Lifestyle has inked a strategic partnership with Flipkart Group to sell its private labels available on the online platform, leveraging its reported customer base of over 160 million users.
Lifestyle International MD Vasanth Kumar told FE the alliance is aimed at generating 15% of the retailer’s sales from online channels in the next five years from 2%-3% currently. “We are limited in terms of online reach and would like to operate in the e-commerce space. This can only be done through this partnership as Flipkart is the leading channel,” Kumar said.
Lifestyle’s entire catalogue of products (including new arrivals) will be available on the Flipkart and Myntra platforms. Satish Meena, senior analyst at Forrester Research, said Flipkart along with Myntra and Jabong are the preferred destinations for online fashion and account for around 50% market share, with Amazon trailing. Both Amazon and Flipkart are looking to attract more brands and continuously focusing on partnering with offline stores. Meena said he expects more retailers to formulate similar partnerships in the coming days.
Rishi Vasudev, senior vice-president and group head, fashion, at Flipkart, told FE the e-commerce major will be able to widen the choice of products for its customers through the alliance. “We are constantly struggling to offer consumers a better selection. We are over 70% of the online market in fashion (with Myntra and Jabong) and it is growing at a very healthy rate,” Vasudev said.
Analysts, however, said in partnering with Lifestyle, which is owned by Dubai-based Landmark Group, Flipkart may have broader ambitions. “Given the fact that Landmark has a grocery business called Spar, Flipkart in the long-term may extend the collaboration to non-apparel sectors. Spar could be a good model for Flipkart to look at FMCG and fresh foods,” an analyst said on condition of anonymity.
Lifestyle currently has 78 stores across 44 cities. The company’s aggressive e-commerce push comes at a time when the retail sector is witnessing a slowdown and high mall rentals have impacted business expansion, analysts said. According to an ANAROCK report, rentals eat away almost 15%-20% of a retailer’s overall revenue on an average, going up to as much as 25% in prime locations. Seven years ago, the rental costs ranged anywhere between 7% and 8% on an average. On pricing, Vasudev said price parity will be maintained between online and offline channels. “ What Lifestyle tells us is that they would be maintaining the same price online and offline for a new range,” he said, adding that for for old inventory, there may be some discount.