MERCADO CASE CHALLENGE

About the Industry

Indian apparel retail is divided between two sectors: organized and unorganized. It is estimated
that over 95% of retail in India is done through the unorganized channel. The potential for huge
growth in the organized retail sector leaves a big potential market for new players to access.
The Indian apparel retail industry had total revenues of $15.1bn in 2014, representing a
compound annual growth rate (CAGR) of 10.4% between 2010 and 2014.
The performance of the industry is forecasted to accelerate, with an anticipated CAGR of 11.7%
for the five-year period 2014 - 2019, which is expected to drive the industry to a value of
$26.2bn by the end of 2019.

The Indian e-commerce industry is likely to clock a compounded annual growth rate (CAGR) of
35 per cent and cross the USD 100-billion mark in value over the next five years and is presently
at USD 17 billion.
With improvement in infrastructure such as logistics, broadband and internet-ready devices,
there is likely to be a significant increase in the number of consumers making purchases online.
It is estimated around 65 million consumers in India to buy online in 2015, as against around 40
million in 2014. By 2018, India is set to witness 500 million internet users whereas 280 million
smart-phone users could be the key drivers for e-commerce portals.
By 2020, India is expected to generate $ 100 billion online retail revenue out of which $ 35
billion will be through fashion e-commerce. Online apparel sales are set to grow four times in
coming years.
About the Brand
Fashion & Apparel Business in Retail has evolved from in-store purchase to on-line purchase
and now moving to mobile purchase. With the advent of time, firms are putting efforts to
leverage on product purchase pattern. Customers get to see the products which are
personalized based on their past purchases and preferences. A recent Infosys survey reported

that 78 percent of consumers are more likely to be a repeat customer if a retailer provides
them with targeted, personalized offers.
Most customers arent sure about how to pick the right clothes that suit them. Imagine you
have a personal stylist who will handpick best clothes for you based on your body and style
preferences. Fabulous-U focuses on leveraging this aspect of the Retail business. Its underlying
principle Buy your own fashion portrays the brand as a Fashion Advisor. Fabulous-U works on
a buyer-seller marketplace model. They are primarily into Fashion & Apparel segment.
Presently they are into online channel only and planning to come up with a mobile app. For
personalization and online merchandise display, they take into account a few parameters along
with the purchase pattern which would give the users instant recommendations. It would tell
them how to wear it and also suggest other outfits that would complement the product.
Fabulous-U is the first-of-its-kind to come up with this personalization idea. Its been only a
year that it has come with this model. It is looking for ideas wherein it can scale this business.
Problem Statement
1. What are the other metrics that you can think of that the firm can use to give the
customers a better experience with more personalized recommendations. (For example:
Previous purchase history). Give a short brief on how each one of them will enhance
personalization.
2. How do you think Fabulous-U can compete with market leaders based on the
marketplace model on which they operate? What are the ways that it can scale up?
3. The excel file represents the data for Fabulous-U for a product category. Few of the
metrics which were measured are given in the sheet which are considered to rank the
different products listed in the online store. Each of the metric from column B:G needs
to be assigned a weightage on a scale of 1 to 10. Compute the total weightage and rank
the above 20 products respectively. Give a brief on the choice made for assigning the
weightages to the given parameter.
4. Your team has recently been chosen by the business head of the Apparel category to
create the merchandising webpage to showcase the various products for its next season
sale. The idea is to come up with an optimum visual merchandise to maximize the sales
and margins. In this regard, she has provided you with some data related to these
products. She believes that the metrics shared in the data are the most important
parameters for any Apparel product and expects your team to use this data to come up
with a merchandising model to showcase products on the website.
Your task is to come up with certain weightages (on a scale of 1 to 10) for each of these
parameters and subsequently come up with a scorecard for these products. Provide

reasoning as to why those weightages have been assigned to the parameters. Your
ranking of the products, based on the scorecard will eventually decide the order of
display of these products on the Apparel category page and will therefore drive the
sales; hence your and your teams reputation and appraisal post next season is
dependent on the success of this model.
Use the working excel sheet provided along with this document to solve this part of the
problem.
Clearly state all the assumptions, if any.

Bibliography:http://articles.economictimes.indiatimes.com/2015-03-20/news/60322834_1_e-commerceindia-fashion-forum-fashion-retail
http://www.indiaretailing.com/7/23/24/13917/E-comm-poised-to-cross-USD-100Bn-markwhile-malls-continue-to-suffer-Study
Market Line Industry Profile- Apparel Retail in India 2015