Digital disruptor brands are poised to outpace the growth of the online fashion sector, currently valued at $2.4 billion and projected to reach $10 billion by FY28, with a forecasted 35% compound annual growth rate (CAGR). 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, attributes this trend to consumers’ preference for exploring new brands and the innovation driven by digital-first companies.
The overall online fashion market is expected to reach nearly $35 billion by FY28, with digital disruptors holding approximately 29% of the market share. Ms. Radhika Sridharan, Partner at Bain & Company, notes that digital disruptor brands have achieved a 33% growth rate over the past four years and are likely to expand their share of the fashion market, particularly among younger consumers who show a strong inclination to try and purchase these brands.
As new digitally-led businesses expand and scale, previously fragmented sub-categories like ethnic wear and kids’ wear are undergoing significant transformations and are predicted to experience substantial growth in the next five years.
Website and app data analysis indicates that these segments drive 70-80% of the traffic to digital disruptors, with Gen Z accounting for 30-35% and Millennials for 40-50% of total traffic. Moreover, a consumer spending study reveals that 24% of individuals aged 18-24 purchase from brands considered digital disruptors, compared to only 13% among those over the age of 45.
The report predicts that by FY28, 50 digital disruptor firms will generate revenue exceeding $33 million (Rs. 250 crore).
