This story dates back to 2010, when Mukesh Bansal, Ashutosh Lawania, Vineet Saxena, came together and started their own online business. Mukesh Bansal observed the growth of Flipkart and he was assured that coming generation would hold huge scope for e-commerce. But most of us are unaware that today Myntra is not same, when it was started. You will be surprised to know, Myntra initially started as personalized merchandise.
So, in 2010 when 3 of them started Myntra, it provided businesses with personalized products such as mugs, t-shirts, cups, pens, and so on, in bulk quantity. Numerous companies used to purchase these merchandise for their employees and this led Myntra to make a lot of profit.
This all seems very intriguing but there was a big flaw i.e. demand uncertainty. Let’s understand this, so companies used to buy these personalized merchandise for their employees only during the appraisal or during festivals. These purchases were done very often like once or twice per year. Due to this Myntra was only making profits during festivals and rest of the time went null because there was no demand.
Mukesh Bansal’s vision
Mukesh Bansal had one vision towards the company, that he wanted to add value to other people’s lives, something which can be impactful. Although, personal merchandising was a very niche business so it couldn’t bring change or impact towards others. That’s the point where Myntra revamped itself and became what it is today. Myntra was established as a fashion e-commerce store, but nothing is just right without its limitations and that was e-commerce skepticism in other terms, fear of online shopping.
During 2010, online shopping was not much recognized by the people nor people had much awareness about it. The problem starts when people already had fear of online shopping and on top of that it was all related to fashion industry. Whenever we wear good clothes and footwear or when we dress well we feel confident about ourselves and when people compliment us we feel more pleasant.
Now, this doesn’t happen with each and every product that you use, for instance if you iPhone then each time people won’t compliment about it that’s the major reason why people spend so much time and money while buying. Earlier, people were hesitant about buying online in spite of getting many cashbacks and discounts, to resolve this problem Myntra came up with robust business strategy that was Easy Return. It may sound simple yet it proved to be goldmine for them.
Myntra’s business strategy
People tend to buy products when they touch and feel it to know better, but online purchasing always gave them chills that if they purchase the product and didn’t like it later then it will be waste of money. Here’s when Myntra’s business strategy came into play that was Easy Return policy. If people didn’t like the product then they can easily return it. After this policy people started purchasing online more and more.
In 2012, Myntra has 350+ Indian and International brands, till 2014 Myntra used to sell 1.5 lakh products of 1000+ brands. This whole situation gave rise to one question- Easy return policy could be provided by a any other similar platform but what was so special about Myntra? Let’s examine this carefully.
We often tend to purchase a product when we feel it will add value according to its price, but ladies and gentlemen this scenario completely changes when it comes to fashion. Clothes are purchased by 2 kinds of people, one who goes according to quality, second wo goes according to looks. People who goes after Looks doesn’t really care about quality whether its a premium product or not, although the look of the dress should be up to the mark. Second category people who goes after quality always check the fabric of the cloth, durable or not, how long can it last.
Fun fact: 80% of the women buy clothes for looks whereas 80% of the men buy clothes for quality. You might be thinking why it is like this? The reason is about status. We always want to keep our status, this changes according to time. It is said that men dress to impress women while women dress to jealous other women, well this can be true but no offense. We can even notice that men’s clothes variety are comparatively less than women’s. In middle of this how Myntra can assure that people must buy from it and here comes it’s value combination technique. It uses 3 value combinations i.e. are Variety, Easy returns, Price.
Reasons why Flipkart didn’t merge with Myntra
Now, you might be wondering, Why flipkart acquired Myntra, why didn’t they merge together? Here comes the explanation, in E-commerce business there are basically 2 types of model- number one is Market place Model, a platform where buyers and sellers come at on place where it helps sellers to connect with buyers whilst second model is Inventory model, where sellers stock their products with business where they get maximum sales. Quality is being checked and then goes to buyers.
Market place model is beneficial for those businesses who target a large group of audience, here you can purchase anything but there won’t be any guarantee of quality on the other hand inventory model is apt when audience is not massive and people often purchase selectively.
Moreover, Flipkart works on Marketplace model but Myntra always worked on inventory model. People face a lot of issues when they purchased from Flipkart whereas due to Myntra’s working model audience were quite satisfied because they focused on quality. This is the major reason why Flipkart did not merge with Myntra because if they did then people would definitely remained cynical about Myntra’s quality as well and this would have hampered their sales.
- Being flexible and changing according to trend & time benefits business. Myntra previously worked in B2B model but later seeing the change in trend they switched themselves to B2C model.
- Diversification won’t make you market leader. If a business is focusing on entering each and every niche then it won’t be possible for them to become market leader in every niche but if they focused about one niche, they may become market leader at a point of time. Just like Myntra did, it always focused on clothing and fashion and people prefer Myntra over others in case of clothing.