, fruits and vegetables. India's quick commerce market has grown 150% year-on-year, reaching $10 billion in gross merchandise value and a monthly run rate of $900-950 million, according to Redseer estimates. However, it still accounts for only 15% of the e-commerce market, estimated at $70 billion, with significant headroom to grow.
Retailers have started by offering select and high-selling fashion items through quick commerce. Ajio's Rush has seen an encouraging response in its initial days, with customers placing high-value orders and initiating fewer returns, according to a senior company executive.
Launched in the June quarter, Rush offers 130,000 products that can be delivered in four hours, leveraging Reliance Retail's existing store network for deliveries.
"We launched Ajio Rush—the equivalent of a quick commerce service—in the top six cities. We have carved out space in our stores, and we are delivering from those stores where the promise is within four hours. That is live in six cities with 130,000-plus options," said Dinesh Taluja, chief financial officer atReliance Retail Ventures Ltd (RRVL), during the company's post-earnings call Friday evening. "These are curated options in those stores because we have a lot of data for those pincodes in terms of what's selling, and what we see are initial signs; it's still relatively young."
RRVL, a subsidiary of Mukesh Ambani-owned Reliance Industries Ltd, owns e-commerce platforms Ajio and JioMart. Ajio sells brands such as Gap, M&S, H&M, and Asos. Of these, RRVL holds rights to Gap, M&S, and Asos in India.
Fewer returns, larger bill sizes
Taluja said orders placed via this offering lead to fewer returns and larger bill sizes.
'Average bill value is 50 to 60% higher compared to a normal transaction. In close to 12-15% of bills where we are offering this service, customers are adopting Ajio Rush; returns are significantly lower because it is addressing a need that the customer has…With better bill values and lower returns, the unit economics will improve substantially," he said.
Since its launch in Bengaluru in December, Flipkart-backed online fashion platform Myntra's M-Now (30-minute platform) has been witnessing demand from customers across categories and products. M-Now has since expanded into metros like Mumbai and Delhi.
Also read | Flipkart Group-owned Myntra rejigs commission to drive low-ticket sales
Currently live in Bengaluru, Mumbai, and Delhi—with pilots underway in other cities— M-Now's daily orders doubled last quarter. Key spikes include a four-time jump on the first day of the End of Reason Sale, and a 4.5x surge in orders alongside a 5x increase in new customers around Valentine's Day, according to a top company executive. On Mother's Day, beauty and personal care saw a 1.4X spike, led by gifting.
'Emerging consumption trends include dressing up, grooming, home décor, and gifting," said Sharon Pais, chief business officer, Myntra in an emailed response to Mint. 'With a rich M-Now assortment featuring 600 brands,premium brands that are witnessing strong traction include MANGO, L'Oréal, Maybelline, Fossil, Calvin Klein, and Hidesign."
Fashion fast delivery pioneer
Over the past few years, Myntra has pioneered fast deliveries in fashion and lifestyle through M-Express, enabling 24 to 48-hour fulfilment, said Pais. Today, nearly 50% of Myntra orders are delivered within 48 hours across 600+ cities, reflecting growing consumer preference for speed-led access to premium fashion, beauty, and lifestyle, he said.
Quick commerce is still dominated by sales of daily essentials such as milk, eggs, bread, fruits, and vegetables. Growth is primarily led by grocery, beauty, general merchandise, and small-ticket electronics, while traction for fashion, appliances, and furniture remains limited. And demand is largely limited to large metro cities.
Queries emailed to Zepto and Instamart, India's two largest quick-commerce platforms, remained unanswered.
Also read | Reliance Retail's AJIO launches D2C-focused interactive e-com platform AJIOGRAM
Analysts said the move makes little commercial sense and that heightened competition is why companies are willing to tweak their business models to adapt to this change in consumer behaviour.
'At the end of the day, if consumers are willing to pay for it and companies are willing to fund this (by cash burn), then there will always be demand even if not urgent," said Harminder Sahni, managing director and partner at consulting firm Wazir Advisors. 'However, it doesn't add up or make commercial sense bringing more products on a quick service platform."
Sahni said the labour arbitrage or low-cost labour in India enables newer players to enter the market and offer such services.
Experiment in faster deliveries
Still, Ethnic fashion retailer Libas has also rolled out its own small dark stores as an experiment to ramp up faster deliveries. It recently launched a campaign with Zepto to roll out a select range of clothing such as kurtas and leggings pan-India.
"We're scaling that up. It's about cracking what products are required," said Sidhant Keshwani, founder and CEO, Libas. A few years ago, two-day delivery was the norm, but today it is seen as a curse, highlighting the consumer shift underway, he said.
Also read | Ajio accounts for 25% of Reliance Retail's apparel biz
'We're setting up our own dark stores, and are pushing and convincing all the (quick commerce) partners to pick up stock from our dark stores," Keshwani said. 'We have convinced Myntra, and our pilot went live in June. Before Diwali, we are planning to set up 20 such dark stores in Delhi, Mumbai, Bengaluru."
However, the rollout will not come without its challenges, he said, especially given the inventory churn retailers typically experience each season.
The retailer, according to Keshwani, is being selective with inventory and opening dark stores in high-transaction areas like Delhi's Dilshad Garden.