Fashion startups are in vogue this season. Despite the current funding crunch dogging the Indian startup space, startups specializing in fashion are drawing huge investor interest. In May alone, several fashion startups including 6Degree, Blinge, Shopwati, Hoppingo and Coutloot raised funds from investors that include Venture Catalysts, ex-Flipkart CBO Ankit Nagori, IAN and others. Tiger Global-backed fashion discovery app Roposo raised $5 million in the second round of funding in April from Bertelsmann India Investments.

Industry experts attribute this to the burgeoning Rs 7,000 crore online fashion market, which is set to account for 35% of the total online retail market by 2020, from 18% at present.“Online fashion is a high growth category today with youth fashion and specialized fashion doing extremely well,” said Sreedhar Prasad, Partner (ecommerce) at KPMG. Gurgaon-based fashion startup Postfold, for instance, is catering to young working professionals with its `desk-to dinner’ apparel concept. The company creates affordable work wear that can also be worn to parties and dinners after work. Ashish Gurnani, Founder of Postfold, claimed the company is witnessing 35% month-on-month growth.

“Fashion startups are trying to bridge the gap between online and offline retail through innovation in tech and market efficiency ,” said Gurnani. “When we came back to India from the US, we realized new-gen professionals don’t necessarily go home after work because they have social commitments. That’s the gap we wanted to target.”

Earlier, it was just the online biggies including Amazon India, Koovs, Flipkart, Myntra and Jabong that were trying to cash in on the high-margin fashion business. But now, the market is seeing renewed activity with entry of specialized players such as Aditya Birla Group’s Abof, Reliance Industries’ Ajio and Arvind’s NNNow, apart from several small-scale startups.

“There’s so much potential and so little competition from any one brand,” said Siddharth Talwar, Co-Founder and partner at VC firm Lightbox Ventures.“The largest single fashion brand in the country is Zara and it’s only available in around four cities. Opportunity for new players doesn’t get bigger than this.”

While new startups are emerging, established ones such as Tiger Global-backed fashion e-tailer Limeroad are gearing up for the big push. Starting off as a womens wear only platform, Limeroad opened its doors to men last month.

“On the demand side, the retail lifestyle business in India is estimated at $70 billion, of which only 1-2% is online,” said Suchi Mukherjee, Founder and CEO of Limeroad. “On the supply side, of the nearly 20 million estimated SMEs that manufacture and retail lifestyle products, less than 1% are online. Either way you look at it, there is tremendous room to grow .”

Source: The Times of India