Online Fashion Marketplace : Business Model, Ongoing & Futuristic Trends

When planning to start an eCommerce business, you are surrounded by many questions like:

  • What are the best industries to invest in?
  • Which niche to select?
  • What countries/geographical locations will bring the maximum revenue?
  • How to create a competitive advantage and maintain profitability?

eCommerce has shaped the global retail market. Today eCommerce across multiple categories like fashion, electronics, food etc accounts for trillions of dollars of sale globally and shows no signs of downtrend

Our Experts have performed an in-depth analysis and research on online fashion and apparel marketplace. Read the guide to know the global perspective,opportunities and platform checklist for this lucrative industry.

According to the Fashion eCommerce Report by Statista the market is expected to grow further at 12.2% per year and reach a total market size of US$991.64 Billion by the end of 2024. The report also states that a user bought at least one fashion item i.e clothes, shoes accessory etc item in the last 12 months. The reason behind the explosive growth in this sector is the innovative technologies that have created online shopping an experience worth count.

The global fashion industry is moving towards the decisive phase of digital adoption with growth in major countries across the globe. Here’s a quick overview of Fashion eCommerce Industry Statistical data:

  • With a market volume of US$348,700 Million in 2020, most revenue is generated in China
  • In the Fashion segment, 30% of total market revenue will be generated through online sales by 2024.
  • The average revenue per user (ARPU) in the Apparel segment amounts to US$172.23 in 2020.

Opportunities In Online Fashion eCommerce

Marketplaces like Amazon and ebay are undoubtedly the eCommerce giants with over 50% of eCommerce sales. In the fast growing economy, entrepreneurs are leveraging digital innovations to connect with their target audience with a better and enhanced customer experience. Offline fashion retailers are turning to digital platforms to encash the growing markets .

Why do fashion eCommerce account for growth and futuristic opportunity?

  • Lower digital barriers of entry encourage clothing retailers to sell clothing and fashion items across the globe.
  • Emerging worldwide population with disposable income has been another contributing factor for this industry.
  • Personalization is a leading factor, people love to receive personalized offers and messages from their preferred brands Personalization has been signified as a defining element to present and future success. Tracking user behaviour fashion eCommerce retailers have been able to target customers more accurately, hence winning more sales.
  • Mobile Applications have succeeded in engaging the customers at any time from any place. There is a growing pervasiveness among the entrepreneurs to capture the growing adoption of mobile phones by the users. eCommerce Mobile applications can reinvigorate stale sales from your offline store, thus creating a better experience for the users.

Due to these numerous opportunities in the eCommerce industry, entrepreneurs and business owners are able to tap the untapped markets, increase their customer base and ultimately increase profit margins.

The fashion eCommerce industry can be further segregated based on the products like:

Clothing and Apparel:The eCommerce market segment for Apparel covers all types of clothing items for men, women and children.Revenue in the Apparel segment is expected to be US$642,152m in 2020. With a market volume of US$222,822m in 2024, most revenue is generated in China followed by USA and Japan

Shoes: This segment includes all kinds of footwear e.g. casual shoes, slippers etc. Revenue in the Footwear segment amounts to US$135,136m by 2024. In the Footwear segment, 27% of total market revenue will be generated through online sales by 2024.

Accessories and Bags: The eCommerce market for Bags & Accessories segment contains various types of bags and accessories. Included are e.g. leather bags, suitcases and purses as well as jewelry, hats, scarves, and gloves, amongst others

Jewelry and Luxury items: The luxury goods marketplaces have shown an upsurge during the last ten years. , the Luxury Goods market is expected to grow at a CAGR of 4.9% between 2010 and 2023. This eCommerce segment comprises luxury goods like watches, jewelry, eyewear cosmetics and fragrances.

Testimonial By Beauty Supply Vendor For Yo!Kart

Grocery shopping sales in the world
Source: Clutch

Business Model For The Online Fashion & Apparel Marketplace

Like any other marketplace, the online fashion and apparel works in a similar manner. Here’s an overview of the functioning of such kind of marketplace:

  • The user logins/registers on the website
  • The vendor/seller list products on the website.
  • The user searches and filters products according to his preferences and makes payment for the product bought.
  • The seller receives the order request and delivers the product at the user's registered delivery address.
  • As for how the business makes money, the admins/owner of the marketplace earns money through the commission and seller membership fee.

Business owners can implement different commission rates for different products and to different sellers. An online marketplace can charge a membership fee for opening the online store in addition to the commission on every sale. There can be secondary sources for revenue such as:

  • On site promotions for the sellers
  • Banner Ads

Fashion eCommerce Marketplace Market Leaders

We are witnessing a systematic shift in the commerce world. Today offline retailers are making steady moves to enter the online eCommerce arena. It comes as no surprise that Amazon and ebay command the majority of eCommerce sales. Here are some of the market leader fashion leaders across the globe that have shown exponential growth over the last few years.

4DafitiSouth America30.5M

A Fashion Marketplace Owner's Review For Yo!Kart

Grocery shopping sales in the world
Source: Clutch

Important Features For The Online Fashion Marketplace

Here’s a checklist which you must thoroughly analyze before launching your platform to reduce complexities and ease the work for every user on the platform.

Customizability: Your eCommerce platform should be customizable according to the growing needs of the consumer. A future facing solution is the need of hour, customizing and scaling the business as per the current/ongoing marketing scenarios.

Payment Gateways: Payment Gateways play a significant role in the online retail environment as they are digital equivalent of credit card processors. Payment gateway conforms to safer payment transactions and safeguards against security issues. Multiple payment gateways make it easy for users to order products instantly online.

Product Catalog:The product catalog feature allows the eCommerce marketplace owner/admin to control and manage as many catalogs as possible. The vendors selects 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 the online shopping as the admin controls and optimize the product images, descriptions and specifications.

Multicurrency:The biggest convenience of a multi currency platform is easy accounting and global expansion. Providing the customers to get billed in their preferred currency unit

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 closed look at the visitor statistics, sales report and traffic analysis help you understand your customers & reduce Marketing costs.

Seamless Product Management: If you aim to scale your business rapidly and want millions of products , it is very imperative that your eCommerce platform has strong and robust product management that easily allows the marketplace owner to manage the products.

Features To Benefit Buyers Of The Fashion eCommerce Marketplace

Review and Rating: Majority of people read reviews before making a purchase online. Review and ratings have become an innovative way to gain social proof that persuade customers to buy online.

Streamlined Checkout: A streamlined checkout process is directly linked with the conversion rate for an eCommerce marketplace.

Rewards and Discounts: Rewards and discounts are an extra way to win additional revenue and word of mouth for your eCommerce marketplace. They have been highly effective in encouraging customers to shop online and drive customer loyalty. Not only rewards and discounts are driving sales but are a great way to increase product awareness and reach.

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 aware them about the real time discounts and sales. Mobile apps have been proven to increase customer engagement and retention. Developing mobile apps for your eCommerce marketplace will help in increasing the business with a convenient and customized shopping experience to the buyers.

Smart Recommendations: Including recommendations as a part of the user experience has helped in increasing the average order. Displaying a list of suggested products based on the browsing history helps in personalizing the user shopping experience and thereof increasing the conversion rate of your eCommerce store

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 only reasons why responsive designs, search engines too favour responsive stores online.

Features That Empowers The Sellers Of A Fashion eCommerce Marketplace

Advertisements: Display advertisements on the marketplace banner enable sellers to promote their product/shop. If a seller wants to promote his shop as soon as the launch, banner advertisements are the best way to achieve it. In addition to these sellers should also be able to run PPC campaigns to attract more visitors to his store or any featured product page.

Robust Vendor Dashboard: A vendor’s dashboard allows him to quickly analyze sales reports and product performance reports. Based on the real time reports, the vendor’s are able to manage effective decision making to improve the sales and conversion rate.

Multi-Store Functionality & Brand Creation: A vendor can have multiple stores with personalized logos, banners, and navigational tabs. Other than maintaining multiple stores, it is very imperative for the admins to understand that the success of a seller’s store will eventually result in the success of the online marketplace. Hence, sellers should have the freedom to manage the following properties like:

  • Banner Image
  • Products to be displayed on the store
  • About Section of the seller

All these typical features help sellers to maintain a brand identity of their own

Import/export feature: Allows vendors to easily import/ export product files that contain the product information. Since vendors usually sell their products on multiple platforms, it is very important that they are able to manage their inventory across multiple channels. Admins or eCommerce marketplace business owners can integrate their platforms with third party applications to provide omnichannel inventory sync.

Tax Management: Manage and customize tax categories rates for the products. Sellers need to add the tax percentage; the product rate is adjusted accordingly.

Inventory Management: Ease of managing inventory via the seller’s console. Get prompt notifications and emails whenever a product is out of stock, the product is shipped, etc.


As consumers are continuously seeking out convenience in the online world, the eCommerce industry is adapting in kind. Like the fashion eCommerce marketplace has been most effective when it comes to converting traffic into sales. Marketing and engaging your marketplace customers is a huge task, but once you choose the right eCommerce platform that reduces the complexity burden that might not seem a difficult task. The right selection of your fashion eCommerce marketplace is one of the key steps for the future success of your business.

Yo!Kart is a tailored eCommerce solution that helps you launch your own eCommerce marketplace with countless features to attain a competitive advantage. The agile team at Yo!Kart understands that the cutthroat competition in the eCommerce industry needs custom engineered solutions that will deliver value to the users and business owners.

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