Chapter-1

An overview Of the Industry

History of industry

Myntra is a major Indian fashion e-commerce company headquartered in Bengaluru,

Karnataka, India.The company was founded in 2007 to sell personalized gift items. In May

2014, Myntra.com was acquired by Flipkart.

Established by Mukesh Bansal along with Ashutosh Lawania and Vineet Saxena; Myntra sold
on-demand personalized gift items. It mainly operated on the B2B (business-to-business)
model during its initial years. Between 2007 and 2010, the site allowed customers to
personalize products such as T-shirts, mugs, mouse pads, and others.In 2011, Myntra
began selling fashion and lifestyle products and moved away from personalisation. By 2012

Myntra offered products from 350 Indian and International brands. The website launched
the brands Fastrack Watches and Being Human.In 2014, Myntra was acquired by

Flipkart in a deal valued at ₹2,000 crore (US$270 million). The purchase was influenced by
two large common shareholders Tiger Global and Accel Partners. Myntra functions and

operates independently.Myntra continues to operate as a standalone brand under

Flipkart ownership, focusing primarily on "fashion-conscious" consumers.
In 2014, Myntra's portfolio included about 1,50,000 products of over 1000 brands, with a
distribution area of around 9000 pincodes in India. In 2015, Ananth Narayanan became the
Chief Executive Officer of Myntra.
On 10 May 2015, Myntra announced that it would shut down its website, and serve customers
exclusively through its mobile app beginning 15 May. The service had already discontinued its
mobile website in favour of the app. Myntra justified its decision by stating that 95% of traffic
on its website came via mobile devices, and that 70% of its purchases were performed on
smartphones. The move received mixed reception, and resulted in a 10% decline in sales.In
February 2016, acknowledging the failure of the "app-only" model, Myntra announced that it
would revive its website.
In September 2017, Myntra negotiated the rights to manage Esprit Holdings's 15 offline stores
in India. Myntra reported a net loss of ₹151.20 crore in the financial year 2017-18.
In January 2021, Myntra changed its logo, after a police complaint was registered that the logo
resembles a naked woman. The complaint was filed by a woman named Naaz Patel, who runs an
NGO called Avesta Foundation.

Business Process of the Industry

Myntra is an e-commerce company of fashion and casual lifestyle items. It is headquartered in

Bengluru , Karnataka,India. The company was founded in 2007 with the aim of selling
personalized gift items.

In 2020, it started web retailing of clothes. In the same period,it also started trade in
customised items.In 2014,Myntra converged with Flipkart to give competition to Amazon that
had entered the Indian market in 2013.In this period Myntra Started selling over 1000 brands
to over 9000 pin codes of India.
In 2015, Myntra shut down its website and operated through the application only. But because
of this business model suffered a loss of 10%,it revived its website also . The further growth of
Myntra can be seen from the below-drawn chart.
In 2016, it also paired up with the Ministry of textiles to promote handloom industry. Myntra
has bought various small companies to extend its reach and to improve its logistics and
technological work. Mynta has partnered with over 3000 fashion and lifestyle brands
including Nike, Adidas, Diesel, Harley Davidson,Ferrari, Timberland, and others.

.
 The business model of any company is the strategy it uses to gain a larger market space. The
chart describes the business model of Myntra in tabular forms.

Market demand and supply

Online fashion retailer Myntra announced its foray into Social Commerce at scale, to cater to the
rapidly evolving content consumption patterns and shopping preferences of consumers. Social
commerce, which is the use of social network communities to drive e-commerce sales, is
expected to be about a $70 billion market opportunity in the next few years, according to
analysts.
As a part of this launch Walmart-owned Myntra also unveiled M- Live, a first-of-its-kind
interactive and real-time shopping experience for shoppers in the country. With the launch of
its Social Commerce charter, Myntra is looking to transform the way consumers shop by
bridging the gap between inspiration and commerce while bringing both under one single
platform. Under this charter, Myntra will target fashion and social media savvy young men and
women who are looking to have access to the best-in-class fashion advisory and in-demand
trends.

Today, social platforms are considered to drive about 70 per cent of purchase decisions for
fashion-forward consumers with fashion and beauty being the most popular categories in the
Social Commerce realm as per industry reports. Pivoted on community, connection, and trust,
Myntra believes that as the future of shopping, its Social Commerce charter is likely toplay an
important role in defining the way its customers shop.

Myntra’s Social Commerce Business has three distinct propositions.With M-Live, its proprietary
live video streaming, and live commerce platform, Myntra is further paving the way for the
future of shopping. M-Live aims to facilitate a real-time engagement between consumers and
brands by allowing influencers and experts to host live video sessions of product and styling
concepts curated by them, on the Myntra app, enabling viewers to shop instantly. M-Live is also
the nearest to an expert-assisted offline shopping experience that is fully experienced online.
The core benefit is the users’ ability to get interactive descriptions of products independently
curated by experts they can trust and identify with while getting instant advice on various
aspects like styling, fitment, product quality, and material. With several concurrent users
joining the live sessions, it also gives users the opportunity to shop as a community. They
benefit from the community’s knowledge, observations, questions, and comments, enabling a
more confident shopping decision that is backed by social validation.
There is also Myntra Studio, a platform that provides users with access to over 20,000
original, inspirational, and shoppable fashion, beauty, and lifestyle content assets at scale,
Myntra Studio has helped establish Myntra as a frontrunner in innovative content-led
commerce. The platform has grown by 25X in the last 6 months itself. Some of the leading
brands on Myntra have 2-3 times larger communities on Myntra-Studio and witness a 3-4X
higher engagement, in comparison to other similar influencer-led platforms. The in-house
built platform has managed to attract and induce shopping among the younger and premium
shoppers from across the Metros as well as Tier 2 towns and beyond.

Myntra Studio currently engages about 20 per cent of Myntra’s monthly active user base and
Myntra expects this to grow to 50 per cent in the next 3-4 years as it scales its Social
Commerce charter.
The influencer ecosystem in India has begun to significantly scale up with new digital-first
content creators emerging across geographies. With its foray into Social Commerce, Myntra
said it is set to create a new ecosystem for consumer-influencer engagement by providing the
necessary turf for hundreds of talented influencers to engage with and acquire new followers
under one roof. In addition, with M-Live, Myntra will start by supporting multiple concurrent
live streams, and will steadily scale this, with an aim to churn out close to 1000 hours of live
content per month in the near future. On Myntra, the influencers would also get the
opportunity to partner with leading Indian and global lifestyle brands. It will propel the rise
of a different segment of creators who are relatable, engaging, and confident sellers.

E-commerce—powered by cheap data, supply-side innovations, and digitally savvy

customers—has become a $30 billion industry in India in fiscal year 2020. More than 100
million of India’s estimated 572 million Internet users purchase products online.
And the next frontier is social, according to a report titled ‘The Future of Commerce in India –
the rise of social commerce’ by Bain & Company in partnership with Sequoia India.
The report expects that social commerce, which is a $1.5 billion to $2 billion market today,
will be worth as much as $20 billion in just five years—and will likely hit nearly $70 billion by
2030. In short, India’s social commerce sector will be twice the size of the current e-
commerce market within 10 years.

Contribution to GDP

• The Retail Giant

Myntra started with books and then added everything from engagement rings to jail cells for
mobile phones until it became "the everything store." Add the convenience of having it
delivered promptly to your doorstep, and customers have rewarded Myntra with open wallets.
According to Digital Commerce 360, Myntra revenue from U.S. consumers' web purchases
amounted to 30.7% of U.S. online retail sales in the first quarter of 2021.1 In 2020, ecommerce
spiked to account for approximately 21.3% of U.S. retail sales, meaning Myntra accounted for
about 6.5% of all retail spending. This huge increase can be attributed to the surge in online
shopping as a result of the global pandemic due to the novel COVID-19 virus. If you consider
the macro picture, consumers spending more is a good sign because it contributes to the GDP.
That being said, consumer spending on Myntra is not significant enough to tip the GDP scale.
However, it could be in the future.

• Myntra Kills Inflation

Myntra has disrupted traditional retail and accelerated the demise of struggling players.
Without storefronts, the company’s overhead costs are significantly lower than other
retailers. That gives Myntra the edge to undercut rivals on prices and operate on a thinner
profit margin.Some economy watchers are nervous about Myntra’s deflationary impact.
Ideally, low unemployment is accompanied by wage growth, which in turn fuels inflation as
companies pass on the costs to consumers.
That is the logic of the Phillips curve, but Myntra has disrupted it as well. Greater competition
and lower prices can limit the ability of companies to pass on any wage increases to
consumers. Those worries were echoed in the wake of the Whole Foods acquisition in 2017.4
Chicago Federal Reserve President Charles Evans noted that mega- mergers can put
downward pressure on inflation.

• Jobs at Myntra

By the end of 2020, Myntra employed approximately 1.3 million

employeesworldwide.6 In 2020 alone, the company added 400,000 jobs.7 That
includes both full-time and part-time employees. Although over one million
seems like a large number, it is actually low by retail industry standards
because Myntra does not have a significant storefront presence. A traditional
store requires far more employees. For example, Walmart (WMT) employs
approximately 2.3 million people worldwide.Amazon also engages several
third-party contractors and companies for tasks like deliveries. Those people
go door-to-door, dropping off Myntra packages. However, they are not
employees of the company. Does that matter—yes and no.In a way, these are
jobs for people. Therefore, some credit could go to Myntra for job creation. On
the other hand, hiring contractual workers helps the company keep its costs in
check. Some have criticized the company for harsh working condition.
 Revenue Generation

The primary source of revenue for Myntra is the commissions and fees that it obtains by
making the borrowers and sellers meet. Myntra doesn't sell a lot of stuff on its own. It just
provides a marketplace guaranteeing a standardized experience for both the buyers as well
as the sellers. Myntra.com Inc. (MYNTRA)the world’s largest online retailer, has grown
rapidly in a broad range of businesses including its core e-commerce operations, cloud
services, and digital advertising.

Level and type of competition

• Flipkart

Flipkart is a newer ecommerce company compared to some of the other competitors on our list.
This Indian-based ecommerce platform was founded in 2007 and quickly became the largest
online retailer in India. In 2018, Walmart acquired 77% of Flipkart’s shares, valuing the company
at $22 billion.With Walmart controlling the majority stake of Flipkart, there’s no telling where
the company can go from here.More than 100 million users are registered on Flipkart. The
platform’s user-friendly design, mobile app, and customer service make it one of the up-and-
coming Amazon competitors. With such a wide range of products offered through Flipkart, the
company is poised for continued success in the coming years.
 • Rakuten

Rakuten is a Japanese ecommerce company.The business generates more than $2.3 trillion
per year in retail ecommerce sales. In 2019, Rakuten controlled 14.1% of the total global
ecommerce market in terms of retail sales. Furthermore, they are responsible for nearly 10%
of the total ecommerce retail share in Japan. Rakuten generated more than $134 billion in
Japanese ecommerce sales alone in 2019.In 2010 they purchased buy.com to expand its
global presence in the United States. Aside from buy.com, Rakuten has acquired other
ecommerce companies like Price Minster (France) and Play.com (UK). They also ventured
into acquisitions like Ebates (cash-back rewards) and Viber (VoIP software).As Rakuten
continues to expand and buy companies across varying industries and regions, they will
attempt to keep pace with Myntra.

• Jingdong
Formally 360buy, JD (Jingdong) is another Chinese ecommerce business. This Fortune Global
500 company is a direct competitor of Tmall, which is run by Alibaba.At JD.com, consumers can
buy a wide selection of products at an affordable rate. The website also has a “buy in bulk”
category, which is another reason why it goes head-to-head with Alibaba.Joybuy.com is also an
affiliate of JD. This site is in English and ships to more than 200 countries worldwide. It also
offers 24/7 customer service and 30-day returns.Jingdong has more than 305 million active
customers. Its quarterly active customer accounts are increasing at a 22% year-over-year
growth rate.

• Otto

Otto is a European online retailer. The company is best known for innovation throughout the
years to keep pace with the times. At its core, Otto is a trading company, meaning that it sells
products from other brands on its ecommerce platform.It’s essentially a one-stop-shop for
buying online in Europe. Some of Otto’s top categories include fashion, electronics (like Apple
and Microsoft products), home goods, and sports.One of the reasons why Otto is so popular is
due to its user-friendly interface. The platform makes it easy for consumers to shop online.In
2019, Otto generated roughly $3.8 billion in revenue from online sales. While this may seem
marginal compared to Amazon, it’s still extremely impressive.Otto has a 13.7% annual growth
rate. 72% of their sales come from furniture, appliances, and fashion purchases. This makes
them unique compared to Myntra.
 Firms operating in the industry

• Jabong

Xerion Retail Private Limited, also popularly known as Jabong, was a private company that
was located in Gurgaon, Haryana. It was launched on 23 September 2011. It was classified
as a private limited company. Jabong operated only on online fashion and lifestyle stores. It
sold numerous products ranging from clothing, bags, shoes, sunglasses, jewellery, watches,
and many more.

• Fitiquette
The company is located in Sans Francisco. Fitiquette is the world's first virtual dressing room
platform that enables online shoppers to virtually try before they buy option. It provides an
online shopping experience that is very similar to the offline model like buying from the
stores.The technology used in Fitiquette shows virtual mannequins based on the body types
of the users. This can further adjust the specific measurements of the users based on their
body until it closely mirrors their own. The unique thing about this technology is that the
clothing chosen is represented as the best fit based on a series of measurements. (Example. S,
M, L, XL).

• Roadster

Myntra owns the fashion brand Roadster, Myntra's outdoor lifestyle brand which was
launched in December 2012. It generates close to 7% of the total sales.Myntra's lead designer
for the Roadster brand is the famous Vanni Lenci. Roadster has launched an all-new licensed
Roadster MotoGP collection. It is the first Indian brand to enter into an exclusive collaboration
with the world's premier motorcycling championship, MotoGP on Aug 18, 2016.
 • HRX

HRX is a 5-year-old brand and platform based on a life philosophy to keep pushing. HRX is
India's first celebrity brand that was founded by Hrithik Roshan who is also the brand
ambassador for HRX. It is also India's first homegrown brand that solely focuses on the sports
and active lifestyle space. The brand was founded by Hrithik Roshan and co-founders Afsar
Zaidi, Kamal Punwani, and Sid Shah. HRX was acquired by Myntra, the online fashion store
owned by Flipkart on Jul 20, 2016. It acquired a 51% stake in HRX.The company was formed
by taking inspiration from Hrithik Roshan’s life. No matter how big adversity, it can be
overcome with perseverance. It was created to inspire and guide billions of people. HRX main
aim is to help people achieve their fitness goals. HRX is a mission that helps us enable and
support people to be the fittest, happiest, and most confident version of themselves.
 Pricing strategies in the industry

Myntra Pricing Strategy:

Myntra is present in an extremely competitive environment and hence has focuses on

competitive pricing.

Although Myntra sells branded products, it follows a heavily discounted pricing model. The
discounting is done to attract more customers and create a loyal userbase. Myntra also
organises shopping festivals named End of Reason Sales in which goods are sold at 60-80%
discounted price. This discounted model has been augmented by tech-led pricing in recent
years using Myntra’s in-house software and algorithms. This pricing model dynamically prices
the products based on various data from the usage pattern and search history of customer and
hence, is known as dynamic pricing model. The pricing of in-house labels is done
competitively, still it costs the consumer around 20-25% cheaper. Moreover Myntra Original
brands give a margin of 60% to the company, as compared to 35-40% offered by third party
brands.
• Total price or landed price is the price with everything included - this is what the customer
pays at the end of the purchasing process. The following are included in the total price:
Shipping and handling charges.
• Discounts, rebates, or special sales/promotions.
• Shipping method.
• Business practices, such as any reduction or elimination of shipping charges on an order, or
of any other order-related fees and expenses.
• Low-price guarantees Myntra’s pricing model also takes things one step further using
convenience. We all see the convenience of buying online. But when you have so many
merchants competing to be a top seller for just one product, you always have a depth of easy
choice for customers, that almost never runs out of stock. This again drives loyalty, increases
sales and keeps both merchants and customers coming back for faster rolling profits and
purchases.
Industrial performance global , national and regional basis

Industrial performance global, national and regional basis Myntra hasn’t historically had the
same success overseas that it’s enjoyed in the US. But now growth in the e-commerce
company’s international business is blazing past its growth at home. In the latest quarter
Myntra’s international sales surged 60% compared to the same time last year, far outpacing
the 40% growth it saw in North America and marking Myntra’s second quarter in a row of
higher growth overseas. While North America still makes up a much larger share of its
business, recording $64.4 billion in sales in the quarter compared to Myntra’s $30.6 billion in
international sales, the result shows Myntra gaining traction in other markets. Total sales at
the company rose to $108.5 billion, jumping 44% over last year. Its profits more than tripled
to reach $8.1 billion.Myntra.com.inc offered a rare peek into the Covid-era growth of its
Indian business while it battles Walmart Inc. in its biggest overseas market. The US online
giant said it has enabled exports of Indian-made goods worth $3 billion and created over a
million local jobs since it began operating in the Asian nation about a decade ago -- about $1
billion of that and 300,000 jobs since January 2020 alone. About 250,000 new sellers
havejoined Myntra. In since and more than 50,000 offline retailers and neighbourhood stores
are now on the platform, the company’s country chief said. Myntra’s total revenue witnessed
an increase of 37.6% from $280.52 billion in 2019 to $386.06 billion in 2020. All the regions
witnessed double-digit growth. Myntra’s online shopping segment specially the- grocery,
daily essential items witnessed a surge in orders as the physical stores remained closed for
the most part of the year. This was mainly due to the lockdown imposed in most of the world
because of the COVID-19 pandemic.

The market place model seems to have been working well for Myntra and the online apparel
giant is planning to earn 20-25 percent of their revenue from market place based model. But
the earning potential is easier said than tapped into. And therein lies the biggest challenge for
Myntra. Streamlining this transition from the prevalent inventory based model to the
projected market place based model is the next peak that beckons Mukesh the co-founder of
Myntra.
Prospectus and challenges of industry

• The past

At the time when e-commerce was gaining a foot in the door in the Indian markets, a plethora
of the Indian e-commerce websites realized the usefulness of the inventory based model
wherein the inventory of all the products that were promised to the consumer was placed
with the company itself. A major benefit of this model, as was the initial plan of the
companies and a major objective to be achieved, was that this model promised a greater
control over the distribution of their products and hence, over various facets of the service as
expected by the consumer. However, one would be remiss if the other side of this coin was
not taken into consideration: Higher inventory holding cost that the companies had to
bear.Considering the nascent nature of industry at the time of inception of these companies,
adoption of the inventory based model was justifiable as the companies wanted to earn
consumers’ trust first by exercising a greater control over the services provided. This is a
theory that did not just remain confined to the boardrooms of these companies as the e-
commerce category has done a commendable job of ushering in the new era of online
shopping in India.But the bane of any business model is that the profit/revenue earning rate
always overshadows the cash spending rate. The costs associated with maintaining titanic
inventories were starting to wean away the profits generated by their business activities. As
an expected result, the venture capitalists (the proverbial loan sharks) started tightening
their purses and maintaining a cool distance from the e-commerce sector. With this time
bomb ticking away merrily towards explosion, the demon named change reared its ugly face
and it became necessary for the companies to discover an as yet undiscovered platform, the
market place model.
 • The Present

The aforementioned change resulted in a wave rarely seen in the Indian e-commerce industry.
Gunning for lower inventory related costs, most of the companies have transitioned some part
of their operation on the market place based model. At present, it is kind of a hybrid model
(inventory + market place) wherein some of the offered products are kept in the organisation’s
own inventory and the rest are outsourced to the third party sellers. In 2011, when Snapdeal
changed its business model from being a “deal provider” to a mainstream online e-commerce
company, it adopted pure market place model and spearheaded a revolution towards cutting
back the inventory costs entirely. The Snapdeal-proposed business model attempted
replicating(in B2C market) what the most famous online retailer eBay does in C2C market. In
the pure market place model, the third party seller can directly sell the organization-offered
products to the end consumer. The site merely acts as a medium wherein both the parties can
interact and/or carry out any/all the facets required of a business communication. The
consumers are welcome to share their experiences about various service parameters like timely
delivery, product quality etc. These comments act as threads to weave a complex web known as
the “network effect” which leads the previously untapped consumer segment to start flocking
the supplier who has been able to garner most of the positive comments from the end users.
The result of these phenomenon leads to concentration of buyers to a few suppliers, a dream
come true in the retailing sector. So tremendous was the revolution sparked that the biggest
company in the Indian e-commerce landscape, Flipkart, too adopted the hybrid model with a
long term plan to go for the 100% marketplace model. The world’s biggest company in the e-
commerce arena “Amazon” has also made its presence felt in the Indian market with “market
place based model. But Amazon’s decision has been influenced by various regulatory factors
and current stage of industry.The major drawback in Inventory based model is the loss of
control on the distribution. It has direct impact on the service received by the end consumer.
Myntra has been known for its customer service and Bansal (founder) doesn’t want to
compromise on this aspect.Another question is what if the buyers select products from offered
by multiple sellers. The seller will not be receiving the order at a single go which might create a
negative impression in his mind.