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Opening an Online Apparel Outlet in India

Opening an Online Apparel Outlet in India
An apparel store online has great potential because of changing trends where people prefer buying their clothes from e-stores because there are lots of options to choose from, the deliveries are prompt and fast and of course, clothes are available at great prices.

As an online retailer of apparel or clothing, one can choose from either of the following:-
a.    The online store will be an extension of an offline store that one has. 
b.    Get associated with an established e-commerce site or open your own web-store
c.    One can start a home-based online business.

Whichever method of operation is selected, the owner must choose to go ahead with a site or make his own store mobile friendly. Not only computers and laptops, Indians are busy shopping with their mobile handsets too with 23% of online shoppers in India using the mobile device to shop online in 2016.

Rising internet penetration in the urban and rural areas of India is expected to further fuel the growth of the online e-commerce sector. In December 2017, the penetration figures were 64.84 % in urban India and 20.26% in rural areas.

What are the market trends of online apparel outlets in India?

The e-commerce sales as a percentage of total retail sales in India in 2016 were 2.2%. The retail e-commerce sale in India in 2016 was around 16 billion dollars and is expected to touch 64 billion dollars by 2020. India’s retail e-commerce compound annual growth rate is projected to touch 23 % by 2021. 

What are the requisite licenses and registrations that are required to start the online apparel store?

The mandatory Government registrations for an online apparel outlet are:-

a.    The first step is to register the business as either of the following business entities:-

•    Sole Proprietorship firm
•    One person company
•    Partnership firm
•    Limited Liability Partnership 
•    Private Limited Company

b.    Choose a domain name and apply for the trademark license under the Trade Marks Act 1999 with the Registrar of Trade Marks.

c.    Trade License under Shops and Establishments from the local municipal authority–this license can be applied for online or submitted at the municipal office. This license is mandatory as it is issued after cross-checking that the business is in no way going to cause any nuisance or harm to the residents of the locality or to the region as such.

d.    GST registration – is mandatory for all e-commerce business. The GSTIN number has to be mentioned on the invoice provided to customers.

e.    Export-Import Code or the IEC Code that is issued by the Director General of Foreign Trade (DGFT). This is a ten digit code valid for the lifetime of the organization. 

Essential documents for starting the e-commerce operation:-

a.    Prepare the privacy policy under section 43A of the Information Technology Act, 2000 that is related to the handling of sensitive personal data and applying reasonable security practices.

b.    Draft and finalize the Terms and conditions of the website to cover all user and company agreements.

c.    Prepare Vendors Agreement with each individual vendor covering all details, quality related issues etc. 

d.    Obtain the Payment Gateway and Logistics for e-commerce business. Documents required for obtaining a payment gateway:-
•    The business entities’ bank account details
•    PAN card of the business
•    Certificate of Incorporation
•    Memorandum of Association and Article of Association or Partnership Deed
•    Identity proof and address proof of the directors or the promoters
•    Website Terms of Use
•    Website Privacy Policy

e.    Finalizing the User Agreement in the best interest of the user and the e-commerce site as per the Data Bill 2017 (Privacy and Protection Bill). 

Opening an Online Apparel Outlet in India
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Opening an Online Apparel Outlet in India

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