Myntra Business Model: How Does Myntra Make Money
Myntra is an Indian e-commerce company specializing in fashion and casual lifestyle products. With a wide range of styles, trends, and brands, Myntra has emerged as India’s leading online retailer of fashion products. The company is an independent subsidiary of the e-commerce giant Flipkart.
Introduction to Myntra
Myntra was established in the year 2007 as an online platform for personalised gifts. It was founded by Ashutosh Lawania, Mukesh Bansal, and Vineet Saxena. Initially, the company followed the B2B model. In 2011, Myntra switched to online retailing of fashion and lifestyle products and had products from 350 Indian and international brands by the year 2012.
Flipkart acquired Myntra in the year 2014. However, Myntra continues to operate as a standalone brand. By 2014, Myntra had a huge portfolio of 150,000 products from over 1000 brands. Myntra shut down its website in 2015 in favor of its app but revived it in 2016 following a 10% decline in revenues, indicating the failure of its app-only model.
Myntra has partnered with many global fashion and lifestyle brands such as Nike, Adidas, Diesel, Timberland, and CAT. In 2016, it partnered with the Ministry of Textiles of the Government of India to promote handlooms. Myntra acquired its rival e-commerce fashion retailer Jabong.com to become the largest fashion platform in India.
|Mukesh Bansal, Ashutosh Lawania and Vineet Saxena
|Bangalore, Karnataka, India
Myntra Business Model Explained
Myntra follows the business-to-consumer model or aggregator model. The company procures products from various fashion brands affiliated with it and sells them through its dedicated website and application. Thus, Myntra acts as a bridge between the consumers and the fashion brands. Some of the major features of the business model have been listed here.
Myntra’s primary source for earning revenues is its commission model. The company charges a commission fee on each sale, which is determined based on the brand and category of the product. The commission fee usually ranges between 4-5%.
Myntra enables sellers and brands to display and sell their products through its online platform. The company charges a fee from the sellers and brands instead of providing an online marketplace to reach the customers.
Myntra collaborates with over 6000 fashion and lifestyle brands, including many popular names such as Biba, Nike, Hilfiger, Adidas, H&M, Levis, and more. The wide range of brands, including well-established global brands, has helped the company reach a diversified audience with different needs and budgets, thereby increasing the revenue flow.
Myntra offers its platform to various brands to market their products and services in order to reach a wider audience. Thus, the company earns a significant part of its revenues from advertisements carried on its platform.
Myntra focuses exclusively on fashion and apparel as its niche products. Consequently, it has created a specially curated selection of fashion products for the fashion-conscious audience. The company has successfully positioned itself as one of the most preferred destinations for fashion needs.
Moreover, Myntra works with popular fashion designers to create its fashion brands, which are launched as capsule collections. The limited-edition capsule collections enable customers to access unique and trend-setting fashion, making Myntra stand out among other online fashion retailers.
Myntra has invested heavily in technology as a part of its business model to enhance its customers’ shopping experience. The company offers customers a unique Virtual Try-On feature, enabling them to try on clothing virtually to check the fit and other details. Personalized buying recommendations are also made to the customers based on their preferences through an AI algorithm.
Urban Customer Base
Myntra has a huge customer base in the urban regions of India, especially among the middle-class segment, who want high-quality fashion apparel and accessories at reasonable rates. The company gets a high percentage of sales from tier-2 and tier-3 cities and metropolitan cities.
Myntra consistently launches highly discounted offers such as End of Reason sales, Diwali sales, and more, which attract many customers. For instance, the End of Reason sale in 2019 created a record by selling over 3.3 million products on the first day itself, with 1.77 lakh items sold within the first 10 minutes of the sales going live.
Myntra ropes in Bollywood celebrities and fashion icons of the youth for its marketing campaigns to influence the buying decisions of its target audience. The company also collaborates with high-profile fashion influencers on social media with huge followings to market its latest products.
Myntra has achieved a distinguished status in the fashion e-commerce market. The company keeps revising and improving its business strategies to meet customers’ changing demands and emerging market competitors.