E X P L O I T I N G T H E R E T A I L R E V O L U T I O N. Daniel Cotton EVP, WGSN Asia-Pacific 30 October 2014

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1 VIBRANT INDIA E X P L O I T I N G T H E R E T A I L R E V O L U T I O N Daniel Cotton EVP, WGSN Asia-Pacific 30 October 2014

2 A G E N D A We are WGSN Group The New Indian Retail Landscape Expectations of the 2015 Consumer Building Technology Solutions Around atech Consumer Building Insight Around Your Buying & Merchandising Teams

3 PA R T O F T H E T O P R I G H T G R O U P AN INTERNATIONAL B2B, MULTI-PLATFORM MEDIA GROUP 300M REVENUES 50% EX-UK 12% HEADLINE GROWTH 1,800 EMPLOYEES ACQUIRING AND LAUNCHING FIVE OPERATING COMPANIES DOUBLE DIGIT GROWTH LAUNCHING MORE PRODUCTS YEAR ON YEAR

4 W G S N 1 6 Y E A R S O F D I G I TA L S E R V I C E S TRENDS PLANNING & BUYING RETAIL STRATEGY CONSULTING Apparel and fashion Daily data FMCG, Analysts and retailers >70% growth yoy Soft and hard goods 100 retailers 10,000 brands 11m SKUs Sale and retail analytics data Clients on 5 continents 4,000 clients Every Fortune 500 apparel brand Own and competitor range analysis Strategic analysis of retail value chain Product, planning, strategy and training

5 T H E R E TA I L R E V O L U T I O N H A P P E N I N G I N I N D I A WHERE ARE YOU ON YOUR CONVERGENCE JOURNEY? ONLINE WHO ARE YOU TARGETING? MILLENNIALS COMPETE ON NEWNESS FASTFASHION SMART PHONE Access to internet that wouldn t otherwise have a connection to this channel COMPETE ON NEW TECHNOLOGY & INNOVATION FASHTECH Source data: Planet Retail Shopology The science of modern shopping

6 M U K E S H B A N S A L, C E O M Y N T R A & H E A D O F F A S H I O N A T F L I P K A R T "I'm open to the idea of a strategic (investor) if the DNA is similar, and the investor has a deep technology know-how with a vision to grow Myntra over the next 5-10 years, Building a winning business required the focus to resist doing too many things at once, while finding the right blend of fashion and technology.

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8 S T E V E S U N N U C K S, G L O B A L P R E S I D E N T O F G A P K A R L - J O H A N P E R S S O, C E O O F H & M Gap is loved around the world for our American casual style and enduring value and quality We are so pleased to bring our brand and products to life for customers in India India is an emerging, vibrant market and an important next step in our global expansion strategy. In india we will integrate our physical and online offerings

9 FA S H I O N P L AY E R S A R E S P R E A D I N G T H E I R W I N G S

10 R E TA I L E R S A R E C H A N G I N G C O M P E T I T I V E D Y N A M I C S International brands are looking to exploit the opportunities provided by India s blossoming e- commerce market I N T E R N A T I O N A L R E T A I L E R S L O O K I N G A T M A R K E T E N T R Y L O C A L R E T A I L E R S G E T T I N G I T R I G H T

11 M E E T T H E C O N S U M E R O F ALWAYS CONNECTED IGNORE ADS SEEKS AUTHENTICITY FOLLOWS RITUALS OPINIONATED & SHARES IT REQUIRES IMMEDIACY VALUE CONSCIOUS TRUST IS CONVENIENCE Source data: infographic by Reuven Gorsht

12 1. P R O V I D E S E A M L E S S O N L I N E E X P E R I E N C E S The share of online spending via mobile devices is growing, so retailers need to adopt a device agnostic strategy. Global Spend Online: Proportion by Device, 2012 vs (%) Tablet 13% Mobile 13.7% 2012 Tablet 28.1% 2013 PC Laptop 43.5% Spend via MOBILE Up $342mn in a YEAR. A growth of 116% PC/Laptop 73.3% Mobile 28.4% Source data: Planet Retail Shopology The science of modern shopping

13 2. A P PA R E L S H A R E O F O N L I N E S P E N D I S G R O W I N G Apparel share of online spend growing as consumers gain confidence in retailers improving propositions. Apparel as a proportion of online spending: 2012 vs (%) Source data: % $263mn Planet Retail Shopology The science of modern shopping 13.9% $310mn

14 2. A P PA R E L S P E N D V I A M O B I L E I S O N T H E R I S E The share of online spending on apparel via smartphones is growing. Apparel as a proportion of online spending via smartphones: 2012 vs (%) Source data: % 23.8% $27mn Planet Retail Shopology The science of modern shopping $74mn

15 2. R O L E O F P C / L A P T O P R E M A I N S I M P O R TA N T Despite the rise in smartphone shopping, when it comes to buying apparel online in the future, our research shows that the PC or laptop remains important Likelihood of shopping online for apparel by each device in the future: Very Likely and Extremely Likely taken BASE Size: 1,597 52% 49% 46% 32% 33% 30% Source data: Planet Retail Shopology The science of modern shopping

16 2. S E A M L E S S O N L I N E E X P E R I E N C E Our shopper research revealed the need to cater for the device agnostic consumer Choice of online retailer influenced by... 62% a quick & easy to use website and checkout process 58% a website with lots of features and functionality Regardless of device, website features deemed important... 57% 56% Good product information Ease of use BASE Size: 1,597 55% 54% Good quality images Clear product reviews Source data: Planet Retail Shopology The science of modern shopping

17 3. E M P O W E R S M A R T P H O N E U S E R S Mobile provides shoppers with a powerful tool giving complete transparency of a retailer s proposition. Shoppers currently use their mobile to 47% check prices when instore 44% compare products and read reviews when out shopping BASE Size: 1,597 Source data: Planet Retail Shopology The science of modern shopping

18 3. E M P O W E R S M A R T P H O N E U S E R S With shoppers wanting to use their mobile to guide purchasing, the device is becoming the ultimate shopper companion in a price conscious country Our research in India shows us that Shoppers WANT to use their mobile to BASE Size: 1,597 55% quickly and easily compare prices 49% receive real time offer, promotions, discounts might be eligible for 45% Gather loyalty points or savings as you shop 44% Pay using your mobile at the checkout Source data: Planet Retail Shopology The science of modern shopping

19 4. U S I N G O N L I N E F O R FA S H I O N S H O P P I N G I N I N D I A Our shopper research shows us that apparel shoppers are turning to digital channels for inspiration as well as to make purchases Likelihood of using internet when shopping for fashion Very Likely & Extremely Likely BASE Size: 1,597 55% 54% Buy core essential items Get inspiration on the latest fashion trends that would suit me 48% Watch videos to get style ideas or tutorials for fashion advice 47% Buy high-street fashion Source data: Planet Retail Shopology The science of modern shopping

20 4. B A R R I E R S T O O N L I N E A P PA R E L Our shopper research shows us that similar to other markets, and indicative of the tangible nature of apparel, the biggest concerns for shoppers in India are around fit and quality Shopper view of buying clothing online Agree with statement 68% 61% 59% 54% I am concerned about the quality of clothing online I'm worried what I buy online will not fit me properly Concerned over what is on website is not a true reflection of product I like to try on the clothes instore, and then buy them online Source data: Planet Retail Shopology The science of modern shopping

21 4. B A R R I E R S T O O N L I N E A P PA R E L From the results of our research in India, the factors of importance to online apparel shoppers are centred around alleviating fears over size and fit, while linking the digital to the physical worlds Important features when buying fashion Overall importance BASE Size: 1,597 62% 59% A zoom function that clearly displays the small details of a product View a comprehensive size and fit guide 59% Quickly and easily filter products online by size, colour, style 54% See if product was available instore and online from a retailer Source data: Planet Retail Shopology The science of modern shopping

22 5. C R E AT E A C O M P E L L I N G I N S T O R E E N V I R O N M E N T Instore technology must not be used for technology s sake - solutions that are implemented must solve a problem or meet a need. 22% have used an interactive display instore to search more product ideas and suggestions 20% of shoppers have interacted with staff equipped with tablets 35% of shoppers have accessed a retailer s free instore Wi-Fi using a mobile Source data: Planet Retail Shopology The science of modern shopping

23 6. F U L F I L M E N T - A C O M P E T I T I V E D I F F E R E N T I AT O R Payment and fulfilment in India is a huge competitive differentiator From our shopper research, we know that the choice of retailer is influenced by... 61% Offered more flexible delivery times and options 61% 51% Offered same or next day delivery Accepted alternative online payments (such as cash on delivery, cash on instore collection) Source data: Planet Retail Shopology The science of modern shopping

24 Over 1,000,000 products Over 10,000 brands & retailers Over 150 product sub categories Over 11 million data points (SKUs) UK, North America or Australia view Filter by retailer, brand, price band, style, colour and pattern Track markdowns Track stock levels

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26 SHORTER PRODUCT LIFE CYCLE SHORTER PLANNING CYCLE SEASONAL BLURRING FASTER FASHION

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28 U S I N G D ATA T O I D E N T I F Y E M E R G I N G T R E N D S SPOTTED: Tapered trousers moving fast ANALYSIS ASOS: We identified a trend of some SKU S out of stock for tapered trousers 69% v s leggings 67% ANALYSIS KOOVS INDIA: We identified a trend of tapered trousers 33% (12% ASOS) and leggings 27% (66% ASOS) VERDICT: More potential to optimise tapered trousers as this will carry through to winter, and ensure correct pricing and colour WGSN INstock Retail Analytics

29 U S I N G D ATA T O I D E N T I F Y M O D E R N E M B E L L I S H E D SPOTTED: Contemporary Embellished sandals ANALYSIS RIVER ISLAND: We identified a trend of flat embellished sandals with moving into chunky sole, already showing some SKU s out of stock ANALYSIS M&S: We identified a trend of up spec leather and comfort VERDICT: More potential to optimise in high spec embellished sandals with a western twist WGSN INstock Retail Analytics

30 U S I N G D ATA T O I D E N T I F Y M E N S P R O D U C T M I X SPOTTED: Men s plain tee ANALYSIS ZARA: We identified a trend with plain t-shirts second highest mix at 46% (46% 7 mid market retailers) with printed t-shirts at 53% (53%. ANALYSIS JABONG INDIA: We identified a trend of printed t-shirts, 70% of the mix compared to just 30% plain VERDICT: More potential to optimise up spec plain t-shirts, the conservative style fits with a wider age demographic and reduces risk WGSN INstock Retail Analytics

31 U S I N G D ATA T O I D E N T I F Y F I R S T T O M A R K E T SPOTTED: New look fast selling tops kimono full price VERDICT: More potential to optimise kimono, the conservative style (light weight cardigan) fits with a wider age demographic and reduce the risk WGSN INstock Retail Analytics

32 W G S N I N S T O C K K E Y L E A R N I N G S ADOPT THE NEWNESS & INCREASE DROP SPEED OF FAST RETAILERS. INCREASE THE MIX OF CONSERVATIVE FEMININE SHAPES AND PLAY WITH COLOUR USE COMPARATIVE SHOPPING TOOLS TO COMPILE ONLINE COMPETITIVE CATALOGUES, AND MONITOR PATTERN AND COLOUR SUB TRENDS MONITOR THE COMPETITION DAILY, WHAT S YOUR NEXT PRINT VEHICLE? KNOW YOUR CUSTOMER WGSN INstock Retail Analytics

33 BIGGER DATA + BETTER ODDS

34 O L I V E R S A M W E R, R O C K E T I N T E R N E T Software, infrastructure, logistics, payment systems are the critical enablers of ecommerce. Last mile is the key to success. All needed for last mile delivery: drivers with their own bikes. Give them t-shirts and GPS.

35 Appendix

36 Online Apparel Retailers in India October 2014 A Service Marina Pinto Associate Analyst

37 Jabong.com History Jabong was co-founded in 2012 by Arun Chandra Mohan, Praveen Sinha, and Lakshmi Potluri and Manu Kumar Jain. Jabong is owned by Gurgaon based Xerion Retail Pvt Ltd which is backed by German based Rocket Internet. Revenue For FY , Jabong posted revenue of INR4.3billion (USD 73.6 million) and net loss of INR2.9 crore (USD49.2million) Strategy Jabong plans to introduce two-three private label brands in the next 4-5 months. The company has set up a full fledged design team in London that would be focusing only in creating the design. Jabong recently partnered with Swarovski Elements. With this unique association with Swarovski, Jabong will bring the Indian consumers closer to the global aspired fashion and luxury scene. By launching Next Door service which helps customers to pick their orders at the nearest coffee shops, petrol station or tour operators ; Jabong aims to target impatient customers awaiting faster delivery and attracting new customers from remote villages where courier companies cannot reach their doorstep.

38 Myntra.com History Myntra was eastablished in Febuary 2007 by Mukesh Bansal, Vineet Saxena and Ashutosh Lavania. Myntra has been recently acquired by Flipkart for an estimated USD370 million, which is one of the biggest deal in the country s e-commerce market. Revenue In , Myntra posted revenues of INR8 billion (USD134.3 million) Strategy Recently Myntra announced its plans to set up office in London in cooperation with European design studios. Myntra aims to frequently release new designs from the London studio to enhance its private brands. In 2013, Myntra acquired Fitiquette to be amongst the first retailer to introduce virtual fitting room in India. Myntra will also incorporate Fitiquette s core product within its website. Myntra is tying up with international brands like Mango and Gap to increase its web traffic. Myntra has partnered with over 650 fashion and lifestyle brands. Myntra is driving its sales through myntra coupons.

39 Snapdeal.com History Snapdeal.com was founded by Kunal Bahl and Rohit Bansal which started in February 2010, as a daily deal platform but later moved into retailing across various categories. Snapdeal.com sells products across various categories like electronics, home kitchen, automotive etc. Revenue In , Snapdeal posted revenue of INR1.68 billion ( USD28.2 million). Strategy Snapdeal partnered with Fashion Design Council of India to launch The Designer Studio. Snapdeal expects sales of INR60 billion from the fashion category by next fiscal. The e-tailer aim to provide access to exclusive and premium designer creations for customers, to meet their aspirations and help improve availability. Snapdeal is focusing on enhancing its technology and processes to improve seller experience on its online platform. It takes four hours for a seller to start selling products on Snapdeal.com.

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