The online to offline (O2O) model is being adopted by more players in the fashion retail segment. It was Myntra which set the ball rolling with its announcement that it plans to open 100 stores in different locations across the country.
Some of the online fashion retailers to reveal their intentions to open offline retail stores are Voonik and Limeroad. Voonik already has four outlets in Bengaluru selling ‘kurtis’ and is poised to open another 25 in Bengaluru itself. Limeroad has a much more ambitious plan and is aiming to have 2000 retail stores offline in a span of 2 to 3 years. It has kicked off this plan by opening the first such store in Surat.
Voonik believes that offline stores are self-sustaining since the profitability is much higher when compared to the online model. Limeroad is also quite upbeat about its offline ventures saying it brings their brands closer to the customer, particularly in smaller or Tier 2 and Tier 3 cities and towns. Its second store is coming up in Haryana, in Panipat.
There are even reports of much smaller firms like Jaypore and FabAlley are in the fray wanting to go offline from online. Some of them expect to gain in overall sales volumes and the contribution from the offline stores to be substantial in the final equation.
Besides a leader like Myntra showing the way, these minor players in the online fashion retail trade in India are at a crossroad at this juncture. They are finding it difficult to increase their customer base online and investments from VCs are also drying up. They feel by setting up the retail stores and boosting revenues they may be in a better position to convince the investing partners to loosen their purse strings.
But experts are quick to point out that the brick and mortar business has its own pitfalls and it is not going to be smooth sailing for these companies to manage the costs and there is enough competition from the organized and unorganized sectors, both in the offline fashion retail. Groups like Reliance and Future Retail (of the Big Bazaar fame) have a large presence throughout the country.