3 min read.Updated: 04 May 2016, 11:59 AM ISTMihir Dalal
Myntra expects 15-20% of its sales in this financial year to come from the return of the website
Bengaluru: Online fashion retailer Myntra will relaunch its desktop site on 1 June, driving the final nail in the coffin of its failed app-only move.
The company said it expects 15-20% of its sales in the current financial year to come from the desktop website, highlighting the misstep it made last May when it went app-only.
“We found that while a majority of the growth is driven by mobile, the volume of users on desktop hasn’t decreased," Myntra chief executive Ananth Narayanan said. “We’ve launched a number of new categories such as home furnishing and (fine) jewellery where customers want to see the products on a larger screen. Finally, according to our data, women customers, who are a key area of focus for us, in particular, want to have the option of shopping across channels."
Myntra, which is owned by India’s largest e-commerce firm Flipkart, shut its mobile website in March 2015 and closed its desktop website in May 2015 in an attempt to dominate mobile app-commerce.
The majority of online retail, though not nearly all, is expected to happen through smartphones, particularly apps, by 2020.
To prepare the organization for this, Myntra became an app-only platform. Myntra’s app-only move was criticized by many analysts and investors as a bold but ill-thought out decision that would alienate many shoppers. Besides, with Jabong.com, Amazon India and Snapdeal trying to draw shoppers to their own platforms, Myntra took an unnecessary risk by closing an important channel. “Users in India still depend on large screens to shop online, a major chunk of these are office- going people. An app-only strategy has made e-commerce sites lose customer volumes which, in a market like India, is crucial," said Harish H.V., partner with consulting firm Grant Thornton India Llp.
After its app-only move, Myntra’s sales growth dropped before picking up again two months later.
Some other consumer Internet start-ups touted the app-only strategy but it soon became clear that shoppers wanted to buy products and services across platforms and not be forced to only use apps.
Mint reported on 30 November that Myntra and some other start-ups were reopening mobile websites in response to the backlash from consumers.
In February, Myntra reopened its mobile website, a precursor to re-launching its desktop site.
“It is part of the Myntra culture to try bold things. We tried to do this last year because we thought we can offer consumers a much better experience on the mobile. While that is still true that the mobile experience is far superior to the web, we have recognized that some consumers still want the option to shop on the web; we are humble enough to listen to our customers," Narayanan said.
Myntra has set a target of generating annualized gross sales of $1 billion by March 2017; currently, its annualized gross sales are $500-600 million. Gross sales exclude discounts and product returns. For instance, in the year ended 31 March 2015, Myntra’s actual revenue was ₹ 758 crore while its annualized gross sales were $350-400 million at that time. Losses for that year at the Bengaluru-based firm tripled to ₹ 1,126.60 crore, according to the documents filed with the Registrar of Companies.
Narayanan, who joined Myntra from consulting firm McKinsey & Co. last October, has also said the company will be operationally profitable by March 2017. Myntra is increasing sales of higher-priced products and charging customers for deliveries for certain items to cut losses. The company has also cut discounts and supply chain costs.
Myntra is reopening its website at a time when its parent Flipkart is striving to keep Amazon India at bay. Flipkart, too, reopened its website in November, eight months after shutting it. Flipkart had also planned to shut its desktop site like Myntra but scrapped the plan late last year.