India has been moving up fast in the world economic scene: In the last year, its GDP rose 8.8%. But in retail, India (as well as the rest of Asia) still lags far behind the rest of the world –- of the $350 billion in international annual online sales, India generates only $1.4 billion. Still, this too is poised to change: Asia Development Bank’s chief economist Jong-Wha Lee recently declared that “Asia’s emerging consumers are very much expected to become the next global consumers and assume the traditional role of the U.S. and European middle classes and play a key role in rebalancing the world’s economy.”
There are already signs that the consumer economy in India is growing –- the burgeoning middle class is more inclined to purchase modern luxuries like cars, and as a result auto revenue rose 41.5% in the past year. Until recently, the retail industry in India has been fractured and disorganized — but organization is rapidly coming.
While American brands have been making millions from e-commerce for years, online retail in India is just starting to catch on, though it’s catching on fast. The Indian e-commerce industry is up 30%, and sites like eBay, which now has over 2.5 million users in India, have grown by up to 60% in the last year.
In addition, Mumbai recently established its own Fashion Week, which is significant because it recognizes the growing purchase power of the city’s fashion-conscious middle class –- annual consumer sales by this particular group reached $4.3 trillion in 2008.
With this in mind, officials running the Lakmé Fashion Week have decided to partner with the popular members-only shopping site Fashion and You. The site is similar to Gilt Groupe, the daily-sales supersite that has garnered $48 million in sales since its creation in 2007. Labels participating in Lakmé Fashion Week who volunteer to be involved with the Fashion and You project will hand-pick clothes from their collections to be placed in a ‘LFW Pret Collection’.
While the designers have no control over pricing, this opportunity still gives them an opportunity to sell more and reach a much larger consumer base — since, just like New York’s Fashion Week, the vast majority of Indian consumers are unable to attend fashion shows.
Fashion and You chief operating officer Pearl Uppal has said that the collection will be “affordable,” and the line will soon be available for purchase now that the week-long events have ended.