Why Myntra’s App only was a Flop only

The story begins when the three IIT Kanpur alumni Vineet Saxena, Ashutosh Lawania, and Mukesh Bansal met together for a startup by themselves in early 2007. As a B2B platform for personalised gifts, Myntra was the market leader in the next three years.

Between 2007 and 2010, Myntra’s website allowed customers to purchase personalized products such as T-shirts, mugs, mouse pads, and the likes. Sooner, when e-commerce becomes more familiar to Indian customers, Myntra pivoted to becoming a retail marketplace.

Here are Myntra’s few startling turning points

• January 2007 — Myntra launched as a gift personalisation platform
• March 2011 — converts to the marketplace model
• May 2014 — acquisition by Flipkart
• May 2015 — goes app only by shutting down its website.
• August 2015 — Mr Ananth Narayan takes over as the new CEO.
• May 2016 — returns to the desktop version.
• June 2016 — launches ‘try on delivery’.
• July 2016 — acquires rival Jabong to become India’s largest online fashion platform.
• August 2016 — crosses 1 billion GMV (Gross Merchandise Volume) run rate.
• December 2016 — reports 80% annual growth.
• September 2017 — negotiated the rights to manage 15 offline stores of Esprit Holdings in India.
• October 2017 — Partnered with Ministry of Textiles to promote handloom industry.
• April 2018 — Acquired consumer IoT (Internet of Things) wearables startup Witworks.

Myntra is India’s most preferred online platform to choose wide varieties of apparels, accessories, cosmetics and footwear from over 500 leading Indian and international brands. They offer an array of latest and trendiest products bringing the power of fashion to their shoppers.

Myntra, now the leader of India’s online fashion commerce had a decade-long run with a graph of great growth, but with some major ups and downs. Within these years, it witnessed many investments and acquisitions and many strategies of which some worked and some didn’t.

Myntra was not on the toppers list until 2013. Jabong, which had entered the space in 2012 with $500 million valuations was the undisputed leader then. Not surprisingly, Jabong was Myntra’s greatest rival.

The acquisition of Myntra by India’s largest marketplace, Flipkart in 2014, when Myntra struck a value of $300 million was known to be the greatest in history. And of course, the major milestone in its journey.

Flipkart had been exploring multiple ways to strengthen their presence in the fashion domain and the acquisition of Myntra seemed the best way to do that. Since the investors of both companies are the same (Tiger Global and Accel), they eventually found a common ground.

The deal enables fashion and technology to come closer and contribute to the growth of the former.

Two years later, the Flipkart owned Myntra acquired Jabong for just $70 million. It was indeed a blow to Flipkart’s biggest competitor Amazon, for which the fashion category was a weakness.

The app-only Move

We heard that shocking announcement from Myntra on 10th May 2015. It said it would shut down its website version and serve customers exclusively through its mobile app, starting from 15 May. Myntra had discontinued its mobile website earlier, for the progress of its app.

Though they justified their decision by stating “95% of traffic on its website came via mobile devices, and 70% of its purchases were performed on smartphones’’, the move received mixed reception and resulted in a 10% decline in its sales.

In February 2016, Myntra acknowledged their customers regarding the failure of its app-only model and announced the revive of its website version. Since the relaunch of its mobile website in February, Myntra was facing immense pressure from its users to bring back its web presence.

Myntra then relaunched its desktop website on 1st June 2016, soon after the top-level management change including the exits of Myntra founder Mukesh Bansal and Chief Product Officer Punit Soni, who were into the app-only strategy at Flipkart.

“The company expects sales to grow by 15–20% this year on the back of re-launching its desktop website,” said the then Myntra boss Ananth Narayan in 2016. Fortunately, his words turned true and now, more than 20% of Myntra’s revenue comes from its website.

Smartphones aren’t yet an ideal device for shopping

Myntra had shut down its desktop website in May 2015 based on the traffic received via its mobile app. That was more than 90% of traffic and 70% of orders.

Many studies, including the ones done by Myntra itself, showed that though people spend more time on mobile than desktops, it has nothing to do with the improvement in app only purchases.

The only explanation for the switch back to the site version is that the fashion portal sees a significant number of shoppers during office hours, evident in workers getting delivery of goods in most office complexes across large metros.

The mobile app was in fact, a hindrance for these marginalised users to do their online purchases from office. Hence, the expected sales growth was attributed to their return for shopping on Myntra through their office PCs.

Also, smartphone devices may not have the same visual and functional experience of a computer, especially in choosing apparels. To date, Myntra remains the only B2C e-commerce platform that took the app-only route, albeit for just a year.

When we read between the lines of Myntra’s success story

Fashion is the highest margin category and it demands disparities. The ‘Flipkart Group’ that includes Flipkart, India’s leading e-commerce platform, Myntra which serves customers with trends in fashion, and Jabong for youngsters and students, now holds 70% of market share in India’s online fashion segment.

With a hit of $1billion annual run rate in 2016, Myntra is now targeting $2 billion run rate in 2018. In fact, Myntra is the first e-commerce player in India to turn profitable.

“We want to be the largest fashion and lifestyle retail in India, and whenever someone thinks of buying apparel, footwear or any other fashion and lifestyle item they should think of Myntra first. Even if they’re buying offline, they should check it out online on Myntra first and then buy it” said Mukesh Bansal, on his grand vision for Myntra. The vision came true by the later years, and now with the current statistics, Myntra is more than ready for a decade or even more.