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  1. ‘The level of discounting has to come down’: Ananth Narayanan, CEO, Myntra & Jabong

‘The level of discounting has to come down’: Ananth Narayanan, CEO, Myntra & Jabong

Both the End of Reason Sale (EORS) and the Big Brand Sale (BBS) did well. Roughly, we have been seeing a 50% growth; in EORS we saw around 20 million users actually come to the platform.

By: | Updated: February 27, 2018 7:36 AM
myntra, Ananth Narayanan, Jabong Flipkart-owned online fashion retailers Myntra and Jabong are scaling up aggressively through improved customer experience, using new technologies and lessening discounts by pushing exclusive brands.

Flipkart-owned online fashion retailers Myntra and Jabong are scaling up aggressively through improved customer experience, using new technologies and lessening discounts by pushing exclusive brands. As Myntra explores an omnichannel play with an increasing offline presence, Jabong is trying to target premium customers. Ananth Narayanan talks to BrandWagon’s Chandni Mathur about the distinct strategy for the two brands ahead. Edited excerpts:

How was your performance at the recent sale? Does it reaffirm your belief in basing Myntra’s business model on discounts?
Both the End of Reason Sale (EORS) and the Big Brand Sale (BBS) did well. Roughly, we have been seeing a 50% growth; in EORS we saw around 20 million users actually come to the platform. This was also our most profitable EORS because we were able to manage the traffic as well as our margins. During EORS, about 1.7-1.8 million customers shopped/purchased; 60% of our sales were from tier II and tier III cities, which is also one of the things we had planned because we wanted to use the penetration from these cities. From a category standpoint, sports was the most popular one. The other thing that worked well was the introduction of social shopping with Myntra Shopping Groups. BBS just concluded and we saw a 40% growth from the previous such sale. Between Myntra and Jabong, we are trying to reach mass-premium and premium customers. With our level of discounting, on an average, we are 10-15% lower compared to the horizontal players. One of the things we check is how can we use more personalisation and customisation, and how do we push more exclusive brands on Myntra and Jabong to reduce discounting. One of our big pushes to profitability is that the level of discounting has to come down. The other big push is the private label business.

What traction do you see from smaller towns? Are metro markets getting saturated?
If you look at a five year view, I see anything beyond tier I growing dramatically faster because GDP per capita is growing and hence consumption is increasing. Also, given the mobile phone penetration and cost of smartphones coming down, I expect a significantly larger chunk of growth even in our mass-premium category. Historically, our number from tier II and beyond has been 55% of our revenue share; I see that number going closer to 60%. I don’t think metros are saturated as the overall fashion and retail market in the country today is worth around $100 billion. The organised market stands at around $25 billion which is branded fashion, while online fashion is at $3 billion; so we are very small. But my overall guess is that online fashion will be worth $20-25 billion in a year or two, with increased offline to online conversion.

How does the concept of social shopping work for you?
I think it is still early stages. If you see people shopping offline, they mostly go in a group and get their friend’s opinion, etc — that does not happen online and it is a very isolated shopping experience. So Shopping Groups is one of the things we have tried. We are now in the process of creating V2.0 and V3.0 (app version); V.1 allows you to add up to 3-15 people on your shopping group and shop together. When you reach a certain milestone, you get some rewards like early access and discounts to encourage groups to form. In the next six months, you will start seeing more features on the Myntra app that will allow for more social shopping.

We see several celeb fashion lines on Myntra, while Jabong has more international brands. How differently is Jabong positioned from Myntra, with both competing in the same space?
There is less than 30% customer overlap between Myntra and Jabong, which was the same number before we acquired them as well. Both are participating in the growth and not necessarily competing with each other. Having said that, we do intend to keep the brands separate; obviously we have combined the supply chain. Myntra is much more mass-premium and trendy while Jabong will become much more premium and individualistic. It also caters more to women and is more metro-centric. The second separation is geography; the third is gender and that is reflected in the selection that we have on each of the platforms.

Myntra is making a lot of investments in technology. How is data mining and AR/AI helping?
I believe we are a tech and fashion company. I fundamentally believe fashion is a browse experience. So our shopfront is built around that. Fashion, size and fit are a big problem, so on the Myntra app we have an AR-based shoe size finder where through your phone you can view your foot and get an accurate shoe size. Likewise, we have a technology which creates looks; so if you buy a top, it will suggest accessories, etc to go with it. This is all done through AI and machine learning because at our scale with 20 million monthly active users, it is difficult to create looks manually.
The second is Rapid which is using AI to design fashion. Brands like Moda Rapido and Here & Now are powered by AI, and are amongst the highest performing brands on Myntra today. We have also started giving this as a service to our brand partners and have signed up three customers. We are also using data and AI in our supply chain wherein we can increase the speed of delivery.

What will be your omnichannel play in the future?
We are going to be an online player primarily. Online will be our biggest volume. For omnichannel, we are thinking of it in three ways. First, we are opening a few stores for our private brands but it will primarily be around brand building and marketing. What we find is that online sales start to increase when you have an offline presence. We tied up with Mango and Espirit, and will open about 40 stores over the next four years primarily in metros. We want to control the entire offline-online presence for the brand in the country. The third approach is working with our multi-brand partners to create a digital platform that enables returns and pick-ups from anywhere, and we are working with two-three leading brands today to do an integration that will make this happen. We also have one Roadster store, but it is likely that over the next year or two, we will create 10 more stores.

Chandni.Mathur@expressindia.com
@chandni_mathur

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