The What, Where, and How of Building and Running a Fashion eCommerce Platform

When planning to start an eCommerce business, you are surrounded by many questions like:

  • What are the best industries to invest in?
  • Which niche to select?
  • What countries/geographical locations will bring the maximum revenue?
  • How to gain a competitive advantage and maintain profitability?

eCommerce has shaped the global retail market. Today, eCommerce across multiple categories like fashion, electronics, food, etc., accounts for trillions of dollars of global sales and shows no signs of a downtrend. Our experts have performed an in-depth analysis and research on the online fashion and apparel market.

Read this guide to know the global perspective, opportunities, market leaders, trends, and checklist to step into this lucrative industry.

Growth of the Fashion eCommerce Market

In 2021, the global fashion eCommerce market was valued at nearly 700 billion U.S. dollars. It is expected to surpass that figure by the end of 2022, and in 2025, it could reach just over 1.2 trillion U.S. dollars. The reason behind the explosive growth in this sector is the innovative technologies that have created online shopping an experience worth counting.

The global fashion industry is moving towards the decisive phase of digital adoption with growth in major countries across the globe. Here’s a quick overview of the Fashion eCommerce Industry Statistical data:

  • In 2021, the highest eCommerce fashion revenue by region was generated by the Asian market, followed by the Americas, and Europe.
  • In the Fashion segment, 30% of total market revenue will be generated through online sales by 2024.
  • 50% of the consumers reported that they choose to shop online because they find it more convenient to shop from the fashion eCommerce platform than traveling to the store to shop.

Opportunities In the Online Fashion eCommerce Market

Marketplaces like Amazon and eBay are undoubtedly eCommerce giants with over 50% of eCommerce sales. In this fast-growing economy, entrepreneurs are leveraging digital innovations to connect with their target audience with a better and enhanced customer experience. Offline fashion retailers are turning to digital platforms to encash the growing markets.

Why does fashion eCommerce account for growth and futuristic opportunity?

  • Lower digital barriers of entry encourage clothing retailers to sell clothing and fashion items across the globe
  • The emerging worldwide population with disposable income has been another contributing factor to this industry.
  • Personalization is a leading factor and people love to receive personalized offers and messages from their preferred brands. Personalization has been signified as a defining element to present and future success. By tracking user behavior, fashion eCommerce retailers have been able to target customers more accurately, hence winning more sales
  • Mobile Applications have succeeded in engaging customers at any time from any place. There is a growing pervasiveness among entrepreneurs to capture the growing adoption of mobile phones by users. eCommerce Mobile applications can reinvigorate stale sales from your offline store, thus creating a better experience for the users.
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Due to these numerous opportunities in the fashion eCommerce industry, entrepreneurs and business owners are able to tap the untapped markets, increase their customer base, and ultimately increase profit margins. The fashion eCommerce industry can be further segregated based on the products like

Clothing and Apparel:The eCommerce market segment for Apparel covers all types of clothing items for men, women, and children. The revenue in this segment is expected to show an annual growth rate of 11.90% from 2022 to 2027, resulting in a projected market volume of US$12,470.00m by 2027.

With a projected market volume of US$143,000.00m in 2022, most revenue is generated in China. The number of users in this segment is expected to amount to 395.0m users by 2027. User penetration is expected to hit 26.9% by 2027 and the average revenue per user (ARPU) is expected to amount to US$25.48.

Shoes:This segment includes all kinds of footwear such as casual shoes, slippers, etc. Revenue in this segment is expected to show an annual growth rate of 10.28% from 2022 to 2027, resulting in a projected market volume of US$192.80bn by 2027. With a projected market volume of US$30,160.00m in 2022, most revenue is generated in the United States.

In the Footwear segment, the number of users is expected to amount to 2,994.8m users by 2027. User penetration will be 27.3% in 2022 and is expected to hit 37.7% by 2027. The average revenue per user (ARPU) is expected to amount to US$56.85.

Accessories and Bags:The eCommerce market for the Bags & Accessories segment is expected to expand at a CAGR of 14.7% from 2022 to 2028.

Jewelry and Luxury items:This eCommerce segment comprises luxury goods like watches, jewelry, eyewear cosmetics, and fragrances. The luxury goods marketplaces have shown an upsurge during the last ten years. Revenue in the Luxury Goods market amounts to US$312.60bn in 2022. The market is expected to grow annually by 5.40% between 2022 and 2027.

In global comparison, most revenue is generated in the United States which is US$69,520.00m in 2022.

The Leaders of the Online Fashion Market

We are witnessing a systematic shift in the commerce world. Today offline retailers are making steady moves to enter the online eCommerce arena. It comes as no surprise that Amazon and eBay command the majority of eCommerce sales. Here are some of the market leaders in the fashion industry across the globe that have shown exponential growth over the last few years.

Sr.NoNameRegion/CountryVisitors per Month
4DafitiSouth America30.5M

Business Model For The Online Fashion & Apparel Marketplace

Like any other marketplace, the online fashion and apparel industry works in a similar manner. Here’s an overview of the functioning of such kind of online fashion marketplace:

  • The buyer logins/registers on the website.
  • The vendor/seller lists products on the website.
  • The buyer searches and filters products according to his preferences and makes the payment for the product bought.
  • The seller receives the order request and delivers the product to the buyer’s registered delivery address.
  • As for how the business makes money, the admin/owner of the marketplace earns money through the commission and seller membership fee.

Business owners can implement different commission rates for different products and for different sellers. A fashion eCommerce marketplace can charge a membership fee for opening the online store in addition to the commission on every sale. There can be secondary sources of revenue such as

  • On-site promotions for the sellers
  • Banner Ads

Important Features For An Online Fashion Marketplace

Here’s a checklist that you must thoroughly analyze before launching your platform to reduce complexities and ease the work for every user on the platform.

Product Catalog:The product catalog feature allows the owner/admin of the fashion eCommerce marketplace to control and manage as many catalogs as possible. The vendors select the product from the existing catalog and add it to their inventory and mention the pricing. The feature helps to enhance the overall experience of online shopping as the admin controls and optimizes the product images, descriptions, and specifications.

Payment Gateways: Payment Gateways play a significant role in the online retail environment as they are the digital equivalent of credit card processors. Payment gateways conform to safer payment transactions and safeguard against security issues. Multiple payment gateways make it easy for users to order products instantly online.

Analytics & Reporting:It is extremely important to review the performance of your marketplace. Based on the number, you can decide the future strategies and goals. Having a close look at the visitor statistics, sales report, and traffic analysis helps you understand your customers & reduce marketing costs.

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Seamless Product Management:If you aim to scale your business rapidly and want millions of products, it is very imperative that your eCommerce platform has strong and robust product management that easily allows the marketplace owner to manage the products.

Customizability: Your eCommerce platform should be customizable according to the growing needs of the consumer. A future-facing solution is the need of the hour to customize and scale the business as per the current/ongoing marketing scenarios.

Multicurrency:The biggest convenience of a multi-currency platform is easy accounting and global expansion. Billing the customers in their preferred currency unit improves their user experience on the platform.

Features To Benefit Buyers Of The Fashion eCommerce Marketplace

Mobile Applications:Personalization is one of the major reasons why mobile apps are performing better than desktops. Mobile applications help buyers to make purchases on the go and make them aware of real-time discounts and sales. Mobile apps have been proven to increase customer engagement and retention. Developing mobile apps for your eCommerce marketplace will help in increasing the business with a convenient and customized shopping experience for the buyers.

Rewards and Discounts:Rewards and discounts are an extra way to win additional revenue and word of mouth for your eCommerce marketplace. They have been highly effective in encouraging customers to shop online and driving customer loyalty. Not only rewards and discounts are driving sales but are a great way to increase product awareness and reach.

Responsive Layout:A well-optimized website will bring more visitors and conversions. A responsive web design allows a seamless user experience across multiple devices. Ease of use, better site speed, and increased conversion rates are not the only reasons why responsive designs, search engines too favor responsive stores online.

Smart Recommendations:Including recommendations as a part of the user experience has helped in increasing the average order. Displaying a list of suggested products based on the browsing history helps in personalizing the user shopping experience and therefore increasing the conversion rate of your eCommerce store.

Review and Rating:The majority of people read reviews before making a purchase online. Reviews and ratings have become an innovative way to gain social proof that persuades customers to buy online.

Streamlined Checkout:A streamlined checkout process is directly linked with the conversion rate for an eCommerce marketplace.

Features That Empowers The Sellers Of A Fashion eCommerce Marketplace

Advertisements: Display advertisements on the marketplace banner enable sellers to promote their product/shop. If a seller wants to promote his shop as soon as they launch, banner advertisements are the best way to do it. In addition to these, sellers should also be able to run PPC campaigns to attract more visitors to their store or any featured product page.

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Robust Vendor Dashboard: A vendor’s dashboard allows sellers to quickly analyze sales reports and product performance reports. Based on the real-time reports, the vendors are able to make effective decisions to improve the sales and conversion rate.

Multi-Store Functionality & Brand Creation: A vendor can have multiple stores with personalized logos, banners, and navigational tabs. Other than maintaining multiple stores, it is very imperative for the admins to understand that the success of a seller’s store will eventually result in the success of the online marketplace. Hence, sellers should have the freedom to manage the following properties

  • Banner Image
  • Products to be displayed on the store
  • About Section of the seller

All these typical features help sellers to maintain a brand identity of their own.

Import/export feature: This feature allows vendors to easily import/export product files that contain product information. Since vendors usually sell their products on multiple platforms, it is very important that they are able to manage their inventory across multiple channels. Admins or eCommerce marketplace business owners can integrate their platforms with third-party applications to provide omnichannel inventory sync.

Tax Management: Manage and customize tax categories rates for the products. Sellers need to add the tax percentage; the product rate is adjusted accordingly.

Inventory Management:Ease of managing inventory via the seller’s console. Get prompt notifications and emails whenever a product is out of stock, the product is shipped, etc.

How to Build a Fashion eCommerce Marketplace

If you want to sell online, an eCommerce platform is a must-have. Fortunately, the market is full of high-performing and reliable eCommerce software that can support your storefront. However, instead of quickly choosing the easiest and cheapest option, try to answer the following questions in your mind.

  • Will I require a lot of support or will a straightforward or hands-off platform be sufficient for my requirements?
  • Is my technical knowledge enough to do any kind of coding and build a website?
  • What features do I want for my website like email marketing, SEO, domain name, SSL certificates, etc.?
  • How much can I afford to pay for building the website? What would be the other costs such as additional add-ons, plugins, and themes?

One option is going for SaaS solutions, which are actually subscription-based software. These are built and maintained by third-party vendors and are available for rent. By paying a monthly or yearly subscription, SaaS users have access to the pre-designed themes, plugins, modules, templates and add-ons that allow users to customize their storefront.

However, the monthly/yearly recurring subscription cost increases the total ownership cost to a huge extent. Moreover, issues such as identity and access management need to be addressed before trusting any third-party service providers. If this is not enough, software running on a remote server often lacks in performance when compared to the on-premise one.

The other option is a readymade solution offering complete control over the source code, thus allowing for complete customization. The upfront purchasing cost may seem a bit more than the SaaS, however, the total ownership cost is much low in the long run. The readymade solutions also offer the ability to start small and scale the businesses at a later stage to accommodate the growing needs.

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One such solution is Yo!Kart that has all the benefits associated with a readymade customizable solution. On-premise hosting, lower cost of ownership, faster go-to-market time, coupling with platform-wide APIs, and integration with external applications and services make it an ideal eCommerce marketplace solution.

Yo!Kart is developed to tick all the boxes required to start and launch a winning fashion marketplace. Check out the features & modules and case studies of Yo!Kart, and if you are ready to proceed, book a meeting with us for a free initial consultation. You can also have a look at the demo and explore how Yo!Kart can help create a customized marketplace solution for your fashion marketplace idea.


Is your fashion eCommerce platform Whitelabel?

Yes, Yo!Kart is a white-label solution that provides the majority of eCommerce features a fashion marketplace would need.

Can I launch mobile apps for my fashion eCommerce marketplace?

Yes, Yo!Kart offers customer-centric buyer mobile apps for Android and iOS to provide a seamless shopping experience to customers.

Is your online apparel platform customizable?

Yes, our eCommerce platform is fully customizable and can be customized as per business requirements.

What is the cost to build a fashion eCommerce platform?

The cost of building a fashion eCommerce platform depends on the approach you decide on. If you choose to develop the platform from scratch, the cost of the platform will be very high. The starting cost of building with a readymade solution like Yo!Kart will be $999 and will vary as per the requirements.

How much time will it take to launch an online fashion marketplace?

Launching an online fashion marketplace with the help of Yo!Kart will depend upon the customizations. With the GoQuick package, the marketplace can be built and launched within 5-7 days.

Final Thoughts

To conclude, hope you have gained sufficient information in building a fashion eCommerce marketplace. With an upward trend and numerous successful business models, starting an online shop can be an easy recipe for success. You need to understand the market and should effectively leverage the above-mentioned information that will help you in building a strong marketplace platform that can survive well in the market.

And lastly, when backed by the perfect eCommerce solution like Yo!Kart and a strong business plan, there’s never been a better time to bring your clothing store dreams to life.

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