Online marketplace Amazon is seeing a clear trend of consumers buying more expensive clothing, watches, beauty products, and pricey footwear on its platform. This is a sign that e-commerce platforms are now seeing a shift from value-focused purchases to more expensive ones.
“There is a very clear trend on premium products across customer segments—beauty, fashion, even on mobile phones, people are trading up and that comes from more disposable income as well as a larger middle class,” said Saurabh Srivastava, vice president, Amazon Fashion India, who looks at both fashion and beauty in the online beauty marketplace.
Fashion and beauty is one of the largest and one of the fastest-growing categories on Amazon India.
“The online fashion and beauty market, by some estimates, is already over $11 billion dollars; it is estimated to grow at a 35 per cent CAGR till 2028. So this is a huge opportunity,” Srivastava said as the company announced its latest fashion and beauty trends report.
According to Srivastava, fashion and beauty have been a key magnet for first-time Amazon consumers. Amazon’s largest customer acquisition category is now fashion and beauty.
International footwear and athleisure clothing have witnessed increased demand on Amazon. To be sure, fashion has surpassed mobile phones as the single most important category for internet retailers. According to a May 2023 note from consultancy firm Redseer, although mobile phones dominated the category divide in FY19, fashion is now the single largest category, while beauty and personal care, groceries, and home are the fastest expanding.
Srivastava said Tier-2 and Tier-3 markets are now a source of growth for the company’s fashion and beauty business.
“More than 50 per cent of our customers are now coming from Tier-2 and Tier-3 cities. In these markets, access to products is also very important,” he added.
