Amazon India, last week, announced a 44,000 sq.ft. digital imaging studio in Gurgaon. Called BLINK, it is the third in the world - after New York and London - and would churn out images for fashion products on its site. The reason why the e-tailer invested in such a facility is simple. Showcasing what you would want to wear requires far better imaging than say, mobile phones, books, or even grocery. One could easily miss the details in a fabric, for instance, if it were not shot and edited with state of the art equipment. A high quality image would seduce consumers into buying more. Of course, premium brands, many of whom have just tasted success with e-commerce, are still finicky. While better images, content and videos can't replace the "touch and feel" of traditional retail, it can make the online buying experience more immersive.
The launch of the Gurgaon studio also underlines the importance of the fashion vertical for Amazon India. Fashion and Grocery are the growth areas of the future. And fashion is one category where Flipkart, its biggest Indian rival, dominates. The combination of Flipkart, Myntra and Jabong (both Myntra and Jabong are Flipkart companies) totals nearly 70 per cent of the online fashion e-tailing market, industry watchers calculate.
Business Today met Arun Sirdeshmukh, Head of Amazon Fashion in India, a few months ago. He made some interesting observations on the market and the company's prospects in India. Here are some highlights:
1. One out of three people visiting Amazon.in, look for one or more products in the fashion segment. Fashion SKUs now total about two million.
2. How the company communicates fashion is a tad different. Amazon, in fact, is marketing two brands - Amazon.in and Amazon Fashion. The company has run ad campaigns specifically around fashion and its sponsorship of the India Fashion Week is specifically meant to build this category.
3. The fundamentals of the fashion business, however, are no different from other categories the e-tailer sells. It promises a wide selection at a compelling price. Over the last one year, Amazon has fixed a missing piece - there were premium brands the site was not carrying. However, in the second half of 2016, the company launched almost 150 brands in India. The company continues to add international brands that are not available with any other e-tailer. The e-commerce world, calls this phenomena "exclusives". In an exclusive deal, Amazon makes better margins. If there is no competition, there is little undercutting.
4. Sirdeshmukh believes "the water will ultimately flow to players that does fulfilment well". He also added that with the company's Prime service, "we are in e-commerce 2.0". It is no longer about having an item delivered in four-six days. Shopping for fashion e-commerce means you should receive it tomorrow. As close (and fast) to the physical store experience.
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