Currently worth $130 billion, India's lifestyle market is on the cusp of transformative growth, driven by changing consumer behavior and technological advancements. According to a recent study by Bain & Company and Myntra, the market is expected to expand at a compound annual growth rate (CAGR) of 10%-12% to reach $210 billion within the next five years.
The e-lifestyle sector, comprised of fashion, beauty and personal care, is predicted to see even more dramatic growth, rising from $16-17 billion in 2023 to $40-45 billion by 2028.
In an interview with CNBC-TV18, Shyam Unnikrishnan, Partner, Bain & Company, highlighted three crucial factors driving the rise of the Indian e-lifestyle market: First, macroeconomic tailwinds are expected to play a key role.
As India forges ahead to become the world's third-largest economy, a surge in disposable income is likely to translate into increased spending on lifestyle segments. Secondly, the changing consumer demographic, especially the emergence of fashion-conscious Gen Z shoppers, is shifting preferences.
This demographic is attracted to organized retail channels and fast, trend-forward shopping experiences.Third, supply-side innovations such as trend-forward fashion, tech-enabled discovery, and fast delivery will strengthen the overall consumer value proposition, making online shopping increasingly appealing, Unnikrishnan said.
He noted that lifestyle products are often an entry point into online retail: Research shows that about 40% to 45% of first-time online shoppers make a lifestyle product their first purchase, Unnikrishnan said.
These consumers tend to view an average of 25 to 30 products before making a purchasing decision, he added, making influencer content and high-quality imagery crucial in converting these viewers into buyers.
Interestingly, while average transaction size may be small, frequency and conversion rates are trending upward, especially among Gen Z shoppers who are expected to have greater purchasing power as they advance in their careers.
Nandita Sinha, CEO of Myntra, highlighted that the Indian e-lifestyle market is rapidly evolving with the rise of Gen Z shoppers. Sinha highlighted that this demographic, which currently comprises 60 million e-lifestyle shoppers, is particularly inclined towards digital-first brands. Around 25% of these shoppers make up to nine purchases from emerging or digital-first brands compared to millennials.
Sinha noted that both demand and supply are converging towards a preference for trend-first fashion and wider assortment, driven by the desire for faster refresh cycles and innovative product offerings.
Check out the accompanying video for the full discussion.
