Indian fashion and lifestyle portal Myntra announced launching a new hybrid marketplace wherein it shall allow local offline stores and boutiques to sell their products through the Myntra website. It will not store inventory of the local retailers, but will connect them to buyers.
The new marketplace is expected to be launched in April and is reported to be a move by Myntra to increase its profit and expand its reach to smaller cities and towns in India. However, there is still no clarity in terms of who will fulfill the logistical needs in the model. Also, the website is yet to confirm whether the new marketplace will function through a separate platform or will be attached to the parent portal.
The announcement follows Myntra’s recent funding of US$50 million from PremjiInvest. Myntra has earlier shared that the funding shall be used to build its marketplace platform, related technology stack and strengthen its mobile strategy.
Seattle-based Amazon was one of the first players to initiate this marketplace model. The portal stocks no inventory in India and connects buyers to sellers through its website.
Flipkart also followed Amazon’s move and announced its hybrid marketplace model last year. Through sellers.flipkart.com vendors can list their products on the website and connect to potential consumers. The company charges a business fee of six to 10 per cent for selling products on its website.
In the maturing Indian e-commerce space, the marketplace model has proved to be beneficial mainly due to reduced capital expenditure as there is no requirement of inventory and being able to offer more variety without the hassle of space crunch. Indian online deal website, Snapdeal.com converted completely to a marketplace model for similar reasons.
However, with websites such as Amazon, Flipkart and Snapdeal already in the space, Myntra will have to work smartly to differentiate in terms of its vendors and marketing.
Since its inception in 2007, Myntra has raised nearly US$75 million from investors such as Accel Partners, Tiger Global, IDG Ventures and PremjiInvest. The portal is known for its constant change in proposition with changing time. However, one can only wait and see how this change will impact the company.
e27 has reached out to Myntra to get more details in terms of the business model, logistics strategy and vision for its new move. Watch this space for more…