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How Myntra Destroyed Flipkart in Fashion E-commerce ? Myntra Business Case Study - YouTube
Channel: Aditya Saini
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Do you know why Flipkart bought Myntra?
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Okay let it be.
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Do you know how Myntra became India's biggest fashion e commerce company?
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Today Myntra delivers 1 lakh+ orders everyday.
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But now the question arises,
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that clothes and shoes are also on Flipkart and Amazon
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then what Myntra do that it is leading the market.
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And most importantly what are those business lessons we can learn and implement in our business.
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The story starts in 2010,
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when Mukesh Bansal, Ashutosh Lawania and Vineet Saxena
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this three people plan to establish an online business.
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Mukesh Bansal saw Flipkart's growth.
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And from this he knew that upcoming time is of e-commerce.
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But do you know that what Myntra is today was not like this when it started.
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You will get shocked after knowing that
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Myntra started from personalized merchandise.
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In 2010, when this 3 people started Myntra,
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Myntra provided businesses personalized t-shirts, cups, mugs, pens
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and sold them in bulk to them.
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Companies used to buy personalized things for their employees from Myntra
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and Myntra used to make lots of profit.
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But there was a big problem.
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The problem was Demand Uncertainty.
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Any company for their employees used to buy cups, bags, hoodies ,T-shirts, pens
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only during appraisal months Diwali or during functions.
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The problem was that any company only used to order once or twice per year.
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So during festivals Myntra used to make huge profits but other than that they used to wreck flies.
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Because there was no demand in the market.
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Mukesh Bansal only had one vision to create something which can impact everyone's life.
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But personal merchandising was a niche business.
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Through that they didn't impact anyone's life.
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And after this moment, now that Myntra started which we all know.
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Myntra decided to enter in fashion e-commerce.
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But there was a huge problem in the market.
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that was E commerce Scepticism.
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In simple words, fear of online shopping.
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During 2010s online shopping was not that prevalent.
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People used to fear to shop online.
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But a bigger twist comes when this things are connected with fashion industry.
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Fashion is directly linked with our Endorphins.
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Clothes and shoes are those things which makes you happy when you try them.
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You also feel nice people complement you.
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Whenever you will feel happy your brain release Endorphins.
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And whenever Endorphins are released your self-esteem rise.
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But interestingly, this doesn't happen with every item regularly.
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For example if you use iPhone
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then do you feel nice about you whenever you check your phone.
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How many people complemented about your iPhone?
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Maybe someone only did.
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This things happen with clothes.
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People compliment you about your clothes.
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That's why people take time to choose clothes of 500 rupees or 5000 rupees.
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Because no one want to mess with their Endorphins.
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Due to this people used to hesitate to buy online.
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Even if you give discounts, free delivery or CashKaro -
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which gives you cashback on shopping on Myntra.
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But still people don't want to buy clothes online.
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So to solve this problem Myntra used a powerful business strategy.
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The strategy was Easy Returns.
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It sounds simple but understand this deeply.
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People didn't bought these things because they were used to buy after touch and feel.
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And even if someone bought online they always used to worry.
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What if the thing would not be good then what will I do.
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To remove this fear Myntra used easy returns policy.
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You buy them and if don't like return them.
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And after this small change Myntra made people addicted to online shopping.
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In 2012 Myntra had almost 350+ Indian and international brands.
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And till 2014, Myntra used to sell 1.5 lakhs products of 1000+ brands.
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The question is that easy return policy could given by anyone
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and other e commerce companies also gave it, but why was Myntra so successful ?
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So understand this carefully.
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You purchase anything when you find its value more than it's price.
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But when it comes to fashion, the game changes.
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So only two types of people buy clothes
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NO 1 - LOOKS
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NO 2 - QUALITY
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Let me explain.
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NO 1 - LOOKS
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This type of people only purchase clothes for looks.
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They don't care about cloth's quality, its top-notch or not.
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But dress should be very good in looks.
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NO 2 - QUALITY
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This type of people always check quality for buying clothes.
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They always check cloth's fabric, its soft or not, its durable or not, how long will it last.
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Let me share a fact,
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80% women buy clothes for looks 80% men buy clothes for quality.
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Now you would be thinking
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WHY???
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So the answer is Instruments of Status.
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We keep those things with us which raise our status.
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And these things change time to time.
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Like when you are small you want to gear cycle, iPhone in youth,
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after that a luxury car, these all things are instruments of status.
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To show our status little above.
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But for women their biggest status of instrument are clothes.
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Not being sexist but,
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Man dress to impress women
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but women dress to jealous other women.
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And due to this reason girls have more clothes than boys.
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In market also variety of men's clothing is less comparatively to women.
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But how Myntra makes sure that
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most of the clothes people have should be ordered from Myntra?
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And here comes Myntra's Value Combination.
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Myntra made a combination of these 3 values.
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NO 1 - VARIETY
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If you look on Myntra you will find many variety.
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The cloth you want you will get.
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NO 2 - EASY RETURNS
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Suppose you ordered clothes from Myntra and didn't liked it or it's not of your size,
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then you can easily return it.
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NO 3 - PRICE
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You will mostly get clothes on discounted rates on Myntra.
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And today is Myntra's Festival Sale.
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So when Myntra provides this powerful combination, so people tend to buy clothes from Myntra only.
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And from 18th Dec,
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there's Myntra's sale where there are many discounts.
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So I say if you did so much than do this much little also.
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So if you want to shop, then use CashKaro India's biggest cashback app.
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Amazon, Swiggy, Myntra, Ajio, BigBazaar
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Why do you keep this much apps on your phone?
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But no problem, I also didn't knew that
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Cashkaro app has 1500+ websites in it where you can shop and earn cashback upto 30%.
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If you will use coupon code, its discount you will surely get but
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you can also earn upto 30% cashback.
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Let me tell you, it is funded by Ratan Tata so need to worry.
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So on Cashkaro select any shopping website and shop normally as you do.
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Your cashback will be reflected in your my earnings section
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which you can easily transfer in your bank account.
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See you saved your money.
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You can transfer your cashback easily or you can convert them into amazon gift vouchers.
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For your convenience, Link in description.
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You can also download from play/app store
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but apply SAINI25 coupon code to get 25 Rs instantly.
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You are my subscribers so you will get something in return.
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So for you there is a giveaway.
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So download CashKaro and don't forget to apply SAINI25 coupon code.
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You will get 25 Rs but then order anything from there from Amazon or Swiggy or Myntra
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then don't cancel the order.
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Then any 5 from you will get amazon gift vouchers worth 500 Rs.
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It's all right but question arises,
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Why Flipkart bought Myntra?
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And acquired but why didn't merged with them?
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So in 2014, Flipkart acquired Myntra
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but didn't merged with them.
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Now the question comes,
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if don't want to merge then why they acquired ?
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So in e commerce business there are two types of models.
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NO 1 - Market Place Model
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Which means there's a market place where different sellers and buyers come.
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This place connects buyers and sellers like Flipkart and Amazon.
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So in Market Place Model goods move from sellers to buyers.
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But this is not the case with second model.
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NO 2 - INVENTORY MODEL
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In inventory model,
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the sellers keep their stock with the business through which their maximum customers come.
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There they are checked, quality checks are done
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and then from their it moves to buyers.
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Market Place Model is good those businesses which target diverse audience.
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In this selection is very massive but no standardization.
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In simple words you can buy anything from here but
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it is hard to predict the quality of these products.
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Whereas Inventory Models for those businesses whose audience are not diverse.
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Here people only come for specific purchase.
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And when we talk about fashion, quality of selection is a priority for you and as well as me.
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Flipkart operates on Market Place Model
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but from starting Myntra operates on Inventory Model.
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People faced issues on Flipkart during clothing and fashion shopping.
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And this thing Flipkart knows from starting because it will always happen in Market Place Model.
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But not with Myntra.
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Myntra's shopping experience was much better than Flipkart.
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In fact today also.
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Majority people faced less issues on Myntra than Flipkart.
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Flipkart acquired Myntra because
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they didn't wanted to miss fashion and clothing segment in E Commerce.
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But the reason behind not to merge was something else.
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So the reason was Complementary Strength
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but Individual Identity.
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So if a person want to online buy a small thing then he will go to Amazon or Flipkart.
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But if someone wants to buy clothes online, then people prefer to shop from Myntra.
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Why???
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Because people know they will comparatively face less quality issues on Myntra.
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Flipkart's brand identity is like mall
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but Myntra's identity is like a private tailor.
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Where you will get clothes of your choice, size and also fashion.
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And if you will use Cashkaro then cashback also.
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Flipkart had funds and logistic network
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whereas Myntra had strong inventory management and niche audience.
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This acquisition was beneficial for both.
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But if Flipkart merged Myntra with it,
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the people associated with Myntra's brand identity will get confused.
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People would become sceptical with Myntra.
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Because in their minds they would have Myntra's Quality control
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and Flipkart's market place's combinational potrayal.
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Like how Kingfisher did with Air Deccan.
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Acquired company in 550 Cr and then converted Air Deccan into Kingfisher Red.
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Then people started getting confused between Kingfisher and Kingfisher Red.
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And for this reason,
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Today also Flipkart and Myntra are both different companies.
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And most importantly what are those business lessons we can learn and implement in our business.
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NO 1 - ADAPTABLITY IS THE KEY TO SURVIVAL
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In every industry some changes come time to time.
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Time changes, Technology changes and Consumer behavior also changes.
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And so its important to change with time.
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When Myntra started it operated on B2B model
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but by time they converted themselves to B2C Model.
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NO 2 - FOCUS IS A GATEWAY
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Diversification is a good thing.
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But don't expect you will become market leader in every businesses.
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This is practically impossible.
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But if you focus only on business than
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there are chances that you will become market leader of that market at one time.
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And this thing Myntra did.
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Myntra was hyper focused on fashion and clothing and didn't even try in other businesses.
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And that's why they are leading fashion e commerce in India.
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NO 3 - BUSINESS BEFORE PRIDE
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Henri Fayol's one of the greatest principle is -
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"Subordination of Organization Interests to Personal Interest"
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In simple words, company's interest should come before your individual interest.
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Flipkart could easily merge Myntra under it and they would also feel pride.
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Then Myntra would have failed today.
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So always keep business before pride.
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But Ohhh from pride I remembered Washing powder Nirma is our country's pride.
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And it's story is also very interesting.
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After watching right side video you will feel it.
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