How Myntra Wins in the Indian E-commerce Market

Myntra, a household name in India, has revolutionized the way people shop for fashion. From its humble beginnings as a personalized gifting platform to becoming a leading fashion eCommerce giant, Myntra's journey is a testament to a well-crafted and constantly evolving business model. 

Bengaluru-based Myntra has announced a 25% increase in its total revenue, rising to INR 4,509.2 crore in the fiscal year 2023 from INR 3,609.9 crore in FY22. Despite the revenue surge, the company's net losses have widened, escalating 31% to INR 782.4 crore from INR 597.6 crore in the previous fiscal year.

Myntra attributes its revenue growth to its marketplace model, which enables third-party sellers to offer fashion products directly to consumers. This platform structure allows Myntra to collect transaction fees from vendors, which constitute the primary source of its revenue. Additionally, the company earns income through logistics, advertisement, and consultancy services. Recently, Myntra has expanded its business model to include sales of products under its brand.

In a recent positive turn, Myntra reported that its marketplace entity achieved EBITDA positivity in the last quarter of 2023. This milestone indicates a significant improvement in operational efficiency amidst the company's ongoing efforts to optimize performance and enhance profitability.

However, the financial report also highlighted a 26% increase in total expenditures, which rose to INR 5,290.1 crore during FY23 from INR 4,206.9 crore in the previous year, reflecting the costs associated with expanding services and market presence.

From Gifting to Garments: A Strategic Shift
The Pillars of Myntra's Revenue Generation

• Marketplace Model
• Fulfillment Services
• Advertising and Promotions
• Value-Added Services

Innovation and Technology: Driving Growth
Logistics and Supply Chain Management

From Gifting to Garments: A Strategic Shift

Myntra's story began in 2007 with a focus on personalized gift items. This strategic move allowed them to gain valuable insights into online customer behavior in India. Recognizing the growing potential of the fashion eCommerce market, Myntra pivoted its focus to apparel and accessories in 2010. This shift proved to be a game-changer, propelling Myntra towards becoming a major player in the Indian fashion scene.

The Pillars of Myntra's Revenue Generation

Myntra's success hinges on a multi-pronged revenue model, leveraging various streams to generate income. Let's explore these key components:

Marketplace Model

At the heart of Myntra's business lies the marketplace model. It acts as a platform for established brands and individual sellers to showcase and sell their products to a vast online audience. Myntra charges a commission fee on each sale, typically ranging from 4% to 5% depending on the product category and brand. This commission-based approach incentivizes sellers to list their products on Myntra, creating a win-win situation for both parties.

Fulfillment Services

Myntra offers sellers a range of fulfillment options, allowing them to choose the level of involvement in the order fulfillment process. These options include:

• Myntra Just-in-Time (JIT): In this model, Myntra takes ownership of inventory management and order fulfillment. Myntra bulk-purchases items from sellers based on predicted demand and manages storage, packaging, and delivery. Sellers benefit from reduced upfront costs and Myntra's efficient logistics network.
• Seller Fulfilled Model (SFM): Here, sellers manage their inventory and handle order fulfillment directly. Myntra's M-Direct program falls under this category, empowering sellers with more control over their operations.
• Hybrid Models: Myntra also offers hybrid models that combine elements of JIT and SFM, catering to sellers' specific needs.

By providing these fulfillment options, Myntra caters to a wider range of sellers, from established brands with robust logistics infrastructure to smaller players who might prefer a more hands-off approach.

Advertising and Promotions

Myntra leverages its vast user base and platform reach to generate revenue through advertising. Brands can pay to feature their products prominently on the Myntra platform, increasing visibility and driving sales. Additionally, Myntra offers targeted advertising solutions, allowing brands to reach specific customer segments. This not only benefits Myntra but also empowers brands to effectively reach their target audience.

Value-Added Services

Myntra goes beyond just being a marketplace. It offers a variety of value-added services to enhance the customer experience and generate additional revenue streams. These include:

• Myntra Insider: A loyalty program that rewards frequent shoppers with points, exclusive discounts, and early access to sales. This incentivizes repeat purchases and fosters customer loyalty.
• Private Label Brands: Myntra has launched its private label brands like "Moda Rapido" and "Highway," catering to different price points and fashion preferences. This allows Myntra to capture a wider market share and potentially generate higher margins.
• Alteration Services: Myntra offers tailoring and alteration services, addressing a pain point for online fashion shoppers.

Myntra - The Brand Which Revolutionized Online Fashion Industry

Myntra is one of the leading eCommerce brands in India. Here’s an insight into how Myntra became a go-to online fashion store for India.

StartupTalkyVidhi Punamiya

Innovation and Technology: Driving Growth

Myntra understands that technology is the backbone of a successful eCommerce platform. The company has invested heavily in cutting-edge technologies to create a seamless and user-friendly shopping experience. Here are some key areas of focus:

• Mobile-First Approach: Recognizing the growing dominance of mobile shopping in India, Myntra has prioritized its mobile app. The app offers a user-friendly interface, advanced search filters, and personalized recommendations, making it a convenient and engaging platform for fashion discovery and purchase.
• Seamless Navigation: The Myntra app boasts a clean and intuitive interface designed specifically for mobile phone usage. This allows users to browse through a vast selection of products with ease, regardless of their device screen size.
• Advanced Search and Filtering: The app provides a robust search functionality with various filters. Users can search by category, brand, price range, color, size, and even material type. This allows for highly targeted product discovery, saving users time and frustration.
• Personalized Recommendations: Myntra leverages user data and browsing behavior to curate personalized product recommendations. This ensures that users see products relevant to their style preferences and past purchases, increasing the likelihood of finding something they love.
• Visually Appealing Product Presentation: Myntra understands the importance of visuals in fashion eCommerce. The app features high-quality product images and videos, allowing users to get a clear view of the items before purchasing. Additionally, 360-degree product views and zoom functionalities can further enhance the user experience.
• Convenient Payment Options: The Myntra app integrates various secure and convenient payment options, including debit/credit cards, UPI, mobile wallets, and cash on delivery. This caters to diverse customer preferences and simplifies the checkout process.
• Engaging Features: Myntra's mobile app goes beyond just product browsing. It offers engaging features like "Myntra Insider" loyalty program access, wishlists for saving favorite items, and size charts to ensure a perfect fit. These features not only enhance the shopping experience but also encourage user engagement within the app.
• Data Analytics: Powering Personalization: Myntra leverages data analytics extensively to personalize the shopping experience for each customer. By analyzing past purchase behavior, browsing history, and demographics, Myntra recommends products tailored to individual preferences. This not only improves customer satisfaction but also increases the likelihood of conversion, ultimately boosting sales.

Logistics and Supply Chain Management

Efficient logistics and supply chain management are crucial for timely delivery and customer satisfaction in the eCommerce world. Myntra has invested heavily in building a robust logistics network across India. This network includes:

• Warehousing Facilities: Myntra operates a network of strategically located warehouses across the country, enabling faster deliveries and reduced shipping costs.
• Delivery Partnerships: Myntra collaborates with leading courier companies and third-party logistics providers to ensure efficient last-mile delivery.
• Technology Integration: Myntra utilizes technology to optimize delivery routes, track shipments in real time, and provide customers with accurate delivery estimates.

By investing in a robust logistics infrastructure, Myntra ensures a smooth and efficient delivery process, which is critical for building customer trust and loyalty.

Myntra's success story is a testament to its ability to adapt, innovate, and cater to the evolving needs of the Indian fashion consumer. By leveraging a multi-pronged revenue model, embracing technology, and building a strong brand presence, Myntra has carved a niche for itself in the competitive e-commerce market. As the Indian fashion industry continues to grow, Myntra is well-positioned to lead the way, shaping the future of online fashion shopping in India.

FAQs

Who are the founders of Myntra?

Mukesh Bansal, Ashutosh Lawania, Vineet Saxena, Sankar Bora, and Raveen Sastry founded Myntra in the year 2007.

How many users does Myntra have?

Myntra has 60 million average users as of March 2024.

Who owns Myntra?

Flipkart acquired Myntra in May 2014 for Rs. 2,000 crores.

What was the revenue of Myntra in FY 2023?

Myntra announced a 25% increase in its total revenue, rising to INR 4,509.2 crore in the fiscal year 2023 from INR 3,609.9 crore in FY22.