Student’s Name
Institutional Affiliation
Myntra and E-commerce
Introduction
Many businesses have developed from ancient ways of performing business operations. In the current society, there do exist a lot of companies that allow customers to make purchases through online platforms (Laudon & Laudon, 2014). Indeed customers can enjoy benefits like delivery to their homes and reduced time to access a lot of products on the same site. The danger, however, occurs the organizations that deal with E-commerce because for some. Various companies are getting pressure and losses due to the use of websites to trade platforms because of the diversity of technology. This paper uses a case study of Myntra organization to illustrate how firms can suffer from E-commerce. Despite the danger, there is a proposed solution that will help such companies to regain their original status of high revenue gains.
Myntra
Myntra is a company that provides fashion products to customers over the internet. The company originates in India and has established the main office in Bengaluru (Roy and Telang, 2018). The company provides customers with the privilege of purchasing a wide range of products, including clothing, footwear, personal accessories, jewelry, watches, sunglasses, backpacks, bags, and even own care products (Roy and Telang, 2018). Myntra serves three kinds of population segments, from men and women to kids. Consumers can purchase products through an in-house platform known as Style Studio, where the firm showcases the products.
Myntra has a fluctuating annual revenue following the annual returns report. The industry partnered with several investors in 2017 to accumulate capital. A total of 7 investors, including Accel Partners, New Enterprise Associates, Tiger Global Management, Sofina, Kalaari Capital, IDG Ventures India, and PremjiInvest, joined hands raising a total of $334.9 million.
Myntra has a wide range of competitors since it is an e-commerce service provider. The top competitors of Myntra are HSN, Amazon, Flipkart, Snapdeal, LimeRoad, Yepme, Voonik, GoRootz. These competitors are not solely located in the same place since they all have a common trade platform, which is the internet. For instance, HSN is found in Saint Petersburg, while amazon has branches in several cities like Seattles, Brisbane, Melbourne, and Sydney. Myntra has 584.6 thousand followers on Twitter, a drop rate of 0.4% month over month, and 0.6% quarter over quarter.
Inefficiency: Reduction in revenue
The company began with a revenue of 4.27 billion rupees in 2014, which rose to 20 billion in 2017. However, the company realized a massive drop in annual revenue from 20 billion to 4.3 billion rupees in the period 2017/2018. As of 31 March 2019, the operating revenues of Myntra Designs Private Limited was more than INR 500 crore. The company accordingly suffered a 78.6% decrease in revenue. In the same manner, regulatory documents depict that Myntra has suffered a book networth loss of 539.20 crores in the previous financial year, 2018-19.
Proposed Solution:
Customer Lifetime Value (CLV) is the most commonly used model in conventional marketing. However, companies that engage in E-commerce can adopt new ways that will result in a revenue increase. There are some fundamental factors to consider when choosing a model for online trade. One of the considerations is regarding consumer behavior (Laudon & Laudon, 2014). The attitude of the consumer will affect the performance in terms of the number of transactions (Laudon & Laudon, 2014). Moreover, predicting customer value also stands out as a critical concept in the maximizing the amount of revenue realized from e-commerce.
E-commerce companies like Myntra should countercheck the reaction of their customers. First of all, Myntra should measure the value of its customers, who are mostly online-based. To gain a competitive edge over potential business rivals, knowing the level of trust of customers is a big step (Laudon & Laudon, 2014). Furthermore, Myntra will generate good policies concerning technology that will improve trade only when it is in a position to predict the value of customers. Web services are low-cost technology that is significant to the rise of the business.
As the number of customers increases, there is a lot of data traffic that slows down trade. Too many customers logging in onto a company’s website usually causes inefficiency. One of the reasons for slow business operation is the high repetition of requests and the occupation of large bandwidth sizes. When customers feel that transaction is lagging, they tend to withdraw purchases while others look for alternative options to get products (Laudon & Laudon, 2014). Myntra should, therefore, invest more in the types of software that will provide fast and flexible ways of improving customer transactions.
User interfaces are effective time and again. User-adaptive software systems have greatly improved how customers purchase products online (Laudon & Laudon, 2014). However, Myntra should consider more effective systems that also monitor the relationship with customers. Such systems will enable Myntra to attract a wide number of potential buyers of the products. Some people who visit websites are usually visiting. If Myntra can implement new systems that look attractive, they might as well get the visitors to try out some of their products. A system will only attract a potential buyer when the relationship developed is friendly and inviting. Personalized websites manage the relationship with customers is a key factor in increasing revenue for an E-commerce company such as Myntra.
Myntra should counter the challenges that come along with E-commerce. Many ways can improve customer satisfaction and increase sales. One way is by the use of promotional activities such as free shipping, discounts, and gifts. However, Myntra can also focus on differentiation and innovation as supplementary methods that differentiate them from competitors. Such innovations include offering customers with support on how to purchase products through the websites (Laudon & Laudon, 2014). The type of support system implemented needs to improve on the security and make the consumer more interactive.
Technology Required
Online trading companies such as Myntra can join service-oriented architecture to improve services. A service-oriented architecture is a software architecture that is developed by software engineering. Myntra can purchase an SOA which will integrate all of its activities (Ma, 2008). In the SOA, all functions starting from purchase to delivery are integrated on the same platform but still maintaining independence (Laudon & Laudon, 2014). Consequently, the independent interfaces will have a defined sequence that leads to the whole process of trade.
The SOA can generate various advantages to the business. For example, Myntra link the various parts of the E-commerce process like the suppliers of products to the consumers. Furthermore, outside parties may also come in as part of the software. Myntra can tame the SOA to link each consumer or seller without necessarily availing a separate software that buyers log in to when looking for products (Ma, 2008). S is a cost-effective application that reduces the cost of entering and leaving.
SOA also simplifies the operation and maintenance process. There are times that the company would want to amend on its online platforms. These changes usually mean that there will emerge new or changed website platforms. Consequently, these changes will cause the development of hundreds of chains. However, SOA reduces the number of bridges because only one integration point is included instead of the hundreds (Laudon & Laudon, 2014). Myntra can include new systems and platforms into the already existing ones, as if nothing had changed. With SOA, the cost of improving and deploying new services reduces.
Conclusion
Myntra is an online shopping company that deals with a variety of products. In the last financial year, Myntra has faced a challenge concerning their revenue. Supposedly, in the last financial year, the company has realized a gross annual revenue loss of 539.2 crores, which is equivalent to 78.6% downgrade. Following such adverse reductions, the company needs to scrutinize all the transactions that happen across the websites critically. Through the incorporation of all services performed on virtual websites, Myntra will reduce expenditure on maintenance and servicing. When the company reduces the amount invested in purchasing and maintenance of new platforms, then the amount of revenue realized will also increase by the proposed amount. A reduction of money spent on servicing websites by 20%, in turn, raises the amount of money saved into revenue by the same 20%. Therefore, the company should consider implementing SOA to make online trade more efficient.
References
Laudon, K. C., & Laudon, J. P. (2014). Management information systems: managing the digital firm. Pearson.
Ma, Q. (2008). A review of emerging technology trends in E-commerce. International Technology Management Review, 1(2), 1-15, DOI: 10.2991/itmr.2008.1.2.1
Roy, S., & Telang, A. (2018). Myntra- an online E-commerce to a mobile commerce player. International journal of applied engineering research, 13(5), 2499-2503, http://www.ripublication.com