The Economic Times: May, 2014
New Delhi: The story of Indian e-commerce, in a way, is the story of the funding it has attracted. Even the much talked about Flipkart-Myntra merger has been scripted mostly by their common VCs (Accel Partners and Tiger Global).
In many ways, the India e-commerce industry is following in the footsteps of the Chinese e-commerce industry. China e-commerce market grew from US$ 3 billion in 2009 to US$64 billion in 2012. However what is more interesting is the change in category market. Over the years, apparel and footwear segments have grown phenomenally in the Chinese e-commerce space. The fashion wear segment now lags behind only the consumer electronics segment and that too by a small margin.
Not surprising and quite similarly, Fashion & Apparel (F&A) is a big segment in India; it's next only to electronics by value in the Indian e-commerce space. Also, apart from horizontals like Flipkart and Snapdeal (Those who sell everything), the fashion and apparels segment has attracted the maximum funding.
According to data provided by Juxt, Indian online retail (excluding both travel and services such as Redbus, Bookmyshow etc) has attracted a cumulative $1650.5 million funding between 2009 and now. Out of this, while 65 per cent funding has gone to horizontals, 25 per cent has gone to Fashion & Apparels including jewelry.
Flipkart & Myntra, who are now a single entity (though they will operate differently), have together garnered 40 per cent of the total funding invested in Indian e-commerce so far, according to Juxt Data.
Also, going by Alexa rankings, Myntra ranks higher than global popular online fashion retailers like Asos in UK and Vancl in China. And this is why this acquisition, say analysts, makes a lot of sense for Flipkart. According to Shyamanuja Das, Director and Head, Business Research, Juxt, "One of the great synergies between Myntra and Flipkart is the excellence in customer service that both have focused on. However, a fashion brand like Myntra requires more active engagement with its customers; Flipkart, which also did that quite well when its focus was more on books, is now mostly competing on price and delivery advantages. It remains to be seen is how the value that Myntra has built as a brand is retained."