Myntra, Zara to cash in on Gen Z spending as India’s lifestyle market heads to $210 billion

India's fashionistas are having a moment. The domestic lifestyle market, comprising apparel, beauty, accessories, and footwear, is poised to balloon to a staggering $210 billion by 2028, according to a joint report by Bain & Company and Myntra.

Currently valued at $130 billion and projected to expand at a compound annual growth rate (CAGR) of 10-12%, this translates to a potential windfall of $80 billion in incremental spending, driven by a confluence of factors.

Gen Z: The driving force

Leading the charge are India's digital-savvy Gen Z shoppers, born between 1997 and 2012. These fashion-forward consumers, numbering around 60 million, are heavily influenced by the latest trends and social media influencers. Their insatiable appetite for new looks is reflected in their purchase frequency—eight to nine times a year compared to the national average of five to six.

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Currently, Gen Z accounts for 20-25% of the online lifestyle market, valued at around $4 billion in gross merchandise value. While they transact more frequently, their individual order values tend to be lower.

Nandita Sinha, CEO of Myntra, emphasized the influence of Gen Z on fashion trends. “They are very, very exposed to what's happening across the globe in terms of trends and styles. They want to have a new look every time they step out, and that's driving the frequency of purchase. They also make up almost 20-25% of the overall e-lifestyle category today,” said Sinha.

E-commerce boom and online shopping

India's online lifestyle market, currently estimated at $16-17 billion, is expected to surge to $40-45 billion by 2028. Fashion remains the undisputed king of e-commerce, constituting a whopping 75% share. Accessories and women's apparel are projected to witness the fastest growth within this segment.

The report highlights the significance of online shoppers in the lifestyle category. In 2023, over 175 million customers across India shopped for lifestyle products online, averaging six to seven transactions annually. For 40-45% of first-time e-commerce shoppers, lifestyle is their initial purchase, making it a crucial gateway category for e-retail.

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“These online shoppers are visiting more platforms and visiting them more often; these shoppers are also completing purchases over a shorter duration. Deeply entrenched shoppers (defined as those who spend greater than ₹50,000 annually on a platform) visit their preferred platform at least once a day on average, and purchase over 25 times per annum versus the market average of six to seven,” the report noted.

Shift from unorganized to organized retail

The trend towards organized retail will be another significant contributor. While 66% of the overall lifestyle market remains unorganized offline retail, the organized segment is projected to grow 15-20% annually until 2028.

This demand has also intensified competition in the market, with large foreign retailers like H&M, Uniqlo, and Zara scaling their business in response to greater demand for clothing. Homegrown retailers such as Zudio, Reliance, Max, and Shoppers Stop are also expanding their store networks. Simultaneously, online commerce players including Amazon, Nykaa, Ajio, and Myntra are diversifying their offerings.

“So there's going to be an $80 billion incremental sales—within that we expect fashion to grow significantly. Affluence, growth, premiumization, greater access to brands, and also a growing shift towards organized channels are some of the drivers that will drive this growth,” said Shyam Unnikrishnan, partner at Bain & Company.

Growth prospects

The good news isn't confined to major cities, with growth in lifestyle retail to be distributed across the country. The report noted that cities beyond the top 50 already contribute two-thirds of India's lifestyle consumption. 

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This expansion will be supported by easing short-term inflationary pressures and structural demand shifts, including rising incomes, the growth of fashion-forward, digital-native Gen Z shoppers, and increased demand for organized-branded products.