Flipkart's one fashion brand strategy may put Myntra, Jabong out of style

Given the recent flurry of developments within e-commerce giant Flipkart, the future of fashion marketplaces Myntra and Jabong is being hotly debated. Will there be just one brand standing at the end of the reshuffle? Will Myntra and Jabong be subsumed as minor labels within the larger cover of Flipkart Fashion or will both find their way into the overflowing bin of trashed digital brands? Under Walmart, the majority stakeholder in Flipkart, the future of Myntra and Jabong is uncertain.

While Flipkart has its own fashion marketplace and an exclusive band of private labels and brand partnerships, Myntra and Jabong have added heft to its fashion play in recent years.  The two operated as separate entities until recently, but it has just been announced that their  technology, revenue, marketing and creative teams will be combined.

Myntra has been driving Flipkart’s offline push by setting up retail stores in several cities and with Jabong, has brought in about 12 million-odd customers, according to its own estimates, into Flipkart’s fold. This is still a small subset of the 100 million customers that parent Flipkart claims to have, but their influence on the fashion market has been significant. 

Alia Bhatt has been recently signed as brand ambassador for Flipkart Fashion

However e-commerce analysts do not see much of an impact, in the eventuality of their dissolution or deletion from Flipkart’s fold. This is because digital brands do not have the same emotional connection with consumers as traditional brands do, they say. 

Two examples illustrate the point. Brand stickiness is best embodied in the well-documented Thums Up-Coke story in the country. Even when the global cola giant sought to shutter the brand down, it could not do so given its mass appeal. In contrast, when Ola shut down Taxiforsure, a fellow radio-cab brand, there was hardly a whimper. The point is that while ecommerce players have spent vast amounts on marketing their brands and customer acquisition initiatives, the relationship is largely based on discounts and offers. 

KV Sridhar, founder and chief creative officer at Hyper Collective notes that in India none of the e-commerce brands, save the ones right at the top, have managed to create a unique identity. “When your sales depend on the extent of discount you can give, customers are not really being loyal to you. Most of these brands have built their base on discounts rather than creating an emotional value for customers,” he said. Consequently, as long as consumers are seeking only discounts, they will not be bothered by a possible dilution of the two brands. 

Flipkart Fashion currently holds around 35 per cent of the total online fashion market in India. Together the three e-commerce fashion portals account for almost 60 per cent of online market share. The online fashion market in India, which currently stands at around $4 billion (Rs 260 billion), is estimated to touch $15 billion (Rs 975 billion) in five years. The fashion market in India is currently estimated at $70 billion, of which only 25 per cent is organised. 

All three players have crafted their identities on the basis of fashion styles, private labels and brands on their portals while working within carefully selected price ranges. But experts point out, this is common strategy, not unique to any one marketplace and if the single entity that emerges at the end of the reshuffle is able to plot a similar brand-customer-price relationship, it could keep customers in the Flipkart net. 

Among the key attributes that online brands bring to the table is the vast amount of customer data at their disposal. This helps them map customer behaviour and brand preferences and maximise their returns from their relationships with both. The new entity would have access to the combined data from the three marketplaces and could potentially gain their favour by sharply targeting their products and price offers. 

“I think it makes total sense that Jabong and Myntra get integrated into Flipkart Fashion because finally, Flipkart's singular motivation is its battle with Amazon. And consolidation seems to be an essential strategy,” says Zubin Sarkari, founder, Glamrs, a curated fashion content platform.

There is another angle that Flipkart Fashion or the emerging new entity would need to look at say experts, and that is organising the brand around the rapidly growing army of private labels that have gathered under the Myntra-Jabong umbrella. The idea is to offer products at price points that don’t compete with established brands but offer consistent quality. In other words, the platform identity is synonymous with that of the products it sells. 

Myntra and Jabong have a customer overlap of almost 28 per cent. Myntra has always focused on the mass premium fashion segment where it has emerged as the leader, while Jabong focuses on luxury brands, global labels and the premium fashion segment. According to a market report that Myntra released in March this year, e-commerce is a key channel for fashion and the online fashion market is projected to grow 3.5X from $4 billion to reach $14 billion by 2020.

There are fears that Flipkart may lose out on the potential surge if it loses its grip on the brands that have helped build the market. The threat of Amazon Fashion eating into its share also looms large. But these fears may be overrated. “The Indian consumer is not inordinately loyal to Myntra or Jabong, or any other e-commerce player for that matter. So brand erosion is not a worry,” says Sarkari. He advocates consolidation, which would widen the overall footprint, enhancing the product/brand mix, and offer consumers everything they could possibly want, he added. 

Brand trail

• Myntra was launched in 2007 as a gift personalisation platform, moved to a fashion marketplace model in 2011
• Jabong launched in 2012, it splashed heavily on advertising right from the year of its launch, while Myntra took four years before it released its first television campaign
• Myntra was acquired by Flipkart in 2014, in 2016 Jabong was acquired by Myntra-Flipkart