2026.09.25 | TB | Retail | India Fashion E-Commerce: Ex-H&M

Client-led • 3 Sep 2026

Companies: AMZN US, HM B SE

Expert Former Senior Executive, Merchandising & Sales at H&M Hennes & Mauritz AB

Agenda

• Over 15 years' experience across retail strategy, operations, business development, merchandising, planning and inventory management
• Well-versed in major fashion and retail brands, especially Zouk's offline expansion, P&L, merchandising and overall business operations
• Knowledgeable on key players' sales channels, margins, volumes, unit economics and emergence on q-commerce (quick commerce) and new-age platforms such as Slikk and Zilo

Questions

[00:04:42] How do the economics look when selling on Myntra vs Zilo or Slikk? Could you compare and contrast it to how it looks in the offline world?

Expert [00:05:08]: It depends on the model you're operating in. In a pure-play marketplace model, of course, the economics are slightly better off from a brand perspective, but of course then, eventually, the P&L at a CM level at least is worse off in a pure-play marketplace model, whereas in an outright, the P&L on the brand side is better. Again, on the PPMP side, margins, etc, hover anywhere between 18% to 25% depending on whatever you've negotiated with the different players, and that takes that chunk away.

Client [00:06:09]: When you mention 18-25%, do you mean the realisation price the customer pays is 100 and on that, you might get 18-25% or net of taxes? How should I look at that?

Expert [00:06:23]: No. 18-25% is always net of taxes. All the margin calculation, etc, is always net of taxes from my experience. Basically, if it's 100 what the customer pays, and let's say you got a 5% tax on that, so whatever, if it's 95, then on 95, it's the 18-25%.

Client [00:06:50]: 18-25% is what the marketplace is keeping, right?

Expert [00:06:54]: What they keep, yes. That's on-the-go, top-of-the-funnel trade margin. Then, of course, when you're in a pure-play marketplace set-up in order to push your products, there's a lot of on-platform marketing performance, etc, that is needed, which can be almost to the tune of another about 20%-ish. Hence, when I say that, then in a pure-play marketplace set-up, your overall economics from a CM2 standpoint is worse off for the brand because almost 40-45% is gone in a way to sell the product on the marketplace. If you're operating at gross margin of, let's say, 60%, then it's only about 20% left for all the other overheads. Then when you kick that in, there's hardly any profit left in a way. Usually, in PPMP, broadly in the luggage category, the logistics cost is also to the tune of about 8%-ish.

[00:08:10] You mentioned that there are multiple models – inventory, marketplace and sale or return as well. How do the economics look in each of the models, and which vendor operates in what? Which platform operates in what?

Expert [00:08:46]: If I look at mostly, majority of e-commerce now has gone into the inventory model, which means that we just sell the product at a certain margin. Then the advantage is that then the inventory sitting on the partner's warehouse, and then, in a way, the partner is, of course, also equally invested in getting it out to the consumer. The spend on performance on platform reduces. Then you do only certain events or certain collabs, etc. Total outflow in an inventory set-up is usually not beyond 30% for a marketplace standpoint. The P&L for the brand is much better in that sense. It also gives you better delivery times because the inventory is sitting at the… of course, from a consumer promise standpoint, it works better for the brand.

[00:28:40] On Myntra, do you have some sense of M-Now, and how does that model operate? How is the experience?

Expert [00:28:50]: What they do is they themselves actually decide the SKUs that they would want to place in their M-Now dark stores. Then they would give POs accordingly, and, of course, there will be a slightly higher demand of those SKUs, which then sometimes we together formulate. It is more at a category level that we are saying, "These are the SKUs and this is the belief that we would want and you should put it in M-Now stores, etc,".

Client [00:29:52]: You mentioned there are two models. One is obviously an outright inventory model. The other you mentioned was PPMP. What does that mean?

Expert [00:30:08]: Pure-play marketplace, which basically means that you're using the platform to generate…

Client [00:30:19]: Visibility and discovery.

Expert [00:30:21]: Discovery and sales, everything else. From order fulfilment to logistics to everything is on the brand. Yes, that's what it is.

Client [00:30:30]: Is there any in between? I understand there's a model called sale or return. Do you have experience operating there? Are there any pros and cons vs the inventory there?

Expert [00:30:45]: Correct. Sale or return, honestly, what happens is, it is actually, to a certain extent, logistics cost almost is 1.25-1.5x for that because you would build something based on what they've demanded, like the marketplace has demanded. In a way, your working capital is also blocked, and you are working at a higher OPEX. For the brand, it's a very bad model to work on.

[00:32:43] Could you share a comparison to a typical apparel brand?

Expert [00:33:03]: In the handbags industry, honestly, return percentage is fairly low. Honestly, returns is not such a big factor for handbags in terms of inventory, capital block, all of that, whereas on the core apparel side, this is a big factor. Of course, brands have to take this into consideration, both in terms of logistics as well as in terms of working capital block.

Client [00:33:57]: How does it work in an inventory model? Let's say Amazon has returns; how does that impact you? Does it reflect in terms of fewer SKUs the next time?

Expert [00:34:20]: For an inventory model, honestly, returns don't impact the brand at all. It just impacts that of the primary that they will give in the subsequent month will be lower because they are sitting already on a certain level of stock. That's the only thing. Otherwise, in an inventory model, it's clean. The inventory now is the partner's responsibility. The brand actually has no onus on that.

Client [00:34:45]: You have spent marketing dollars on it to that extent and the logistics cost. Those two are wastages. Is that correct?

Expert [00:34:53]: Those two are wastages, of course, correct.

[00:37:54] I understand H&M is on Myntra and other platforms as well. What do the company's returns and margin structures look like?

Expert [00:38:15]: H&M is on Myntra, and now they have launched on Ajio as well as Nykaa Fashion. H&M does everything at a pure-play marketplace level. When you're on an inventory model, the brand loses control on pricing. Once they have bought the product, now if they want to invest their dollars on discounting, they can do that. The brand does not have control on pricing. This is a very important factor for H&M.

[00:40:05] I think to some degree, there has been aversion for some bigger brands to be on some of these platforms, whether it's H&M, Zara, Uniqlo, etc. What's the rationale behind it? Do you see that changing? Getting onboarded on Slikk, Zilo, etc?

Expert [00:40:28]: Honestly, I feel in India, at the life stage where all of these brands are, I don't think any of them would explore vertical commerce in the next two years. That's my honest opinion. Why? Because brand positioning and how the brand is perceived, and more importantly, the pricing control is something that is of ultimate importance with a lot of these international players. That's the main reason that the fear of brand getting diluted or brand being misrepresented is much higher than anything else. While all the sales data and all of that might be on the positive side, but actually, it is just the brand equity that they feel will take a compromise, and hence they don't want to explore. That's where with Myntra also, if you see the representation of H&M or a Marks & Spencer on Myntra is very different from, for example, even an Adidas, Nike, Puma. They will have a separate page. They will have certain UI/UX that will feel a little on-brand. That's done on purpose with the Myntra guys. That's very important for them.

Client [00:41:57]: I think Newme and Snitch have a fair bit of store presence in at least the top demand pockets. What is stopping them from doing same-day delivery? You have the likes of Shadowfax, etc, enabling some of these? I want to understand what's been stopping them from doing same-day delivery on their own apps. They all have their own apps now. Is that correct?

Expert [00:42:45]: Same-day delivery, you mean for the new ones, the scaled fashion ones or the international ones? Sorry, I missed that.

Client [00:42:53]: Let's take the new ones, let's say, Newme, Snitch, etc. What is stopping them from doing same-day delivery from their own apps? Is that something that could be a start?

Expert [00:43:04]: They are exploring. No, I believe Snitch has started same-day delivery in Bangalore. In Bangalore, they've launched same-day delivery. Newme has launched same-day delivery. In fact, in Bangalore, Newme has launched same-day delivery or even two hours delivery. Souled Store is a bit lagging, so I think Souled Store has not started that yet. I'm not sure why so, but I think a lot of these other brands are actively exploring same-day delivery, two-hour delivery, four-hour delivery, all of that. Yes, I think it's all under works. Everyone is trying to explore this. It will soon come up, I think, across the board.

Client [00:44:09]: Is there anything else that I should know?

Expert [00:44:15]: I'm saying for, just on this part, on the same thing, just comparing it to the more established international players. For them, I feel it is going to be much difficult to get this whole same-day delivery thing done because purely of global protocols and global tech stacks and all of that. Integration, enabling a local player to do that is just a little more complicated in that set-up. I feel the H&M, Zara, Uniqlos of the world will take still some time to get into that same-day delivery construct. Just to conclude on that.

[00:44:52] From a quick fashion perspective, what will it take to get to a good scale? What is your sense of customer adoption and acceptance?

Expert [00:45:15]: Honestly, I feel, fortunately or unfortunately, in India today, all the scaled quick fashion people are those who have played well on pricing and are able to secure their supply chain. Those are the two biggest challenges, honestly, in fashion today. There are a lot of small players trying to operate in the premium space, but they are not able to scale so. Even I take the example of Bluorng also, to be honest, Bluorng, of course, has now in a lot of PR media, all of that, they're opening physical stores, etc. If you look at overall top line increase, it's not that high because it's just that the TAM that they operate in is very limited in India. Unfortunately, that's the challenge. It is the INR 1,000-1,500 price point, with which going beyond that becomes a challenge. If you're a brand who's able to execute distribution and supply chain, and when I say distribution, I mean all sorts of distribution, whether it's offline stores, whether it is quick comm, whether it is your own D2C, etc, if you can execute that super well and you have a sorted supply chain because for most of these fashion brands, of course, new customer acquisition is one aspect, but there's a lot of repeat that they are able to drive.

Now to drive repeat, if you show the same type of fashion every other month, that is a big risk and that is a supply chain dependency. What I feel the largest external factor is in India, the supply chain for fashion is not so robust as it is, let's say, in China or a Bangladesh. That could be a risk for eventually when they reach a scale which is, let's say, INR 1,000 crore-1,500 crore scale when you don't have your own manufacturing. The demand side is not the problem. The demand will definitely be there.

Client [00:48:02]: I think it's a complicated industry and you helped me understand at least ABCs of it pretty quickly.