Get All Access for $5/mo

Future of Fashion Business Semi-organized retail is very low margin-based, a wholesaler may work at 5-20% gross margin on his selling price and a retailer between 15-30%

By Arvind Saraf

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.


Old Delhi's Nai Sadak is a very busy market. One part of the street starts with Chawri Bazaar side with booksellers & publishers, gradually making way for women's ethnic wear retailers. These small stores have shimmering lehengas & sarees hanging outside attracting retail customers from Delhi & around. Often families come for a wedding shopping, seated them on gaddis in these shops while being shown the samples. With some retailers, being able to get inside the store, identify & pick your garment, and get it billed would feel like an achievement. Wholesalers and agents have larger, sometimes multi-storey, offices and warehouses in the numerous sideways alleys or streets.

India's apparel business is quite peculiar – a few characteristics define it:

  1. Branded retail, in the form of known outlet chains, makes up only a small fraction of the actual retail business. These brands are known by virtue of their presence in shopping malls or through their investments in above-the-line advertising.

  2. Most of the retail is dominated by small retailers, often single store proprietorship firms, employing up to 5 people. Manufacturing hubs such as Surat, Ahmedabad, Mumbai, Delhi, Jaipur, Tirupur etc typically supply their products to local wholesale hubs in most major city/district hubs, and the retailers buy from these wholesalers.

  3. Wholesale brands exist in these categories. These brands are typically family-run, based on the manufacturing hub, have in-house design & product setup, and effectively leverage the production ecosystem around their hub to create the highest quality products & sell to these wholesalers. End customers may not know them very well because they don't do retail themselves.

  4. Throughout the semi-organised distribution channel - product freshness is high, communication channels on new products & old product inventory status are unorganized – often a phone or WhatsApp based, and in the absence of institutional credit – suppliers finance the retailers or wholesalers by selling on credit.

Semi-organized retail is very low margin based. A wholesaler may work at 5-20% gross margin on his selling price and a retailer between 15-30%. This leads to the following problems:

  1. Most transactions are on supplier credit. Excessive supplier competition further eats away the supplier's gross margin or forces the supplier to give unfavourable credit terms to his buyer.

  2. Strong manufacturers & wholesalers require design/catalog freshness, constantly churning out older designs, and that further puts the pressure on them to sell out faster.

  3. Retailers & wholesalers constantly look out the cutting edge designs & catalogues, and manufacturers would like faster feedback on their catalogues to help plan inventory replenishment or liquidation.

B2C eCommerce came about to effectively address these issues, extending organised retail outreach. Retail is fundamentally different from manufacturing, requiring different inventory structures & skills - which means that fashion manufacturers don't themselves directly e-retail online. B2C eCommerce hasn't been able to match the cost structures of offline retail, still remaining a single-digit percentage of the overall

Social commerce came up to fill in the last mile retail gap, extending it by creating home-based women micro-entrepreneurs. However, both existing retailers & social sellers need sourcing from the manufacturers & wholesalers to be aggregated. Managed fashion-focussed B2B marketplaces have come up to enable direct transactions between manufacturers & retailers. Offline business transactions are still being done low-tech & without a common platform, though OkCredit and KhataBook are now trying to digitise offline transactions, albeit mostly currently B2C.

The industry's manufacturers, wholesalers & retailers are threatened by the organised sector and must compete with it, using trends data to increase production & sales, reduce dead inventory, and credit defaults. This requires the transactions to be digitised & brought on a single platform, real-time & readily shared between business buyers & sellers. This allows a merchant to identify fast-moving styles for repeat product or purchase, non-moving styles for production, and manage credit risk buyer wise effectively. A manufacturer can reach all relevant retailers - and a retailer sees machine-learning-based recommendations on styles/catalogues to buy, based on market trend and his own prior selling behaviour to source better.

Individual manufacturers, wholesalers or retailers are not equipped to build & drive adoption of technology & system for such a platform, let alone build value additions on top it. Instead, new mobile-first technology-enabled platforms, coming from experience in the industry, are already emerging - cross leveraging marketplace & software use cases to drive adoption & stickiness. Solutions did right have the potential to capture other emerging markets globally too.

Arvind Saraf

Founder, Wishbook

Arvind did his high-school from Delhi Public School, RK Puram, Delhi – from where he appeared for
& scored 1st rank IIT Joint Entrance Exam (JEE) & Roorkee Engineering Entrance exams. He
did his B.Tech in Computer Science from IIT Kanpur. He immediately went for his Masters & PhD in
Electrical Engineering & Computer Science to Massachusetts Institute of Technology. He joined the
recently setup Google India's Bangalore office as an intern in 2004, and then joined Google as full-time
employee in early 2005.

He left Google in April 2008, and along with 2 classmates, co-founded Swasth India – aimed at
providing healthcare for the poor in India. Swasth was one of the first VC investments by Ratan Tata.
As part of Swasth founding team, Arvind was involved in defining the Swasth India & Swasth
Foundation's vision, mission, governance structures, led the development of Swasth's core MIS and
was co-consultant on the project with ICTPH.

He moved out of Swasth in 2012 and returned to Surat, rejoining the traditional family-oriented textile
brand & business, Triveni Sarees. He took the brand online – building a new team & processes. His
initiatives brought about more efficiencies in the traditional core manufacturing management processes,
aimed at better tracking & efficiency, and newer approaches in marketing & outreach. With Triveni's
better-defined vision & mission & improved processes, Triveni expanded into other areas &

He recently founded Wishbook, a company digitizing traditional B2B communication & transactions
in the apparel space, all the way from manufacturers to retailers. Wishbook is backed by Info Edge, the
parent company of Wishbook now already has more than 1 lakh small & medium retailers
in its mobile app, fundamentally reducing the information gap & changing the way they do business.

News and Trends

Dee Piping Goes Public: Announces Initial Public Offering

Dee Development Engineers Limited, commonly known as 'Dee Piping,' has announced its transition into a public limited company.

Business Solutions

Increase Productivity with This Microsoft 365 Subscription, Now $25 Off

It can make the entrepreneur life a lot easier.

News and Trends

Unifi Capital Launches Two New Funds at GIFT City

Rangoli India Fund and G20 Portfolio are the two new funds launched by Unifi Capital, via its subsidiary UIML in GIFT City, to expand international investment opportunities.

Business News

Apple Pay Later Is Ending. Here's What's Taking Its Place.

The program was available for less than a year.


I've Grown a High-Performing Team in Just 2 Years — Here's are 5 Growth Strategies I Learned

A team's strength lies in its people's individual skills and how they synergistically come together.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.