The Alpha Of Myntra!!
Now labeled by the media as the “Merchant of Fashion” in India, Bansal’s Myntra initially started out as B2B (Business to Business) company, catering personalized gift items to corporate firms before they delved into what they are now famous for- E-Commerce. Through their online retailing portal, they cater to customers all over India, giving customers the liberty to choose between 300+ brands- Indian and International.
Their Vision That Took The Market By Storm!!
With predictions that online portals and E-commerce websites could eventually swipe away a tenth of the total income of retail across the country, Bhansal’s goal from the very beginning was nothing short of clear-cut – to completely dominate the fashion and lifestyle retail market in the country. “We want to be the largest fashion and lifestyle retail in India, and whenever someone thinks of buying apparel, foot wear 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” says Mukesh.
Who Founded Myntra?
Getting back to its rudimentary stage of evolution to a giant E-commerce retailer, Myntra was founded in 2007 and headquartered in South Bangalore from a three-bedroom flat. Amalgamated by graduates from the Indian Institute of Technology, Mukesh Bansal along with Ashutosh Lawania and Vineet Saxena founded the very base of Myntra. Ashutosh Lawania and Vineet Saxena then stepped aside in 2010 when the company pivoted towards online retailing and branched into lines suiting their forte.
Following their merger with Flipkart, Bansal as well as Lawania are estimated to have a combined worth of more that 400-crores. With only their website estimated at a worth of $43 million, Myntra, following their merger with Flipkart could soon be in the billionaire club.
The Business Model That Separated Them From The Rest!!
Aware of their competition and the importance of seamless logistics – a make or break factor for any E-commerce company – Bansal and his board members decided to strategize on a hybrid logistic model, one that would firstly put them on the map and secondly further their reach to customers. By bifurcating their operational logistics between themselves and third-party distributors, Myntra was able to grasp a good section of the population with their efficiency and trust in meeting deadlines and their COD (Cash on delivery) mode of transaction being an additional bonus to customers. With logistics being the core of their infrastructure, Bansal is resolute on his delivery system and customer satisfaction remaining world-class, a good reason why they are now associated with international brands as distinguished as Nike, Puma and the likes.
The Investors That Believed In Their Ability…
A stepping stone to making Myntra a realization, Erasmic Venture Fund now known as Accel Partners invested in the proposed model laid by Bansal after they had shifted their course from dealing with personalized gifts. In addition to Accel Partners, Sasha Mirchandani from Mumbai Angels and several other angel investors contributed to set the base of this online retailing company. The very next year, about $5 million was raised by Accel Partners, IDG Ventures and NEA-IndoUS Ventures to aid the growth of the company. In Series B round of funding, they notched a decisive $14 million contributed by the likes of Tiger Global and their previous investors. In the final months of 2011, Tiger Global set up yet another investment, raising an eye-popping $20 million in what was their third round of funding. Three years later, detecting the potential Myntra had in the current market, Premji Invest and other angel investors invested a mind-boggling $50 million on the plate. The investment made Myntra almost overnight a retailing force to reckon with.
Initial Stages And Challenges That Made Them What They Are Today!!
Like most big companies today, Myntra too did have a humble beginning. Having worked in already 4 startup companies as a software engineer and product manager, Bansal decided it was time to branch of into something he would credit as his own. Together with Ashutosh Lawania and Vineet Saxena, also Indian Institute of Technology graduates, Bansal set up Myntra in 2007. The company focused on personalized gift items for corporate, which function on the wheels of a B2B (Business to Business) model. From T-shirts to mugs, teddy bears, wine glasses, calendars, pendants and anything under the sun that could be wrapped and presented, Myntra delivered it to unexpecting corporate recipients. Despite the company reaching its peak in 2010, Bansal’s vision prompted him to pivot the company’s focus towards online retail. A market that was fairly rudimentary in the current market at that time, and a glistening scope that could be unbracketed. His partners however chose to follow their own paths of interest when he began to promulgate his career shift.
What Made Them Successful?
Much of the success Myntra has achieved can be correlated to Bansal’s work ethic. His business acumen, ability to formulate a business plan that is more pragmatic than assumptious, set the rock-hard base for the company. According to him, “Without the help of the best team, the best technology and the best infrastructure, it is impossible to set up a successful ecommerce business in India. “The high bar the company has set for employees and recruits is yet another factor why the company continues to thrive with a starling financial growth every year. From making 9-crores in the first financial year (2009-10), to 773-crores the last financial year, the 78% jump in revenue is a validation of the popularity of the company and the trust customers share with them. And to make the numbers ever increasing, the company is resolute in its supply chain management and its employment of quality service providers to enrich the experience for the customers. To put the cheery on the cake, their association with Bollywood celebrities such as Hrithik Roshan, Kangana Ranaut, Ranveer Singh, Lisa Haydon and so on has put them in the limelight all year round.
Reason Behind Their Merge With Flipkart!!
In a bid to counter the threat of competitors Amazon, Snapdeal and offline retailors such as Reliance Group, Future Group and Aditya Birla Group, Myntra merged with giants Flipkart, handing over the ownership to Flipkart. While Myntra still functions as an independent body, the 2000-Crores (US$300 million) deal was an attempt to boost their market share from 50% to 70%. Common shareholders such as Tiger Global and Accel Partners were the catalysts in the merge.
Threats They Face…
Despite Myntra’s tremendous success and steady jump in revenue year after year, its incurred losses have once again put the company in a sticky situation. In the last financial year, they suffered a loss of 720-Crores, as compared to their earned revenue of 773-crores. The losses as stated by the chairman were threefold: Firstly, their shift to an only mobile app based site resulted in a drastic dip in sales, eventually prompting them to re-launch their website to lure customers back. Secondly, their discounted prices coupled with their promotional spending and advertisements have put the company on a back foot. Lastly, the high cost of logistics and delivery costs pack a huge punch to their profits. Although their losses have almost leashed their assailable growth to becoming the biggest E-commerce fashion company, Myntra’s CEO Ananth Narayanan believes that his company will enter the $1billion GMV (gross merchandise value) club by March 2017.
Controversies That Made Them The Talk Of The Town!!
Apart from the threat of the losses the company faced, Myntra was in the soup for allegedly promoting cow slaughter. According to activists, they were apparently selling shoes made from cowhide and rubbed salt on the wound by offering 80% discounts on these items, leaving the Hindu communities peeved by their naivety towards their sentiments. Aside from this issue, they were in the news in 2015 and 2016 when their logistic staff went on a strike to protest their poor benefits and wages and for breaching the Foreign Exchange Management Act.
“We will unearth the talent from every part of India and give them a platform to make it big.” – Mukesh Bansal