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Nearly 50 digital-first fashion brands are expected to scale beyond Rs 250 crore in revenue terms by FY28, a report titled, Digital Fashion Disruptors: Navigating the Future of Fashion, said. 

The report by Bain & Company and Aditya Birla Fashion and Retail backed house of brands, TMRW, estimates that nearly 700 online-first brands exist in India today, with less than 10% having scaled beyond Rs 50 crore in revenue terms. 

Digital-first fashion brands are likely to grow by 35% to a $10 billion market opportunity by FY28 from the current market size of $2.4 billion, the report estimates. These brands will likely command a 29% share of the online fashion market, estimated to grow to nearly $35 billion by FY28, according to the report. 

“Digital disruptors catering to underserved niches have done well and managed to gain leadership. This includes verticals such as expressive wear, ethnic wear, which is largely dominated by unbranded players, kids wear, etc,” Radhika Sridharan, Partner at Bain & Company, told YourStory.

She added that the growth in digital-first brands will be driven by purchases from GenZ and millennial buyers, who have a propensity to shop online for these categories. 

While the barrier to entry is low in fashion, challenges of assortment complexity, new category expansion, running efficient operations, and investment in brand building can pose a roadblock.

“Innovation is just not on the brand side but also the supply side—whether it is either agile supply chains you are able to refactor and innovate around or tech and data science led innovation with weekly drops and freshness and newness which the consumer wants. If you are not geared up for the backend, you will have to build on your own for the brand,” said Prashanth Aluru, CEO and Co-founder of TMRW. 

While brands in beauty and personal care have managed to attract more funding over the last five years at $950 million, the investments into apparel brands stood at $430 million, the report highlighted, adding that apparel is expected to attract more investments as more brands scale beyond the Rs 100 crore mark.