Birla eyes $1 billion apparel e-commerce business

Late to the e-commerce party, AV Birla group is now looking to rev up plans in the sector.

The company on Friday forayed into fashion and lifestyle e-marketplace with the launch of abof.com (all about fashion).

It is currently evaluating potential areas in the e-commerce space for a foray.

"This (e-commerce) is something that requires a lot of time and study. Having said that it's not necessary that we make anyother play in the e-commerce space," said Group chairman Kumar Mangalam Birla.

abof.com that sells apparel, footwear and accessories for the millennial men and women is first e-commerce venture of the group that will retail third-party products.

It also runs www.trendin.com, which is an online store for its in-house brands like Louis Philippe, Van Heusen, Allen Solly, Peter England, Pantaloons and People.

Widening the definition of what else could fall into the definition of a sunrise sector, Birla said the country requires huge infrastructure development in the years to come, and the cement sector fit well in this category.

"E-commerce is for the future so is telecom which certainly qualifies to be a sunrise sector. We are constantly scanning the environment, but there is nothing concrete that I have to talk about as of now," said Birla.

While the e-commerce space has seen frenzied activity with a variety of online businesses getting launched, Birla said there is lot more scope left.

The group will look at e-commerce play in areas where it has strong presence.

Under the strategy, the group, forayed into fashion e-marketplace to capitalise on its position as India's largest fashion player through Madura Fashion and Pantaloons.

"It made sense to enter into fashion e-commerce to strengthen our stronghold in this business. We see the potential to build another billion-dollar business of the group in this space," said Birla.

On how he plans to differentiate the offerings from the products being sold on other e-marketplaces like Flipkart, Myntra, Jabong, Amazon etc, Birla said a curated range of merchandise (smart casuals), differentiated shopping experience and non-discounted pricing will be key to abof's business model.

abof.com is being housed in a separate, privately held company called Aditya Birla Online Fashion Pvt Ltd and is being internally funded for now. On getting private equity investors on board, Birla said the group is not averse to getting financial investors at a later stage. The new venture will also have no synergies with the trendin business as both will cater to a completely different set of consumers.

"While abof is targeted at the millennial generation that wants fast fashion but is also price cautious, trendin is largely premium. The e-marketplace currently has 5,000 options from 55-odd third party brands in addition to curated collection from the abof brand. Interestingly, abof will also be the online-only fashion and lifestyle brand to be offered by the group," said Prashant Gupta, president and chief executive officer, Aditya Birla Online Fashion Pvt Ltd.