When planning to start an eCommerce business, you are surrounded by many questions like:
eCommerce has shaped the global retail market. Today, eCommerce across multiple categories like fashion, electronics, food, etc., accounts for trillions of dollars of global sales and shows no signs of a downtrend. Our experts have performed an in-depth analysis and research on the online fashion and apparel market.
Read this guide to know the global perspective, opportunities, market leaders, trends, and checklist to start an online fashion marketplace.
In 2023, the global online fashion market was valued at nearly 821 billion U.S. dollars. It is expected to surpass that figure by the end of 2024; in 2027, it could reach just over 1.2 trillion U.S. dollars. The reason behind the encouraging growth in this sector is the continuous progression of the eCommerce shopping experience offered by popular online fashion marketplaces, driven by innovation.
The global fashion industry is moving towards the decisive phase of digital adoption with growth in major countries across the globe. For B2C eCommerce, it is the largest contributor both by revenue and volume. Here's a quick overview of the global fashion market.
If you have observed the stats shared in the section above, probable questions would be: Why does fashion eCommerce account for growth and futuristic opportunity? What are the reasons that make many aspiring entrepreneurs build a fashion marketplace? Let's find the answers to these questions below.
Due to these numerous opportunities in the fashion eCommerce industry, entrepreneurs and business owners can tap the untapped markets, increase their customer base, and ultimately increase profit margins. The fashion eCommerce industry can be further segregated based on products like
Clothing and Apparel:The eCommerce market segment for Apparel covers all types of clothing items for men, women, and children. The revenue in this segment is expected to show an annual growth rate of 11.90% from 2024 to 2027, resulting in a projected market volume of US$12,470.00m by 2027.
The number of users in this segment is expected to amount to 395.0m users by 2027. User penetration is expected to hit 26.9% by 2027 and the average revenue per user (ARPU) is expected to amount to US$25.48.
Shoes:The shoe niche in the fashion eCommerce industry offers vast opportunities for retailers, including high demand, diverse styles, and global reach.Revenue in this segment is expected to show an annual growth rate of 10.28% from 2024 to 2027, resulting in a projected market volume of US$192.80bn by 2027.
In the Footwear segment, the number of users is expected to amount to 2,994.8m users by 2027. User penetration is expected to hit 37.7% by 2027. The average revenue per user (ARPU) is expected to amount to US$56.85.
Accessories and Bags:The eCommerce market for the Bags & Accessories segment is expected to expand at a CAGR of 14.7% from 2024 to 2028.
Jewelry and Luxury items:This eCommerce segment comprises luxury goods like watches, jewelry, eyewear cosmetics, and fragrances. The luxury goods marketplaces have shown an upsurge during the last ten years. Revenue in the Luxury Goods is expected to amount to US$368.90bn in 2024. The market is expected to grow annually by 5.40% between 2024 and 2027.
Success for an online fashion marketplace does not just depend on the products on sale, rather, the overall shopping experience of the Fashion eCommerce platform is equally important to engage users. We discuss below the key drivers that you can consider before you build a fashion marketplace. These tips are ideas that top fashion platform brands are already following to sustain revenue from their online fashion marketplaces.
Personalization:Today, a significant proportion of total sales are generated via this channel of personal recommendations or promotions. Sending personalized messages, offers, and experiences has proved to increase revenue across the eCommerce industry.
So how does a fashion eCommerce business do it?
Whether the customer is new or returning, it is very important to know the following factors to get the personalization right:
This can be ascertained with the help of analytical data. Moreover, tracking user behavior through data has helped online fashion platforms build connections with users. This data can include purchasing history, browsing history, demographics, and psychographics. Such data gives the business a better analysis of its target audience. According to Statista, 19 percent of responding U.S. consumers said that personally relevant content significantly increased their purchase intent, with 59 percent saying that personalized content somewhat increased their intent to purchase.
If we get these right, we can then focus on the kinds of personalization strategies we want to provide to the customers. Personalization in fashion eCommerce can be:
Partnering with Influencers:In the past few years, the increased intertwining of social media in the lives of people has given rise to a novel marketing channel. Such a partnership allows fashion brands to connect with their target audience more authentically, leveraging the influencer's trust and influence to create meaningful relationships. In other words, this helps in giving the brand an audience that is already engaged by the influencer and helps in driving brand loyalty.
For instance, ASOS, a top online fashion marketplace has featured stylist pages for influencers to provide the audience a glimpse of their favorite celebrities' styles & other inspirational tips.
User-Generated Content as Social Proof: A key pain point for eCommerce is trust. How does a business build trust with its consumers via digital channels? Unlike a brick-and-mortar store, neither is a buyer unable to see or meet the business nor can they hold the product in their hands before making a purchase. This is accentuated in the case of the fashion industry, where the look and feel of the product is an important aspect. The answer here lies with User Generated Content or UGS for short. A popular way to include this is via product reviews and ratings, allowing buyers to give their opinion about the product.
User-Generated Content as Social Proof:A key pain point for eCommerce is trust. How does a business build trust with its consumers via digital channels? Unlike a brick-and-mortar store, neither is a buyer unable to see or meet the business nor can they hold the product in their hands before making a purchase. This is accentuated in the case of the fashion industry, where the look and feel of the product is an important aspect. The answer here lies with User Generated Content or UGS for short. A popular way to include this is via product reviews and ratings, allowing buyers to give their opinion about the product.
We are witnessing a systematic shift in the commerce world. Newer players are entering the market and gaining popularity over traditionally strong players like Amazon. Here are some of the market leaders in the fashion industry across the globe that have shown exponential growth over the last few years.
| Sr.No | Name | Region/Country | Visitors per Month |
|---|---|---|---|
| 1 | Zalando | Europe | 119.0M |
| 2 | ASOS | Global | 76.3M |
| 4 | Dafiti | South America | 30.5M |
| 5 | Lamoda | Russia | 16.1M |
Like any other marketplace, the online fashion marketplace works similarly. Here's an overview of the functioning of such kind of online fashion marketplace:
Business owners can implement different commission rates for different products and for different sellers. A fashion eCommerce marketplace can charge a membership fee for opening the online store in addition to the commission on every sale. There can be secondary sources of revenue such as
Here's a checklist that you must thoroughly analyze before you build an online fashion marketplace.
Product Catalog:The product catalog feature allows the owner/admin of the fashion eCommerce platform to control and manage as many catalogs as possible. The vendors select the product from the existing catalog and add it to their inventory and mention the pricing. The feature helps to enhance the overall experience of online shopping as the admin controls and optimizes the product images, descriptions, and specifications.
Payment Gateways: Payment Gateways play a significant role in the online retail environment as they are a safe and secure digital system to process payments. Payment gateways conform to safer payment transactions and safeguard against security issues. Multiple payment gateways make it easy for users to order products instantly online.
Analytics & Reporting:It is extremely important to review the performance of your marketplace. Based on the number, you can decide the future strategies and goals. Having a close look at the visitor statistics, sales report, and traffic analysis helps you understand your customers & reduce marketing costs.
Seamless Product Management:If you aim to scale your business rapidly and want millions of products, your fashion platform must have robust product management that easily allows the marketplace owner to manage the products.
Customizability: eCommerce is a dynamic ecosystem. Agility to respond to this change will warrant the use of a customizable fashion eCommerce solution. A future-ready solution is the answer, allowing you the flexibility to customize and scale the business as per the current/ongoing marketing scenarios.
Multicurrency:The biggest convenience of a multi-currency platform is easy accounting and global expansion. Billing the customers in their preferred currency unit improves their user experience on the platform.
Features that you need to consider for buyers of the fashion eCommerce platform:
Mobile Applications:Personalization is one of the major reasons why mobile apps are performing better than desktops. Mobile applications help buyers to make purchases on the go and make them aware of real-time discounts and sales. Mobile apps have been proven to increase customer engagement and retention. Adding mobile apps to your eCommerce strategy will help enhance the shopping experience for the buyers and increase your business reach.
Rewards and Discounts: Better prices are a pivotal leverage lever that eCommerce has used to attract consumers. In this, Rewards and discounts is an effective marketing tool that can be used in a number of ways. These have been highly effective in encouraging customers to shop online and driving customer loyalty.
Responsive Layout:A well-optimized website will bring more visitors and conversions. A responsive web design allows a seamless user experience across multiple devices. Ease of use, better site speed, and increased conversion rates are not the only reasons why responsive designs, search engines too favor responsive stores online.
Smart Recommendations:Including recommendations as a part of the user experience has helped in increasing the Average Order Value (AOV). Displaying a list of suggested products based on the browsing history helps in personalizing the user shopping experience and therefore increasing the conversion rate of your eCommerce store.
Streamlined Checkout:A streamlined checkout process is directly linked with the conversion rate for an eCommerce marketplace.
Turnkey fashion ecommerce software provides an easy approach to build an eCommerce platform for fashion. While there are solution available that allow you to build an eCommerce marketplace. They vary greatly on a number of parameters. Moreover, as discussed above ― fashion eCommerce platforms will need purpose-driven features to drive success in a competitive eCommerce sphere. So, instead of quickly choosing the easiest and cheapest option, try to answer the following questions in your mind.
One option is going for SaaS solutions, which are actually subscription-based software. These are built and maintained by the businesses offering these platforms themselves and are available for rent. By paying a monthly or yearly subscription, SaaS users have access to the pre-designed themes, plugins, modules, templates and add-ons that allow users to customize their storefront.
However, the monthly/yearly recurring subscription cost increases the total ownership cost to a huge extent. Moreover, issues such as identity and access management need to be addressed before trusting any third-party service providers. If this is not enough, software running on a remote server often lacks in performance when compared to the on-premise one.
The other option is a readymade fashion eCommerce software solution offering complete control over the source code, thus allowing for complete customization. The upfront purchasing cost may seem a bit more than the SaaS, however, the total ownership cost is much low in the long run. The readymade solutions also offer the ability to start small and scale the businesses at a later stage to accommodate the growing needs.
One such complete fashion eCommerce solution is Yo!Kart that has all the benefits associated with a readymade customizable solution. On-premise hosting, lower cost of ownership, faster go-to-market time, along with platform-wide APIs, and integration with external applications and services make it an ideal fashion eCommerce software.
Yo!Kart has powered around 5000+ marketplaces, which include marketplaces like GoEthnyk, Mora Labels & Noor and Zafir ― which are eCommerce websites built for the fashion industry.
To conclude, hope you have gained sufficient information to build fashion eCommerce website for multivendor operations. With an upward trend and numerous successful business models, starting an online business can be an easy recipe for success. You need to understand the market and should effectively leverage the above-mentioned information that will help you in building a strong fashion marketplace platform that can survive well in the market.
And lastly, when backed by the perfect fashion eCommerce software like Yo!Kart and a strong business plan, there's never been a better time to bring your clothing store dreams to life.
Yes, Yo!Kart is a white-label solution that provides the majority of eCommerce features a fashion marketplace would need.
Can I launch mobile apps for my fashion eCommerce marketplace?Yes, Yo!Kart offers customer-centric buyer mobile apps for Android and iOS to provide a seamless shopping experience to customers.
Yes, our eCommerce fashion solution is fully customizable and can be customized as per business requirements.
The cost of building a fashion eCommerce platform depends on the approach you decide on. If you choose to develop the platform from scratch, the cost of the platform will be very high. The starting cost of building with a readymade solution like Yo!Kart will be $499 (Currently) and will vary as per the requirements.
Building an online fashion marketplace with the help of Yo!Kart will depend upon the customizations. With the GoQuick package, the marketplace can be built and launched within 5-7 days
