How Myntra Destroyed Flipkart in Fashion E-commerce ? Myntra Business Case Study

Do you know why Flipkart bought Myntra? Okay let it be. Do you know how Myntra became India's biggest fashion e commerce company? Today Myntra delivers 1 lakh+ orders everyday. But now the question arises, that clothes and shoes are also on Flipkart and Amazon then what Myntra do that it is leading the market. And most importantly what are those business lessons we can learn and implement in our business.

 The story starts in 2010, when Mukesh Bansal, Ashutosh Lawania and Vineet Saxena this three people plan to establish an online business. Mukesh Bansal saw Flipkart's growth. And from this he knew that upcoming time is of e-commerce. But do you know that what Myntra is today was not like this when it started. You will get shocked after knowing that Myntra started from personalized merchandise.

 In 2010, when this 3 people started Myntra, Myntra provided businesses personalized t-shirts, cups, mugs, pens and sold them in bulk to them. Companies used to buy personalized things for their employees from Myntra and Myntra used to make lots of profit. But there was a big problem. The problem was Demand Uncertainty. Any company for their employees used to buy cups, bags, hoodies ,T-shirts, pens only during appraisal months Diwali or during functions. The problem was that any company only used to order once or twice per year. So during festivals Myntra used to make huge profits but other than that they used to wreck flies. Because there was no demand in the market. Mukesh Bansal only had one vision to create something which can impact everyone's life. But personal merchandising was a niche business. Through that they didn't impact anyone's life. And after this moment, now that Myntra started which we all know.

 Myntra decided to enter in fashion e-commerce. But there was a huge problem in the market. that was E commerce Scepticism. In simple words, fear of online shopping. During 2010s online shopping was not that prevalent. People used to fear to shop online. But a bigger twist comes when this things are connected with fashion industry. Fashion is directly linked with our Endorphins. Clothes and shoes are those things which makes you happy when you try them. You also feel nice people complement you. Whenever you will feel happy your brain release Endorphins. And whenever Endorphins are released your self-esteem rise. But interestingly, this doesn't happen with every item regularly. For example if you use iPhone then do you feel nice about you whenever you check your phone. How many people complemented about your iPhone? Maybe someone only did. This things happen with clothes. People compliment you about your clothes. That's why people take time to choose clothes of 500 rupees or 5000 rupees. Because no one want to mess with their Endorphins. Due to this people used to hesitate to buy online. Even if you give discounts, free delivery or CashKaro - which gives you cashback on shopping on Myntra. But still people don't want to buy clothes online. So to solve this problem Myntra used a powerful business strategy. 

The strategy was Easy Returns. It sounds simple but understand this deeply. People didn't bought these things because they were used to buy after touch and feel. And even if someone bought online they always used to worry. What if the thing would not be good then what will I do. To remove this fear Myntra used easy returns policy. You buy them and if don't like return them. And after this small change Myntra made people addicted to online shopping. In 2012 Myntra had almost 350+ Indian and international brands. And till 2014, Myntra used to sell 1.5 lakhs products of 1000+ brands. The question is that easy return policy could given by anyone and other e commerce companies also gave it, but why was Myntra so successful ? So understand this carefully. You purchase anything when you find its value more than it's price. But when it comes to fashion, the game changes. So only two types of people buy clothes NO 1 - LOOKS NO 2 - QUALITY Let me explain. NO 1 - LOOKS This type of people only purchase clothes for looks. They don't care about cloth's quality, its top-notch or not. But dress should be very good in looks. NO 2 - QUALITY This type of people always check quality for buying clothes. They always check cloth's fabric, its soft or not, its durable or not, how long will it last. Let me share a fact, 80% women buy clothes for looks 80% men buy clothes for quality. Now you would be thinking WHY??? 

So the answer is Instruments of Status. We keep those things with us which raise our status. And these things change time to time. Like when you are small you want to gear cycle, iPhone in youth, after that a luxury car, these all things are instruments of status. To show our status little above. But for women their biggest status of instrument are clothes. Not being sexist but, Man dress to impress women but women dress to jealous other women. And due to this reason girls have more clothes than boys. In market also variety of men's clothing is less comparatively to women. But how Myntra makes sure that most of the clothes people have should be ordered from Myntra? And here comes Myntra's Value Combination. Myntra made a combination of these 3 values. NO 1 - VARIETY If you look on Myntra you will find many variety. The cloth you want you will get. NO 2 - EASY RETURNS Suppose you ordered clothes from Myntra and didn't liked it or it's not of your size, then you can easily return it. NO 3 - PRICE You will mostly get clothes on discounted rates on Myntra. And today is Myntra's Festival Sale. So when Myntra provides this powerful combination, so people tend to buy clothes from Myntra only. And from 18th Dec, there's Myntra's sale where there are many discounts. So I say if you did so much than do this much little also. 

Why Flipkart bought Myntra? And acquired but why didn't merged with them? So in 2014, Flipkart acquired Myntra but didn't merged with them. Now the question comes, if don't want to merge then why they acquired ? So in e commerce business there are two types of models. NO 1 - Market Place Model Which means there's a market place where different sellers and buyers come. This place connects buyers and sellers like Flipkart and Amazon. So in Market Place Model goods move from sellers to buyers. But this is not the case with second model. NO 2 - INVENTORY MODEL In inventory model, the sellers keep their stock with the business through which their maximum customers come. There they are checked, quality checks are done and then from their it moves to buyers. Market Place Model is good those businesses which target diverse audience. In this selection is very massive but no standardization. In simple words you can buy anything from here but it is hard to predict the quality of these products. Whereas Inventory Models for those businesses whose audience are not diverse. 

Here people only come for specific purchase. And when we talk about fashion, quality of selection is a priority for you and as well as me. Flipkart operates on Market Place Model but from starting Myntra operates on Inventory Model. People faced issues on Flipkart during clothing and fashion shopping. And this thing Flipkart knows from starting because it will always happen in Market Place Model. But not with Myntra. Myntra's shopping experience was much better than Flipkart. In fact today also. Majority people faced less issues on Myntra than Flipkart. Flipkart acquired Myntra because they didn't wanted to miss fashion and clothing segment in E Commerce. But the reason behind not to merge was something else. So the reason was Complementary Strength but Individual Identity. So if a person want to online buy a small thing then he will go to Amazon or Flipkart. But if someone wants to buy clothes online, then people prefer to shop from Myntra. Why??? Because people know they will comparatively face less quality issues on Myntra. Flipkart's brand identity is like mall but Myntra's identity is like a private tailor. Where you will get clothes of your choice, size and also fashion. 

 Flipkart had funds and logistic network whereas Myntra had strong inventory management and niche audience. This acquisition was beneficial for both. But if Flipkart merged Myntra with it, the people associated with Myntra's brand identity will get confused. People would become sceptical with Myntra. Because in their minds they would have Myntra's Quality control and Flipkart's market place's combinational potrayal. Like how Kingfisher did with Air Deccan. Acquired company in 550 Cr and then converted Air Deccan into Kingfisher Red. Then people started getting confused between Kingfisher and Kingfisher Red. 

And for this reason, Today also Flipkart and Myntra are both different companies. And most importantly what are those business lessons we can learn and implement in our business. NO 1 - ADAPTABLITY IS THE KEY TO SURVIVAL In every industry some changes come time to time. Time changes, Technology changes and Consumer behavior also changes. And so its important to change with time. When Myntra started it operated on B2B model but by time they converted themselves to B2C Model. NO 2 - FOCUS IS A GATEWAY Diversification is a good thing. But don't expect you will become market leader in every businesses.

 This is practically impossible. But if you focus only on business than there are chances that you will become market leader of that market at one time. And this thing Myntra did. Myntra was hyper focused on fashion and clothing and didn't even try in other businesses. And that's why they are leading fashion e commerce in India. NO 3 - BUSINESS BEFORE PRIDE Henri Fayol's one of the greatest principle is - "Subordination of Organization Interests to Personal Interest" In simple words, company's interest should come before your individual interest. Flipkart could easily merge Myntra under it and they would also feel pride. Then Myntra would have failed today. So always keep business before pride.

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