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The Falling Reach of Fashion Apps

I can’t figure this out. Why is the reach of Fashion Apps falling? The reach of any one company can fall – that’s actually quite common. But we rarely ever see reach fall for an entire sector. We could possibly mark this off as the market receding from its Diwali highs - but a 7% fall is high even for that.

Do users increasingly not feel the need to download an app?

Or has fast fashion become so fast that users don’t want to be tied in to one platform? With the emergence of so many new players – deals are a plenty. The customer is winning but who else is?

Myntra is still reigning supreme but with the entry of ABOF and TataCliq into the fashion e-commerce space will there be further consolidation in this space? Industrial houses like the Birlas and the Tatas are long term players. Once committed, they are difficult to dissuade and, unlike their competitors – they face no exit pressure. I wonder if the ultimate beneficiaries of fashion e-commerce in India be the traditional brick and mortar industrialists.

Alternatively, with the emergence of 4G - the shopping experience on the mobile web has improved drastically. Have users noticed? If so are App downloads just vanity metrics? 

For some time now, App downloads have been the metrics entrepreneurs were told & incentivized to follow. But the cost of customer acquisition is rising and retention is falling. When we realize that we cannot go on chasing downloads at the expense of financial success - Will e-commerce revert to the mean?

What I mean is - Unit economics and revenues have had little to do with valuations. Some of this is a result of how much money a company needs vs. how much the founders are willing to dilute. But even term sheets & funding milestones were being pegged to the number of downloads entrepreneurs could get for their app. Will valuations eventually revert to more traditional metrics (like profit & loss) in the coming months?

What does this mean for the many entrepreneurs who devoted their capital and effort to building an App first company?

Focus on retention - it’s better to be loved by few than to be liked by all.


Thanks for your time,
Ashish Kapoor
Team KG