Fashion retail website Myntra is expected to shut down its website in favour of moving all operations to its mobile app. Myntra was acquired by Flipkart last year for a sum of Rs 2,000 crores. Myntra may look to phase out its web presence completely in a strong testimony to the exponential growth of mobile internet in the country. This will be the first such instance of a mainstream online retailer morphing into a mobile-only player as internet usage over smartphones surges in India.
Myntra, which draws as much as 80% of its traffic and 60% of sales from its mobile application, is expecting to take that number to 90% by the year end, which is when the e-tailer’s web portal may cease to exist, people familiar with the development.
Mukesh Bansal, co-founder Myntra & CMO at Flipkart, said mobile as medium has grown rapidly for all e-commerce players but more so for the fashion e-tailers.
Bansal, however, did not confirm the plans to phase out the website in the backdrop of such phenomenal traction that mobile’s getting among Indian shoppers. “Shopping for fashion is largely impulse-driven and that’s why the vertical has done so well on the mobile. We are 100% focussed on mobile and making all our investments on the platform going forward.”
While fashion for Flipkart and Myntra is expected to close at $1 billion in sales for the current financial year, Myntra independently is on course to clock Rs 2,000 crore in sales or gross merchandise value ( GMV) at a current monthly run rate of Rs 300 crore. GMV, in e-commerce parlance, is the overall revenue generated by an online retailers through the sale of goods on its platform. E-tailers usually make anywhere between 5% and 20% of GMV depending on the category.
Fashion unlike electronics, particularly private brands, offer e-commerce players better margins. Going forward, Myntra will look to build more of its own brands in partnerships with celebrities, sell its private labels on other portals besides hunting for acquisitions in the fashion space.
Flipkart, along with Myntra, is expected to be burning anywhere between $20-30 million on discounting, marketing, and ramping up its employee strength in a bitter battle for market share. Its two biggest rivals, Amazon and Snapdeal, too, are also guzzling millions in cash to discount products even as they scale up their GMVs.
Delhi-based Snapdeal also claims to have hit a run rate of a billion dollars in fashion sales, with 65% of its overall transactions being done over the mobile. “Several leading Indian e-commerce players have seen mobile contribute to greater than 50% of transactions today from under 5% a year ago. In the social-commerce space LimeRoad, for instance gets 70% of its users on mobile and more importantly, these users are three times more engaged and likely to buy as compared to desktop users,” said Tarun Davda, director at Mumbai-based early-stage venture fund Matrix Partners.
Fashion, which includes accessories and footwear, is the second largest category online, after electronics, in the $3 billion strong Indian e-commerce sector, accounting for almost 30% of GMV, a recent report from Morgan Stanley said.