Myntra experimenting with tech-led pricing
Startup plans to add more fashionable brands on its app as it eyes profitability
Myntra, the fashion unit of Flipkart, India's biggest online shopping company, is experimenting with technologies it is building in-house to fine-tune pricing, as it seeks to become profitable in the fiscal year ending March 31, 2017.
The Bengaluru startup is pushing ahead with an aggressive strategy of getting people to use its smartphone app, which allows the company to mine much more useful information on its buyers' habits. Coupled with this, is an effort to add fashionable brands, as Myntra expects sales of branded apparel to grow much faster.
“Online fashion consumers are largely brand-seeking. Brands will grow and define the future of fashion. We expect the branded fashion market to grow twice as fast as the overall fashion market in the next five years. We now plan to be profitable at scale in FY 2016-17, with consistently high growth rates,” Prasad Kompalli, Myntra's head of ecommerce platform, said in a press release.
Myntra currently sees some 8 million users active on its app, roughly double from a year earlier, CEO Ananth Narayanan said in a press conference in Bengaluru on Thursday. About 55 percent of these users are from outside the big metros, he added, suggesting the smartphone-led strategy is permeating into smaller cities and towns.
The average number of times a consumer opens up the Myntra app on her smartphone has also increased to about 12.5 times a month from about 9-10 in recent months, Kompalli said.
The "platform" is a catch-all term to describe the various technologies Myntra is building to interact with its consumers and the tools it offers the brands that market themselves to Myntra's app users. To that end, Myntra also holds "brand days" which bring together a narrative comprising text, images and video and social media interaction for a particular brand to promote itself on Myntra. The one held on Wednesday involved Nike Inc.
It is like "a brand almost takes over our app for a day", Narayanan said. Myntra is becoming a very important marketing platform for fashion brands to reach Indian consumers, Kompalli added.
With all these efforts, "the core of the code, the platform, the technology, we build in-house," Narayanan said. The platform also includes all the backend software programs that analyse data and throw up useful information about buying habits – data, which Myntra can share with the brands listed on its site.
Currently, international brands such as Nike account for only about 5 percent of Myntra's undisclosed revenues, but it’s expected to triple by 2017.
As more people take to the app, Myntra's understanding of its consumer grows. While it is early days, it is beginning to allow Myntra to tweak prices based on consumer insights. "We are taking a technology-led pricing approach," Kompalli said.
The privately-held unit achieved $800 million in gross merchandise value in "annualised" run rate in January – meaning if it kept selling the same value of goods that it did in January through December, it would hit that number. But Myntra expects sales to grow to raise that run rate to $1 billion in the coming months and quarters, Narayanan said.
