Myntra cuts discounts to protect margins, plans services such as try-and-buy and alteration
Narayan said that Myntra is cutting discounts by a percent every month and instead focusing on curated exclusive brands to drive customer stickiness.
“Three drivers of unit economics in the short term include cutting down on discounts, and supply chain costs including returns and focusing on superior consumer experience,” said Ananth Narayanan, CEO at Myntra. Narayan said that Myntra is cutting discounts by a percent every month and instead focusing on curated exclusive brands to drive customer stickiness.
About 20% of Myntra’s sales are from its private label brands, which it plans to scale up to 30% in the next one year. “Another core focus area for us is faster delivery and scheduled delivery,” explained Narayan. On the supply chain side, the company has figured out system to reduce the amount of travel a package needs to go through in a bid to cut costs.
“For example our air shipments have gone down to a quarter of what they were eight months ago,” commented Naranyan who was a McKinsey India director before joining Myntra in July, last year. According to Mukesh Bansal, Flipkart and Myntra target two very separate consumer segments, with Myntra focussing on brands and experience buying while Flipkart targets more conveniencedriven shoppers.
“Flipkart fashion is focussed on long tail. The selection is massive but the average selling price is abo-ut 30-40% lower than Myntra,” commented Mukesh Bansal. “India is seeing a generation of people that buy three times a month or five times a month.
But as we make progress in ecommerce, that group of people will be the real value drivers for Myntra. And I believe it will be difficult for any horizontal to create that kind of experience for the buyer,” said Subrata Mitra, partner at Accel Partners and a Flipkart board member.
In recent weeks, Indian startups have increased their focus on unit economics as funding slows and investors seek a path to profitability in exchange for more cash. Other startups looking to achieve the profitability mark this year include furniture marketplace Pepperfry, grocery retailer BigBasket and online marketplace ShopClues.
Flipkart acquired Myntra in 2014 for $370 million but the company has been running as a separate entity even after the deal closed. Even the logistics capabilities of Myntra are specialised and fashion focussed and have not been integrated with Flipkart’s logistics arm ekart.