Fashion e-commerce major Myntra plans to shut its website down to become a mobile-only app-based retailer, according to a report in The Times of India. Myntra was acquired by Flipkart in 2014 and this development is likely to have been pushed by Flipkart as part of its drive to move to mobile.
The data in the report mentioned above shows that Myntra gets about 80% of its traffic and 60% of its total sales through its mobile application. The plans are aimed to take the sales number to 90% by the end of the year. When that number is achieved, the fashion e-commerce major will most likely shut down its websites according to sources. If it happens, it will mark the very first instance of an Indian online e-tailer going only mobile and abandoning the web + mobile format that is prevalent in the sector now. It will be very interesting from both the customer and the scalability angle. The whole sector is eagerly poised to watch what happens as a result of this.
According to Mukesh Bansal, co-founder of Myntra and CMO of Flipkart, the growth on the mobile platform has been rapid because the fashion shopping segment is based on end user behavior that is quite impulsive. Myntra will focus on the mobile platform and will be making major investments on the mobile platform and related activities going forward. This is a clear indicator that they are very serious and completely convinced that this move will improve profits and help overall performance to increase considerably.
Myntra is currently said to be on its way to complete Rs 2,000 crore in sales or gross merchandise value (GMV) for the current financial year. GMV is the term that denotes the overall revenue generated by online retailers through sale of goods on the online platforms. Out of the total GMV, the web site makes around 5% to 20% depending on the category of goods being traded or sold.
In the fashion category Myntra’s biggest rivals are the Global Major Amazon and Indian cousin Snapdeal. Amazon recently started actively engaging in the fashion category in India, whereas Snapdeal is on track to achieve a projected number of $1 billion in sales under the fashion category. The whole sector is poised on top of some big numbers now and this will be a keenly fought battle on all fronts.
Second only to the popular electronic goods category, fashion is the category which makes the most money in the e-commerce sector. It accounts for nearly 30% of the GMV according to Morgan Stanley.
All this is business talk, what does this mean for the customer, very simply put, you need your phone to buy stuff from Myntra from May 2015. This is a good thing. People are already banking and paying bills from the mobile in the urban areas. But our worry is about the Tier 2 cities where both smartphone and internet penetration are low.
In such places, the desktop website is a boon for buyers who do not want to go and battle traffic to buy things. This looks like a bold step by Myntra, only time will tell if this gamble pays off in a big way. As far as the major/metro cities are concerned this is very welcome! In fact, shopping with the smartphone is a blessing to many. Let us wait and watch where this bold step takes Myntra. And we are sure that all their competitors are waiting with bated breath to see this too! Game on!