wordpress blog stats
Connect with us

Hi, what are you looking for?

Here’s what Indian e-commerce companies think of Flipkart’s acquisition of Myntra

Flipkart acquired Myntra yesterday and put together, they control 50% of the online fashion vertical. That being the case, we spoke to several e-commerce players to understand how this affects them and the ecosystem in India.

VSS

*

Vijay Shekhar SharmaFounder and CEO of Paytm

Impact on the supply side: Consolidation is great for Industry as it will bring more sustainability to business. Suppliers need diverse platforms to sell so we believe it won’t have much impact there.

Will more fashion retailers gravitate to Flipkart-Myntra now?: Though it is absolutely a great deal for both companies, in the long terms, many brands and sellers don’t prefer single large channel for their sales. We believe Paytm will offer a strong long tail of distribution for brands and many sellers.

Impact on pricing: In the short term, there shouldn’t be much impact, but in long term, offers and freebies will cut down. I am sure it will happen across industry as we can now see free deliveries not being offered on every order by most players.

Impact on consumer demand: Mobile will be where consumer growth is and I am sure it will be a great win for consumers as companies are offering more and more of their mobile exclusives.

Advertisement. Scroll to continue reading.

*

avnish-stylistaAvnish Chhabria, CEO of Stylista

Impact on the supply side: While inefficiencies on the supply side have existed, we will see a clear operational efficiency development to streamline processes and improve overall consumer sentiment.

Will more fashion retailers gravitate to Flipkart-Myntra now?
With an investment of $100 million in the fashion space, there will be a great resurgence of domestic brands and a larger influx of international names taking notice of the large consumer intent in the fashion e-commerce space.
The combined muscle power will command better terms and higher margins from suppliers, as they now collectively reach 69% of the domestic audience. Hence a clear leader has been created. It’s an obvious choice and there is no room for second guessing that they have the highest registered users and conversions in the space, so it would be foolish not to be present there.
– But that would also mean far larger coherent competition within the Flipkart-Myntra ecosystem. The larger the mall, the more brands needs to fight for eye-space. That will become evident in the edge for smaller brands to survive. While the collective reach would create a leader, I think brands now need to look for multichannel strategies as the tipping point will be evident in a few years until brands realize the potential and create relevance.

Impact the pricing: Well, this is tricky, as most online shoppers are bargain hunters and brands are constantly forced to participate in this price war across platforms. There is a clear depletion of margin for brands. I feel comparables without the price advantage will suffer, hence competition will lead to price democracy and this is every shopper’s dream. This will lead brands to rethink their strategy and create a clear product differentiation and be more price competitive so as to sustain and add value for the online shopper.

Impact on consumer demand: This is the inflection point and the J curve kicks in, which will gravitate towards exponential growth and double digit consumer growth. It’s clear that we have the fastest growing internet population in the world, and with such a large consolidation the opportunity and exposure both for brands and customers alike will create a great retail experience.

*

swati-bhargawa-cashkaroSwati Bhargava, Co-founder & CEO, Cashkaro

On affiliate fees of Myntra and Flipkart: Myntra’s affiliate commission is based on a flat Rupee number per order that varies depending on whether you are a new or repeat customer of Myntra e.g. for all new customers, they usually pay about Rs 250 commission per order and for repeat about half of that. This also demonstrates their key objective of acquiring new customers and therefore, Myntra is happy to pay higher for that segment. Flipkart’s model on the other hand, is percentage based. They pay between 4-15% commission on every order depending on which product category you shop for.

Impact on earnings: As of now, our understanding is that Myntra will continue to operate independently so it remains to be seen whether their affiliate marketing policies converge to being the same as Flipkart or remain different. However if Myntra also starts paying based on percentage it’s likely that our earnings will go up! More generally, as the Flipkart-Myntra duo scale up and positively influence e-commerce growth in India, it will benefit Cashkaro.com too.

Advertisement. Scroll to continue reading.

Size of Flipkart+Myntra: Flipkart+Myntra together constitute about 25% of the purchases that go through our site. We drive about 40% more transactions to Flipkart than to Myntra. Given that products bought on Flipkart are often electronics, the average order value is often much higher than for Myntra.

*

ravitej-pennyfulRavitej Yadalam, CEO and Founder, Pennyful Online Pvt. Ltd

On affiliate fees of Myntra and Flipkart: It is important to note that Flipkart and Myntra offer two different types of commission rates. From Flipkart, the commission Pennyful gets is between a range of percentages depending on the category of the product. From Myntra, on the other hand, we get a flat fee depending on the type of user. If the user referred by us to Myntra is a new one, we get a higher fee than if the user was an existing one.

Impact on earnings:
It is too early to say at the moment, but from where we stand, it does not seem that this merger will affect us in terms of commission rates. But, this merger will result in a lot of cross-selling between the two companies and that should lead to an increase in sales, which obviously bodes well for us.

Size of Flipkart+Myntra:
Between Flipkart and Myntra, the total percentage of purchases stands at just under 30%. If I were to break this up between the two sites, I would say that Flipkart contributes to about 16% and Myntra contributes 12%.

*

anisha-mydalaAnisha Singh, CEO and Founder of MyDala

On affiliate fees of Myntra and Flipkart: Both have their positives and commission rates are typically negotiated with individual retailers with which we have contracts. Our commission rates vary based on both the retailer as well as the product category. Long-term, we prefer the percentage system as it aligns the interests of both the business we are promoting and ours.

Impact on earnings: No material impact. Our business is leveraged to retail (both offline and online). Online commerce is a very small fraction of all Retail ($650bn market est.) and our business earnings from Online players, although growing rapidly are reflective of it as well.

Size of Flipkart+Myntra: Across mydala coupons network, a mix of both offline and online merchants, we have on average 30 million monthly unique visitors, with a daily coupon transactions/downloads of 150k. In the online coupons searches on mydala, Flipkart followed by Snapdeal then Myntra coupons are the most searched.

We have also contacted Jabong, Amazon, Snapdeal, Zovi, Infibeam, Yepme but they haven’t responded. eBay declined to participate in the story.

Advertisement. Scroll to continue reading.

If any company wishes to add their perspective, please send the response to balu@medianama.com

 

Written By

I'm passionate about technology and gaming. You can follow me <a>@chupchap</a>

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

Views

News

The US and other countries' retreat from a laissez-faire approach to regulating markets presents India with a rare opportunity.

News

When news that Walmart would soon accept cryptocurrency turned out to be fake, it also became a teachable moment.

News

The DSCI's guidelines are patient-centric and act as a data privacy roadmap for healthcare service providers.

News

In this excerpt from the book, the authors focus on personal data and autocracies. One in particular – Russia.  Autocracies always prioritize information control...

News

By Jai Vipra, Senior Resident Fellow at Vidhi Centre for Legal Policy The use of new technology, including facial recognition technology (FRT) by police...

You May Also Like

Advert

135 job openings in over 60 companies are listed at our free Digital and Mobile Job Board: If you’re looking for a job, or...

News

Rajesh Kumar* doesn’t have many enemies in life. But, Uber, for which he drives a cab everyday, is starting to look like one, he...

News

By Aroon Deep and Aditya Chunduru You’re reading it here first: Twitter has complied with government requests to censor 52 tweets that mostly criticised...

News

Google has released a Google Travel Trends Report which states that branded budget hotel search queries grew 179% year over year (YOY) in India, in...

MediaNama is the premier source of information and analysis on Technology Policy in India. More about MediaNama, and contact information, here.

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ

Subscribe to our daily newsletter
Name:*
Your email address:*
*
Please enter all required fields Click to hide
Correct invalid entries Click to hide

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ