Aditya Birla Group starts online fashion marketplace sans deep discounts

With abof.com, the $41 billion-conglomerate will take on the likes of Jabong and Myntra. More ecommerce initiatives may follow

Published: Oct 16, 2015
Aditya Birla Group starts online fashion marketplace sans deep discounts
Kumar Mangalam Birla, chairman, Aditya Birla Group

The $41 billion-Aditya Birla Group, with interests ranging from telecom to metals and mining, has thrown its hat in the ring that has, to date, been dominated by startups backed by venture capitalists: The online fashion marketplace.   

The Kumar Mangalam Birla-led conglomerate on Friday launched abof.com , an online fashion portal that will sell apparel, footwear and accessories. According to the group, products that will be sold on abof have been specially curated to cater to the fashion needs of the so-called ‘millenials’, a group of individuals who were born in the 1980s and 1990s. Also, within this group, the online retailer will specifically target customers in the 18-25 age group.   

Significantly, the new online retail venture will not stock too many products from the Aditya Birla Group’s existing fashion retail brands such as Van Heusen, Louis Philippe and Peter England, which are sold through the group’s brick-and-mortar retail stores, as well as Trendin.com, its existing online venture meant to promote the retailer’s in-house brands. According to Aditya Birla Group chairman Kumar Mangalam Birla, these are more “mature” brands. Brands like Van Heusen and Louis Philippe mostly cater to middle-aged men and women, especially with their collection of formal and semi-formal wear.   

Abof will be more of an online fashion marketplace that will sell apparel and accessories to the country’s youth. To begin with, it will stock 55 brands, including external ones like Jack & Jones and Being Human, in addition to its own private label, also called Abof.  

Prashant Gupta, president and CEO of Aditya Birla Online Fashion Pvt Ltd, the closely-held holding company for Abof, says he wants to position Abof as the “Apple” of online fashion retail, implying that it would not cater to the masses and focus on a select target audience at specific price points instead.  

In keeping with this philosophy, Abof will also differentiate itself from other fashion e-retailers like Myntra and Jabong by staying away from deep discounts. Online retailers across categories have offered steep discounts on products they sell in India in a bid to attract customers.  

“We have been working on this offering for nine months and believe that with good marketing, content and products on offer, we can attract customers, even while staying away from deep discounts,” Gupta said.  

The Aditya Birla Group is the largest fashion retailer in the country, operating through entities like Madura Fashions and Pantaloons, which the group acquired in 2012 from the Kishore Biyani-led Future Group. On May 3, the group announced that it would be merging Madura Fashions with Pantaloons.   

Abof.com will also differentiate itself by putting a proprietary fashion feed on the landing page of its website (on the lines of what Instagram offers), with suggestions on latest fashion trends for users; instead of the usual deals of the day that other ecommerce players put on their home page. Other innovations include a 3D virtual trial room for customers and a fashion quiz that will enable Abof to understand the fashion needs of individual customers and throw up product suggestions accordingly.

Going forward, the Aditya Birla Group is going to lay significant emphasis on growing its ecommerce portfolio as a sunrise business sector.  

“Our estimates suggest that by FY20, ecommerce could be as large as $50 billion in India, or more,” Birla said. “Some parts of ecommerce are rather crowded with intense price competition. We decided to focus on more specific vertical spaces where a category specialist player can compete successfully. We have substantial experience in the offline fashion space where we are the largest player. So that made online fashion retailing an obvious choice for us.”

Birla said Abof.com was open to roping in a financial investor at a later stage and that his group will also evaluate other sectors where it can have an ecommerce play.  

The group didn’t elaborate on the investment that it has put in to establish Abof. “Though ecommerce may not be a sizeable part of the group’s turnover eventually, it will constitute a significant portion of the group’s valuation,” Birla said.

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