Written By Shambhavi Anand, ET Bureau
Myntra is offering EMIs of as little as Rs 51 a month for purchases of clothes, becoming the first online fashion retailer to broaden its appeal to consumers in the extremely competitive sector.
Equated monthly instalments, which are typically offered on credit card purchases of high-value items, are now available for some products sold on Myntra that are worth Rs 1,300 or even less. However, this option is not available on Jabong, the Gurgaon-based rival acquired by Myntra for $70 million in July 2016.
Sellers on both portals claim Myntra is virtually turning Jabong — once a marketplace for exclusive international brands — into a platform for its private labels.
While Myntra declined to respond to an email seeking details about the initiative, a person directly involved in the implementation of the scheme said this has been done to encourage consumers who can buy first and pay later. It will help Myntra compete with brick-andmortar retailers, said another person from the online fashion industry.
The move will likely attract young buyers — below 30 — who are fashion-oriented and have fewer financial responsibilities, said Devangshu Dutta’s of Third Eyesight, a retail consultancy firm. It may help consumers from tier-II and tier-III cities who like to spread their expenses over a period of time, said experts.
The Flipkart-owned company has tied up with HDFC Bank, ICICI Bank, Citi, State Bank of India, Kotak Mahindra Bank, Amex, HSBC and others, which will charge 13% to 15% interest on credit card purchases of selected items that can be paid over three to 24 months.
“This will translate into lower price a customer has to pay each month. Whether it will drive demand remains a question,” Dutta of Third Eyesight said.
India’s fashion retailing is at the threshold of a digital transformation as the number of buyers with internet access increases. Over 10% of the $70 billion Indian fashion market is already digitally influenced and this share is expected to rise fourfold to about $30 billion by 2020.
This number will constitute 60-70% of the total branded apparel market, according to a report by management consulting firm Boston Consulting Group and social networking company Facebook titled, ‘Fashion Forward 2020.’
According to the report, the digital footprint has more than doubled in the past three years and it will expand rapidly as internet penetration is expected to grow 2.5 times by 2020.