Myntra Enters A Tough-To-Crack Market
Myntra takes the plunge as wearable euphoria fizzles.
Myntra launched a smart wearable device as India’s largest online fashion retailer bets on standing out in a crowded market that’s slowed down after initial euphoria.
The retailer, owned by Walmart-backed Flipkart Online Pvt Ltd., introduced Blink Go that will take on smart wearables from Xiaomi, Goqii, Fitbit and Titan, besides Apple Inc and Samsung Electronics. That comes two months after it acquired Witworks, a little-known startup that makes smart wearables.
“Being smart is the way we think that will add value to the customers,” Jeyandran Venugopal, chief technology officer at Myntra, told BloombergQuint in an interview. It wants to make smart shoes, connected earphones, smartwatches and more by the end of 2018.
The market in India is still nascent as 2.7 million wearable devices were sold last year, according to research firm IDC. That compares with 124 million smartphones. Despite being a nation with half of $1.2-billion people under 25 years of age, sales haven’t picked up at an expected pace. Growth slowed from three-figure to single-digit in two years, Jaipal Singh, Associate Research director at IDC, said over the phone. And there is stiff competition, with Xiaomi in the lead.
Investments have fallen too. Compared with $18 million in 2015, wearable makers raised just $1 million in 2017, according to data compiled by Tracxn.
The initial excitement around smart wearables has settled now, Singh said. “This is because wearable in its present state is more a fashion statement or an accessory, and yet to come up with a proper use case.”
The Cheap Sells More
Priced at around Rs 4,199, Myntra’s Blink Go has a colour display with a heart rate monitor, sleep tracker, beside the basic features, and claims to be water resistant. The company, however, is selling it at an inaugural offer of Rs 1,679.
Wearables and smartwatches are available between Rs 650 and Rs 30,000 in India. Almost two-thirds of the wearable market is less than $25 (about Rs 1,625) in India, Singh said. Devices below Rs 5,000 ($75) offer features such as sleep monitor, heart monitor, besides fitness data.
That’s also a reason why Xiaomi leads with a 49 percent market share, followed by Goqii, according to the latest IDC report. All Xiaomi’s wearables cost $25 or less. Goqii offers a tracker that monitors heart rate and includes a six-month subscription to the company’s health management ecosystem with personal coaching and is priced at around Rs 3,999 ($60).
For Myntra, that turned profitable last year and has a gross merchandise value of $1.2 billion, the focus is not at generating revenue at the moment, Venugopal said, but to acquire market share.
But brands are struggling to ensure stickiness, which is as low as three-to-four months, Tarun Pathak, associate director at Counterpoint Research, told BloombergQuint. “While hardware and style are important factors but the thing that will ensure stickiness is how players are using data.”
IDC’s Singh said Myntra will find it hard to break into the top league.
The Ecosystem Challenge
Myntra will create its own software platform—Myntra wearable platform. That will connect all its wearable products and also those developed by third-party device makers, according to Venugopal. It’s looking at an ecosystem similar to that of Apple and Samsung.
And creating that ecosystem is not easy. The only ones that have managed so far are Apple and Google with their deep reach and a large developer network. Even Samsung hasn’t been able to win that battle, said Parv Sharma, research analyst at Counterpoint. Settled wearable players like Fitbit and Garmin are struggling with their own OS, he said.
“It is easy to build an operating system but for an ecosystem to be successful, you need to have developers and for that, you need to have a good user base too,” he said. “It is going to very difficult for a player like Myntra.”