Digital disruptor brands are likely to reach US$ 10 billion by FY28: Report
- IBEF
- September 8, 2023
With a projected 35% compound annual growth rate (CAGR), digital disruptor brands are expected to outpace the growth of the online fashion sector, which is currently valued at US$ 2.4 billion and is predicted to increase to US$ 10 billion by 2027-28 (FY28).
A report titled “Digital Fashion Disruptors: Navigating the Future of Fashion” by Bain & Company and TMRW House of Brands, a venture of the Aditya Birla Group, claims that this trend is being driven by consumer preference for experimenting with new brands and the innovation from digital-first brands.
The whole online fashion market is forecasted to increase to nearly US$ 35 billion by FY28, with digital disruptors accounting for around 29% of the market share, according to the report.
As per Ms. Radhika Sridharan, Partner at Bain & Company, the digital disruptor brands have achieved a 33% growth rate in the last four years and are expected to increase their share of the overall fashion market. Further, she added that the young customers exhibit great prosperity to try and purchase these brands.
With the expansion and scaling of new digitally-led businesses, certain formerly fragmented sub-categories, such as ethnic wear and kids wear, are undergoing considerable transition and are predicted to experience outsized growth over the next five years.
According to the report, website and app data analysis reveals that these segments account for 70-80% of the traffic to digital disruptors, with GenZ accounting for 30-35% and Millennials for 40-50% of the total traffic.
In addition, a consumer spending study shows that 24% of people between the ages of 18-24 buy from brands that are considered digital disruptors, compared to only 13% of people over the age of 45.
According to the report, 50 digital disruptor firms will generate more than Rs. 250 crore in revenue by FY28.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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