Business Model of Myntra

Business Model of Myntra – Analysis by Unicoromy

Business Model of Myntra

Myntra – The App only Fashion Retail E-Commerce player, is the blue eyed boy of the Indian StartUp Ecosystem, because it achieved the ultimate feat of a VC funded company being acquired by a larger player.   Its Business Model revolves around retailing of high margin apparel over its app (earlier website as well).

About Myntra, Facts, Founders, Funders & Funding

Funding received by Myntra: Appx 160 Million USD. (as of May 2014, Post which it was acquired by FlipKart for about 2000 Crore ~ 300 Million USD).

Myntra Founders:  Now a Part of FlipKart so Founders really are not there (Mukesh Bansal Left FlipKart to StartUp Again [Update: His Health Care StartUp Raised 15$ Million from Accel].

Myntra Valuation: As of August 2016 their Valuation was about to Touch a Billion USD on account of high volume of sales.  With their latest Acquisition of Jabong.com – they are positioned well in the market to cross the unicorn valuation mark.

Business Model of Myntra

How Does Myntra work: Myntra is an e-commerce portal operating via the App only mode, B2C shopping Portal, only for customers ordering the merchandise for delivering in India. The model here is : App > List Sellers who sell the various apparel from the list of products that Myntra Sells > Get customers to view the products > Customer Shops for the desired products > Myntra arranges for the products to be shipped to the customer > Product Accepted and Not returned back > Seller gets his agreed price of the product minus the commission charged by Myntra after a specified period of the time.  Thus the core bread and butter of the Model is “X% commission on the total sale value given to the seller”

For branded stuff, it used to be procurement from brands at X Price and selling it at X+Y price. Later they pivoted into a Marketplace model where every seller who makes a sale pays a commission to Myntra.

You may also be Interested in Reading: Business Model of FlipKart

The sale happens via multiple channels as listed below & For all the sale achieved by Myntra for a particular seller it will charge a percentage (%) cut on the total sale amount excluding taxes and settle the total amount payable to the seller after X days.

  1. Direct via Website (Discontinued) [Update : It has started again 🙂 ]
  2. Direct via Web-App (Discontinued) [Update : It has started again 🙂 ]
  3. Direct via Tele Sales (Customer calling and Placing order – Happens rarely now) Discontinued
  4. Direct via Mobile App (Android or iOS or others)
  5. Via Affiliate networks (Bloggers, Coupon Websites, Review Websites etc – Happens via 3rd Party Affiliate Networks)

The percentage commission varies on the type of product that Myntra facilitates.  It may range anywhere between 5% to 20% of the sale value (excluding taxes and discounts).  The following is an e.g. of how the billing of Myntra sale will be recorded in Myntra’s financial books:

Customer A, B & C Purchase 5 Products from Myntra in a month and these are from 3 different Sellers.  Invoice for the Month for Myntra looks like below table (Click to Expand):

Business Model of Myntra

The total of Col I will be the total revenue of Myntra from that particular sale, now the numbers here are small and are taken for the ease of calculation, in actuals these numbers are hefty and run into millions of dollars.  This is the basic bread and butter for Myntra.

You may also be Interested in Reading: How does Amazon Make Money

There are 100’s of similar players out there for e.g. Jabong (Backed by Rocket Internet, Now a part of Myntra itself), Amazon Fashion, FlipKart Fashion, SnapDeal Fashion [SnapDeal wanted to acquire Jabong and missed], Zovi, YepMe etc.

How does Myntra Make Money

Myntra may also be making some money out of selling their inhouse brand online (I don’t know whether they do that but it is a likely extension of their reach).  Basically they will buy it from a local manufacturer, rebrand it as their own brand and sell it off on their app, because this will give them better margins as compared to their commission model.

[Update: They are strengthening their In-House brand for sure, how I know that? It is by this, that they acquired majority stake in HRX {owned by Hrithik Roshan} for 50$ Million and also wanted to acquire India rights of ForEver 21].  I think they are going the ZARA Way of Fashion Retail.

Apart from apparel they also sell associated merchandise like accessories, which are even higher margin and higher commissions.

This was all about Business Model of Myntra.  Hope you have enjoyed reading the same. Please subscribe for more interesting stuff and do drop in your comments about the same in the section below.

Disclaimer: The analysis of the Business Model of Myntra or How does Myntra Make Money is of the Author’s himself, neither the company (Myntra or FlipKart) or its affiliates / associates have confirmed the same to the author and the descriptions, stats, facts and figures are either obtained through secondary web research or interrogation of the users / sellers or other resources on the web. Please use your own discretion to use this info when required and by continuing to read you agree to indemnify the author from all liability arising out of using this info on your own.

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