Synopsis
Venture-backed startups are testing quick-comm for fashion, promising under-hour delivery in metro cities. Despite significant cash burn and heavy discounting to attract customers, investors are betting on this segment's potential. However, challenges like high inventory costs and evolving fashion trends question the model's long-term scalability.Startups such as Knot, Slikk and Zilo along with quick-delivery arms of online fashion players Myntra, Ajio and Newme are burning cash on heavy discounting to attract customers. These ‘rapid fashion’ startups together burned $2-2.5 million in January alone, which rose to $3 million in March, multiple industry executives told ET.
Despite the cash burn, the segment has gathered the attention of investors who bet on it becoming the next quick commerce breakthrough. In February, Zilo raised $15.3 million funding led by Peak XV. Slikk, which is backed by Lightspeed and Nexus Venture Partners, is in talks to raise $15-20 million more, ET reported in March. Knot raised a $5 million round led by 12 Flags in December.
The segment evolved from quick-commerce platforms such as Zepto, Instamart and Blinkit, which offered basic fashion items for last-minute purchases. Then emerged vertical fashion commerce startups offering a larger portfolio for party, work and festive wear with rapid delivery.
Newly-launched fast fashion marketplace Klydo offers delivery in 15-30 minutes in Bengaluru while Gen Z-focused direct-to-consumer (D2C) brand Newme’s Zip offers 30-minute delivery and men’s D2C fashion brand Snitch has launched ‘Snitch Quick’. Launched in 2024, Myntra’s rapid commerce arm M-Now, was driving 10% of orders in locations where the service was live as of last November. Taking it one step further, these rapid fashion players have launched ‘try and buy’ and ‘virtual try-on’ options to tackle the return problems.
Investors upbeat
Investors believe the growing segment has high potential and room for a number of successful players. “Online fashion hasn't meaningfully evolved in a decade,” said Sunitha Viswanathan, partner at Kae Capital, which invested in Mumbai-based Knot last December.
Ecommerce has a strong fashion catalogue but the experience—waiting for days for delivery and hoping the fit works—“doesn’t resonate with young shoppers who are driven by impulse and influenced by social media,” she noted.
The quick commerce market size for fashion is about $1.7-2 billion currently, according to Kae Capital. “The price of the pie is much larger,” Viswanathan said.
Some said high enough order density to justify the infrastructure within a tight catchment is key for the model’s success.
“This will only work when there is an additional value proposition of better products and better portfolio,” said Dipanjan Basu, cofounder and partner at Fireside Ventures, which has invested in Newme. “Convenience alone cannot be the mode for this business.”
