Report on Fashion 2.0 Business Model

This business is about bringing a new apparel online tailoring store to provide easy and unique solutions for tailor-made clothing.  The business focuses on bringing a website and tailoring the app to Indian market customers to provide them with numerous options in the apparel range. Fashion 2.0 aims to solve several customer problems related to perfect stitching by building a vast network that is otherwise missing in a simple online apparel store that brings a limited choice for its customers.

GROUP PROJECT
PROPOSED BUSINESS MODEL REPORT
GROUP REPORT PRESENTED BY : FASHION 2.0
Wasam Umer - 10165710
Burhan Ahmad Butt – 10150322
Alagiri Balaji Gowthamy – 10170706
Sanjay Dhirubhai Dudhat – 10175439
Kingsley Chukwuemeka Ugboaja - 10166204
OCTOBER 31, 2021

Table of Contents
Introduction.....................................................................................................................................3
Aims And Objectives:.......................................................................................................................3
Industry Profile................................................................................................................................4
Market Gap......................................................................................................................................4
Market Opportunity.........................................................................................................................5
Why Apparel Segment?...................................................................................................................5
Pestle Analysis.................................................................................................................................7
Value Proposition Canvas................................................................................................................9
Business Model Canvas..................................................................................................................11
Conclusion......................................................................................................................................14
References.....................................................................................................................................16
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Introduction
This business is about bringing a new apparel online tailoring store to provide easy and
unique solutions for tailor made clothing. The business focuses on bringing a website and
tailoring app to Indian market customers to provide them with numerous options in apparel
range. The reason behind this business plan is the increasing trend of online shopping. In this
context literature has also stated that with each coming day, online shopping activities are
increasing and the reason behind this popularity is search-cost saving, ease in choosing a
product and convenience that it brings to a customer (Bakos 1997; Wimble et al. 2016). The
segments targeted for this business are female customers having age bracket of 10-45 years,
fashion freaks, field partners and those people who find difficulty in finding right size for them
for their customized stitched clothes. This business will not only concentrate on fabric dealers,
cloth manufacturers, key retailers, weavers, fashion schools and raw material suppliers so that
the users of our website and app are retained within one software for a longer period to
complete their entire purchasing journey. This business aims at solving several customer
problems related to perfect stitching by building a wide network that otherwise are missing in a
simple online apparel store which brings a limited choice for their customers.
Aims and objectives
The main objective of Fashion 2.0 is:
 To satisfy diverse tailoring needs of consumers by providing them with wide services
and offerings to make a great it a great experience.
 To make wide presence around different economies while adding more services and
products to the company by the end of 2026.
While the aims of Fashion 2.0 are:
 To provide a hassle-free experience to consumers by bringing wide range of their
desired brands and services on its portal under professional tailors.
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 To become one of the most customer-centric organization around the globe by raising
the bar of consumer’s shopping experience continuously.
Industry Profile
It is a lucrative industry and provides employment opportunities to almost three
hundered million people around the world, it represents a global business that is worth 1.3
trillion dollars (BOF & McKinsey, 2019). The reason for choosing this industry besides our
personal preference is that this industry is substantially diving the world’s GDP (BCG, 2019).
From this wide industry, our business focuses only on the apparel industry. In that, our focus is
further narrowed to female apparel solutions as we are coming up with the new business idea.
Elaborating on the selected industry further, we have chosen the Indian economy to tap the
apparel industry with our business idea. Online sales are also seen showing rising graphs for
many businesses around the world and equally in India. According to India Brand Equity
Foundation (2020), under the Digital India program, the internet connection number rose to
776.45 million in 2020.
Market Gap
The textile and apparel industry, being one of the oldest industries, has shown us
numerous developments in the country and India now this market of textile and apparel
is more than the US $133 billion value (IMARC Group, 2021). The Indian population still
doesn’t find their every apparel solution online. Some people find size issues, some
couldn’t find a suitable design at the hour of need. Many consumers after buying a piece
of cloth must go and look for tailors to make it a right fit for their body. Fashion 2.0 has
considered this gap to come up with a fine solution to this. Also, the recent COVID-19
pandemic has made it more convenient for consumers to order their products and
services from online platforms and this convenience factor is also taken into account by
Fashion 2.0 as it brings manufacturers, fashion brands, and tailors under one single
online platform. People who need oversizing clothes and do not find them from brands
can simply search for a manufacturer of cloth on our website and app, buy that piece of
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cloth, and on the same platform, they can look out for a tailor, gave their measurements
and ask for services of sewing their clothes. This market gap will be efficiently covered
by our business in coming years.
Market Opportunity
Having an upward growth trajectory of the e-commerce industry, India is a country that
keeps potential markets for upcoming businesses in this sector. Here in this country half of the
population is under the age of 25 years representing one of the biggest consumer groups that
are expected to spend drivers in coming years and making the apparel industry quite attractive
for businesses.
According to reports published by Statista Research (2021), some facts and figures are stated
below which reflects growth opportunities for our online apparel business in the Indian
economy.
 The apparel market of Indian women ranked as the 6th largest apparel market of
women in the world during last year.
 Statista research (2021) stated about the online apparel industry that by 2023, 6 percent
of the total revenue of the apparel industry will be contributed by online sales.
 More than rupees 1313 billion sales were recorded for women's apparel in the domestic
market in 2018.
 The market volume of the Indian apparel industry is estimated to grow with an annual
rate of 10.18 percent from 2021 through 2025.
 By 2025, user penetration is expected to be around 49.1 percent, and average revenue
is expected around $ 22.92 per user.
Why Apparel Segment?
India is a land of multi cultures, and this diverse population is seen having their religions
and cultural festivals more often. A recent survey of Statista research about Indian consumers
also reflected that 67 percent of total respondents said that they will likely make apparel
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purchase in the upcoming Diwali. This survey showed that in the fashion industry, the apparel
segment is more attractive than any other segment and that is the reason we have decided to
select the apparel industry
PESTLE Analysis
Political:
Fashion 2.0 is an online platform offering apparel solutions to its customers’ needs to
consider political factors affecting its operations. In the Indian economy, the draft policy for e-
commerce states that e-commerce players should operate under the regulations of deep
discounting making Indian regulation more stringent for businesses. This political aspect is very
important for our brand because our business aims at providing more solutions to consumers
for their pains. Other government legislation that will be impacting our business includes
initiatives like “Digital India” and “make in India”. In 2020, the Indian government also brought
certain amendments in “consume protection rules” for e-commerce. This law mandated that
more information must be shared by e-commerce platforms related to the seller and source of
the product.
Economic:
India’s economy is growing rapidly, and it is a huge economy that assures investors
about the continued marketplace. Patibandla (2014) stated that the Indian government
requires now that foreign companies operating in India must use a specific percentage of
resources and goods for retailers and manufacturers to sell their products. In the Indian
economy, the disposable income of consumers is improving for buying their desired products
and services via online platforms. In this regard, Kumar (2017) also stated that nearly a hundred
million individuals of India by 2018 would have gone digital and these facts will facilitate the
growth of fashion 2.0.
Socio-Cultural:
Sixty percent of the total GDP of India is contributed by the urban population, and most
population of India is rural –that is almost sixty-nine percent (Rath & Samal, 2015). It was also
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stated that in the coming 15 years, almost seventy-five percent of total GDP will be contributed
by the urban folks of India (Rath & Samal, 2015). But the recent interventions of the Indian
government about developing its rural areas will also be an equal opportunity for businesses to
consider it. This made it important for businesses to expand their logistics towards rural areas
also instead of concentrating only on urban areas.
Environmental:
Even though our business Fashion 2.0 is an online business, still its operations are
subjected to certain environmental aspects. According to Marron and Toder (2014), currently,
the growing concern of both consumers and government is about low carbon emission and
sustainable business practices. The logistics and transportation of online businesses for
delivering their products and services to consumers leads to pollution by high fuel burning.
Other negative impacts may include IT infrastructures and energy consumption by systems.
Legal:
In India, the legal grounds for the e-commerce sector are still evolving. It has been seen
that still many litigations are seen involved against some online companies. There are a
significant number of cases against Myntra (online retail)-nearly more than 322 cases. Most of
these cases are related to deep discounting by Myntra. Not only has this, but the recent Zomato
breach about consumer data theft also led to rising concerns of consumers about their data
privacy from online businesses (Kumar, 2017). Some important legal aspects for online
organizations are FDI model policies, consumer data protection, and foreign exchange rules.
Besides these, labeling, shipping, sales, packaging, return policies, and fraud are also crucial
legal aspects. Fashion 2.0 must abide by all these legal factors to avoid lawsuits.
Technological:
Online platforms in India are seen implementing data analytics systems for making their
businesses perform efficiently. According to Kumar (2017), by 2019, many consumers will be
using e-payment methods for their purchases for the convenience of such a method. Many e-
retailers are also using technologies like data mining and artificial intelligence in India.
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Augmented reality can also be used for making a connection with consumers. Customers are
getting more aware of technologies and programs of the Indian government such as cashless
economy, BharatNet, and Digital India are adding more to it.
Value Proposition Canvas
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Figure: 1.1
Customer Job(S)
In this sector, the customers seek to keep themselves around new trends and styles so
that they can move around with more confidence in their appearance while having
comfortability with their wearing solutions, selected by their own choice. So customer job
includes comfortless, custom fit and customized designs.
Pain
Customers of Fashion 2.0 faced pains in the form of delays in delivery. Also, customers are
facing issues in taking measurements. Many customers want to shop but lack of technology
awareness hamper their desire and sometimes there are glitches on the website that
disappoint the customers and hence they kill their desire. Also, customers find return/ change
policy of Fashion 2.0 a pain and looking towards fashion 2.0 to come up with solution.
Gain
In customer profile, gains reflect the expected benefits of a customer that results in their
delights. Talking particularly about fashion 2.0 customer’s online shopping experience about
clothing solutions, customers are getting gains in the form of saving their time as they don’t
need to go out for anything related to clothes. Secondly, customer’s privacy remains intact and
they don’t need to worry at all. Another gain of using fashion 2.0 is that customers are getting
perfect measurement which is a unique feature of fashion 2.0.
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Pain Relievers:
To alleviate the pains of customers related to their online shopping experiences, our
business will come up with track and trace delivery facility so that consumers can trace their
order and have peace of mind. We also have online assistants to help customers in taking
accurate measurement. To elevate website glitches and technology related issues we will
provide 24/7 technical support to consumers so that their pain could be minimized, and they
can comfortably use application. And we are doing efforts to provide best service to consumers
by taking feedbacks from consumers.
Products and Services:
The main products that will be offered to our customers are a complete range of
wearing solutions from raw materials to finished stylish clothing. Fashion 2.0 has website and
application for customers where they are seeing outfit designs. Fashion 2.0 product and
services provide phone-based customer service where a representative will be available for
online chat facility thus create value for customers to differentiate us from the rest of the
brands and online retailer.
Gain Creators:
For bringing added value to our business, customers will be offered virtual trial room in
which consumers can see measurements and outfit. Fashion 2.0 also added gains in the form of
user-friendly app so that those who have little knowledge of IT can also use app in good
manner. Another feature of fashion 2.0 is that they are providing professional tailors and
designers so that accurate measurement can be provided as promised with customers.
Business Model Canvas
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Figure: 1.2
Key Partners
This business will not only concentrate on bringing one specific brand on the platform,
instead, but it will also make its ties with numerous local brands of a region, fabric dealers,
cloth manufacturers, key retailers, weavers, fashion schools, and raw material suppliers so that
the users of our website and app are retained within one software for a longer period to
complete their entire purchasing journey
Key Activities
The key activities for managing our extensive system will include customer problem
solving, network building, maintenance or social relationship, managing distribution channel
(Awareness, evaluate, purchase, deliver, customer support), online platform, selection of product and
design, quality cost and inventory control, Marketing activities.
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Key Resources
This business is focusing on consumer needs of saving time by providing wide options of
customization. Our business will bring in not only a network of stores and brands but also a
proper IT system, tailors, logistic and supply chain network, patent and copy rights while
development partners will collaborate for the security and functioning of the system.
Measurement options will be available for customers who cannot find a size easily and tailors
will collaborate with them accordingly. The supply chain network and logistics system will be
having a tracking option for consumers. Patents and copyrights will make our business grow
more smoothly. Development partners will be collaborating to accomplish our key activities.
Value Proposition
Our business aims at providing a value proposition to our customers through a unique mix of
unlimited choices, cost reduction, convenience, and customization. Our business will be
providing the targeted customers with the latest fashion trends, customization options for
tailoring with an element of latest fashion in reduced costs by offering online shopping of all
renowned brands thus maintaining status. This business will also reduce the efforts of
customers in finding different tailoring and designing. For bringing a pleasant experience to our
customers during their journey on our website and app, users will be having a choice of playlist
selection and personalization
Customer Relationship
Our business will focus on this element by providing dedicated response against any query to
the customers. As our business is serving its customers from an online platform, we will drive
customer engagement, elevate their experience and create brand awareness by employing
customer-centric strategies from the start. Customer queries will be attended to as soon as
possible. Courtesy calls and emails will serve this purpose. Customer loyalty programs will be
performed and for ensuring their ease to use our app and website, user guide and app training
options will be established on websites.
Channels
To connect with our targeted customers for bringing traffic to our website digital media
channels like company website and mobile application will be used. Social media platforms such
as Instagram, Twitter, and Facebook, etc. will be used for creating awareness and word of
mouth for our business.
Associated partners will be brought to create more publicity for our business and direct
mailing is also a channel that will be used by our business to enter the market.
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Customer Segments
The segments targeted for this business are customers having age bracket of 10-45 years,
fashion freaks, field partners, and those people who find difficulty in finding the right size for
them. This one-stop clothing solution will allow Indian customers to try multiple choices
without visiting a brick-and-mortar store.
Cost Structure
In an online selling business, it has been observed that the pricing streams are mainly
focused on retailers’ characteristics (Zhuang et al. 2018; Luo et al. 2012) cost advantage
(Carlson and McAfee 1983), and marketing strategy (Wildenbeest 2011). In such online
platforms operating costs are significant for IT maintenance, quality, and service controls,
logistic and supply, branding and shipping costs are also included in cost structures. In every
Indian region where we will operate, low-cost areas will be focused on establishing our
distribution centers. As we are aimed at bringing an extensive network of designers and tailors
in one place for our customers, their salaries also made up our cost structure. Other costs
incurred in our business will be marketing and branding costs to establish our name. A rough
estimate of cost is shown as:
Sr. No. Cost Structure Initial Cost (INR)
1 Employees 1,500,000.00
2 Marketing for branding, advertising 3,000,000.00
3 Logistic and supply Contractual
4 Tailors Contractual
5 IT maintenance (Website, mobile app) 500,000.00
6 Quality and service control and maintenance 300,000.00
7 Inventory 600,000.00
Revenue Stream
To meet our costs, we have planned our revenue streams as well. We focus on bringing
substantial traffic to our online platforms to make money from advertising. As our business is
primarily focusing on the quality and customization needs of a customer, we will insert a
commission function in our app where a percentage will be kept aside for us from every single
order to the tailor on transaction that will be made from our website, app, and link redirection.
Direct sales from our web and app will also build our revenue stream.
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Conclusion
Now a days, customers demand for aspiration clothing rather than need-based clothing
contrary to previous years. Apparels are now a reflection of personality, aspiration and status
symbol beyond being a basic need only. Fashion 2.0 is all ready to catch this market wants by
their dedication and hard work. After initial setting and a stable position in the market our
business will also look for more diversification options to make it all in one platform
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