MUMBAI: The Aditya Birla Group is set to launch an online fashion retail venture selling apparel, footwear and accessories, taking on existing players such as Jabong and Myntra and highlighting the growing appetite among India's cash-rich conglomerates to enter sunrise businesses. The fashion venture, it seems, is a prelude to the group's bigger plans for the e-commerce sector.
"Fashion e-tailing will be the group's launch pad into the e-commerce space, which offers multiple opportunities," said a person familiar with the plan.
The $40-billion group is putting together an e-commerce team headed by former Mckinsey executivePrashant Gupta. Gupta, who joined the Group in 2010, was given the task of evaluating opportunities in the e-commerce space early last year.
The basic structure for the new portal and its branding will be ready in another six weeks. "We are evaluating several options for branding," said the person.
The Group is already into fashion business through Madura Fashion & Lifestyle, which sells brands such asLouis Philippe, Van Heusen, Allen Solly, Peter England and People.
The new online venture will be independent of this brick-and mortar business.
Marketing and merchandising professionals as well as e-commerce and technology experts are being hired to launch the venture at the earliest.
The metals-to-telecoms group's proposed entry into e-tailing is in line with Chairman Kumar Mangalam Birla's plan of investing in business opportunities which can give substantial returns in the future. Ecommerce is one of the fastest growing sectors in India, where valuation of companies like Flipkart and Snapdeal has reached multi-billion dollars in a matter of few years.
By 2020, India's online retail market is projected to grow to $45 billion, from $2 billion in 2013. Within this sector, fashion and apparel will grow faster, said a Motilal Oswal research report on e-commerce.
Meanwhile, competition is heating up in the fashion e-tailing market. Amazon is playing catch up with market leaders Jabong and Myntra by launching its own fashion labels.
The Aditya Birla Group had turned to consumer-facing sectors such as telecom and retail in the late 1990s, after building massive capacity and boosting revenue in traditional commodities businesses. The Group made a big-bang entry into the retail sector by launching its own brand, more, in 2008, following Kishore Biyani's Big Bazaar that changed the shopping habits of urban consumers. A year before that, the conglomerate moved then chief financial officer Sumant Sinha to lead the push into organised retail.