Zara will enter India’s e-commerce scene in 2017

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Come fall of 2017, fashion retailer Zara will start selling its trendy clothes online in India.

Industria de Diseño Textil SA or Inditex, which owns fashion labels Zara and Massimo Dutti, announced plans to expand in Asia’s third-largest economy where it operates 21 stores.

Inditex chairman and CEO Pablo Isla Álvarez de Tejera, on a quarterly earnings call with investors, touted the opening of a 5,000-square-metre flagship store in Mumbai and discussed the company’s plans to extend its brand online in India.

Zara entered India in 2010 through a joint venture with the Tata Group. Starved for chic western wear, urban Indians took an instant liking to the brand’s relatively inexpensive clothes. However, its sales growth in the country has slowed. For the year ending March 31, Zara’s revenue in India grew 17% to Rs842.57 crore, trailing the 24% growth from a year earlier.

The retailer’s plan to pursue an online strategy makes sense in a market with a paucity of quality real estate options. According to the company’s website, the brand is currently available in eight cities. Opening up sales online will give it access to more markets where malls and high streets are still underdeveloped.

Zara’s competitors are still weighing their options in the region. Currently, American retailer Forever21 sells online through various websites in India. In a recent interview with Quartz, H&M India’s top chief said the retailer will wait and watch before launching online.

CEO de Tejera’s plans could prove profitable. Fashion is one of the largest selling categories on the internet in India. The country’s online retail market is estimated to grow to $64 billion by 2021, up from the current $16 billion, a 2017 report by Forrester Research shows.