Ananth Narayanan is on a mission. The chief executive officer of online fashion retailer Myntra wants to transform the way fashion—clothes, shoes, accessories—is sold in India and make Myntra the country’s first profitable e-commerce company.
“What excites me is the motivation to disrupt fashion. I truly believe it can be done across the value chain: how you build brands, how you distribute/sell them, how you offer services in a big way. This spring, summer, fall, winter concept doesn’t really apply to India. Most of the country experiences only summer. Some parts have summer and winter, not much else. So this traditional retail way of selling fashion is ripe for disruption. Using technology to solve fashion problems at scale is what is needed,” says Narayanan.
We’re meeting on a wet Thursday night at the Library Bar in Bengaluru’s Leela Palace hotel. It’s in the middle of the city, though it took Narayanan more than 2 hours to get there from Myntra’s office off Hosur Road, thanks to the city’s infamous traffic.
Narayanan is a wine lover. He has a collection of more than 800 wines at his house in Chicago. His favourite wines include Almaviva, originally made by the Rothschild family; Château Palmer; and Colgin, a Californian wine. He has even applied for a liquor licence in Karnataka, after a friend told him that he would need one if he wants to stock 100-plus wines at his Bengaluru home.
This evening, though, Narayanan is sipping a single malt, a newer love of his. He has ordered a Glenlivet (with some ice and water). I’m drinking Jameson Irish whisky. “Recently, I’ve started to favour single malt almost as much as wine. I also like Japanese whiskies like Yamazaki and Hibiki,” he says.
Narayanan joined Myntra in July last year after a 15-year stint with McKinsey & Co., the world’s biggest consultancy. Since then, the 39-year-old has orchestrated a mini-turnaround at the online fashion retailer. In May, before he joined Myntra, the company had ditched its website and become an app-only platform. The move alienated many customers, who flocked to Flipkart (Myntra’s parent), Amazon India and Jabong. And Myntra’s costs rose, with increased spending on advertisements and discounts, etc.
Narayanan’s first priority was to slash costs and get Myntra on the route to achieving profitability in a few years. By the third quarter of 2015, Myntra had reduced discounts by 6 percentage points and supply chain costs by 5 percentage points, compared to the preceding quarter. Increased use of technology and economies of scale helped bring down supply chain costs while Myntra cut discounts on popular products that customers were willing to pay full-price, or near full-price, for.
“We’ll be the first large e-commerce company to become profitable. If we continue on the path we’ve been on for the past nine months, it’s mathematically impossible that we won’t reach profitability (in two years or so),” he says.
While that may be true, Myntra’s chances of becoming profitable will depend on the company’s ability to ramp up its high-margin private brands and on how fast rivals such as Amazon India expand their fashion business, among other things.
But it’s clear that Myntra is in better shape under Narayanan. On the growth front, too, things are looking up. Myntra, which restarted its website in June, expects gross sales, net of discounts, to jump some 90% to Rs.5,000 crore for the year ending March 2017.
Narayanan is an engineer by training. Born in Chennai, he spent his childhood there and in Bengaluru, where his father held senior roles at Hindustan Motors and Bosch. He studied engineering at the University of Madras and then went on to do a master’s in industrial engineering and operations research from the University of Michigan in the US. He wanted to take up an engineering job after college and he was offered one by Cummins Inc., but he ended up joining McKinsey & Co.
He knew nothing about haute couture before Myntra—he had led the product development practice at McKinsey. To prepare for the Myntra job, he got some of his fashion designer friends to teach him the basics of fashion. Even now, he spends half an hour every week just learning about fashion. “Fashion is in the DNA of Myntra. You cannot run this company without knowing about it.”
This CEO of a fashion retailer now dresses for the part. This evening, he’s wearing a dark pair of jeans, a black shirt and sneakers.
Narayanan is part of the wave of consultant professionals hired for Flipkart-Myntra in 2015 by Mukesh Bansal, the then CEO of Myntra and head of Flipkart’s commerce platform. Apart from Narayanan, the list includes, for instance, Saikiran Krishnamurthy, the head of Ekart; Nitin Seth, chief people officer at Flipkart; and Ananya Tripathi, chief strategy officer at Myntra.
All these executives, and Narayanan, were drawn by the potential of e-commerce, which is leading the advance of organized retail in a country where a majority of sales happen at mom-and-pop stores and where organized physical retail is still inaccessible for an overwhelming majority of Indians despite two decades of effort by the likes of Kishore Biyani, the Tatas and the Ambanis.
Narayanan had risen to the top at McKinsey & Co., becoming a director. He had worked in four offices over 15 years: Chicago, Shanghai, Taipei and Chennai. But after a long, demanding career at the consultancy, he couldn’t resist the appeal of a booming e-commerce industry and a role in which travel wouldn’t be a constant.
“E-commerce is here to stay. I missed telecoms, I missed IT (information technology), so I thought I shouldn’t miss e-commerce too. And it may seem strange coming from someone who spent 15 years at McKinsey, but I had thought of leaving every two years. You’re not home four-five nights a week. That’s tough, especially when you have a family. Then, I genuinely liked Sachin (Bansal), Binny (Bansal) and Mukesh (Bansal), who are the only three people I met before joining,” Narayanan says.
Plus, he believes in being where the action is.
“The canvas has to be big. Fashion and lifestyle for me was the ideal category. It’s going to be the biggest category in e-commerce and it is potentially hugely profitable. On top of all this, it was an independent role. If I was leaving McKinsey I didn’t want to become a BU (business unit) head or a No.2 or No.3. So the role ticked all the boxes,” he says.
Narayanan is a workaholic. He wakes up at 6 and works about 14 hours on most days, 12 on good days and 16 on bad ones. His wife runs a family-owned chain of diagnostic-care units. He takes a break from 7-8.30pm every day to spend time with his three daughters, all of whom are in school. The family has two Golden Retrievers, both of whom he walks every morning.
In his free time (“what free time?” he jokes), Narayanan likes to read, host people over wine at his home and play tennis. He generally reads non-fiction—Guns, Germs, And Steel by Jared Diamond and Thinking, Fast And Slow by Daniel Kahneman top his list of favourites.
That Thursday, he was generous with his time. We had spent more than 2 hours, over three drinks each.
“More than managing time, it’s important to manage your energy. For instance, I spend one-third of my time on long-term things, one-third on short-term issues and firefighting and one-third on people. Among these, there are some things here that I love doing and some things that I have to do but I don’t particularly enjoy. I have an incredible assistant. She structures my day in such a way that my energy isn’t drained all at once. Otherwise, you can’t last,” Narayanan says.