Myntra chief executive officer (CEO) Nandita Sinha, recently asked to also lead Flipkart Fashion, another division of the Walmart firm, says leading both businesses requires a differentiated approach.
Moneycontrol was the first to report about Sinha’s larger role, as she consolidates hold over India’s $130-billion lifestyle industry where Walmart, through its group companies, enjoys a 50 percent market share in the organised space.
“Right now is a learning phase for me on the Flipkart side. The job of both the platforms is very different, both of them play a very different role in the fashion industry so we have to keep building,” Sinha told Moneycontrol in an interview.
Sinha does have her job cut out. While Myntra is the go-to platform for premium set of customers, Flipkart Fashion is more mass market.
A growing market
Despite being different operationally, the two units have a common goal of increasing penetration of the e-lifestyle market, which stands at just around 13 percent.
The rest is unorganised. However, a higher number of people are expected to transact online and spend more on e-commerce fashion platforms, which will increase online penetration to 18-22 percent by 2028, a report jointly published by Bain & Company and Myntra said.
“It’s still early days for me at Flipkart Fashion but increasing e-commerce penetration is where all the work has to go and to kind of drive that and to really take the two engine growth (Flipkart Fashion and Myntra) into full speed is what I will do,” Sinha said.
“The opportunity for us to grow will come from both, an increase in the new customer group as well as a jump in the consumption group, as the same people transact more frequently. It's going to be a very well balanced growth.”
Over the coming months an increasing number of transacting customers and the existing base spending more online will also push the overall gross merchandise value (GMV) higher. India's e-lifestyle market is estimated to be around $40-45 billion in size by 2028, up from $16-17 billion currently.
“The increase will be enabled by easing short-term inflationary pressures, combined with structural and favourable demand shifts. That includes a rise in income, growth of fashion forward, digital native Gen Z shopper base and a surge in demand for organised and branded products,” Shyam Unnikrishnan, Partner at Bain & Company, said.
Gen Z shoppers and premiumisation would be the key as the e-lifestyle market matures.
The Gen Z shopper base, people born between 1997 and 2012, is the emerging cohort for shopping platforms such as Amazon, Flipkart, Myntra, Ajio and Meesho.
While Gen Z shoppers have a higher spending capacity, they make smaller purchases in one go as they tend to experiment more and try newer brands.
“An average Gen Z shopper spends about $7-8 per purchase, which is almost half of $14 that an average millennial consumer spends,” Unnikrishnan said.
Over the years, customers will be spend a higher amount for the same kind of products as premiumisation takes centre stage.
“Gen Z shoppers, premiumisation, omnichannel, influencer-led marketing, etc were all just themes last year but today we are seeing more and more growth happening in these access areas. They have become deeper and very significant now. In fact, investments in these areas will yield higher growth for whichever platform does it,” Sinha concluded.
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