Online fashion and beauty marketplaces Myntra and Nykaa as well as brands are gearing up for a strong rebound this festive season after a weak first half impacted by the Covid-19 pandemic, top executives told ET.
The fashion and beauty categories were the hardest hit by the nationwide lockdown as people cut spends, especially discretionary spending for special occasions.
As India opens up however and people start socializing, there will be an expected uptick in demand, said analysts, brands and marketplaces.
Myntra, the market leader in the fashion space, expects to double sales during the festive season compared to last year.
“There was less opportunity to offer fresh designs and new collections in the first half of the year, but the upcoming months will give brands the scope to connect with customers,” Ayyappan Rajagopal, Head of Business, Myntra told ET.
“We are working towards scaling our festive season to two times that of last year…This festive season, our marketing efforts will be led by the power of celebrities who have a wide audience appeal cutting across regions,” he added.
Nykaa, which leads the beauty and cosmetics category, expects to grow by 50% on an omnichannel basis, while its relatively new fashion category is expected to become a Rs 500 crore business at an MRP or retail price level, founder and CEO Falguni Nayar told ET.
Compared to the previous festive season, the fashion business is expected to grow by 6-7 times at Nykaa.
“The second half of this year is traditionally the peak season for beauty business and will see our business grow as supply chains have been running smoothly and the mobility index is improving,” Nayar said. “As we enter the festive season, we expect a pickup in the makeup category, especially colour cosmetics,” she added.
Brands mirrored the sentiment as well.
In the personal care space, MamaEarth expects to grow three times over last year’s sales numbers.
“We have been working on building stocks for sale over the last four weeks; supply chain continues to be a challenge due to Covid-19 and containment zone lockdowns, but we are hopeful we will be prepared by early October with enough stock cover,” Varun Alagh, CEO of MamaEarth told ET.
In the fashion space, ethnic brands, which have been the most affected by changing consumer preferences due to the pandemic, are also preparing for the festive season sale period.
Raisin, a women’s clothing brand, is gearing up to launch more than 40 styles that work for intimate gatherings and festive celebrations.
Every year, 25% of its sales are from the online channel, but this year it expects online sales to contribute 35-40% of its business, Vikash Pacheriwal, cofounder, Raisin told ET.
Offline recovery slow
Analysts are cautious of the brands’ expectations since many people have had prolonged stints working from home and limited socializing.
“However, despite the slowdown in offline sales that make for 80% of revenue for the two categories, many niche and online players continued to see strong growth during the lockdown, driven by first-time buyers and existing customers who are buying online,” said Rajat Wahi, Partner, Deloitte India.
Offline sales will take time to recover, businesses said.
Nykaa, for instance, expects it would take until December for physical stores to reach February numbers.
“E-commerce, in terms of both beauty and fashion, are another story altogether, with both currently running at 150 – 160% of pre-pandemic numbers,” said Nykaa’s Nayar.
At Myntra, the virus outbreak has further necessitated stronger collaboration between offline and online marketplaces, emphasizing the importance of omnichannel integration.
“Brands that were onboard via omnichannel integrations saw up to 6X growth in sales during this June ‘End of Reason Sale’ compared to business as usual sales,” Rajagopal of Myntra said.
The online fashion retailer has already integrated over 700 stores from more than 70 brands and plans to launch more than 150 brands from 3,000 High Street and mall stores in the next six months.
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