Mukesh Bansal of Myntra on his Mantras for Success
For someone who sounds as pragmatic as Mukesh Bansal, the passion with which he recounts his work at the helm of Myntra matches the passion of any inspirational entrepreneur that you can think of. In this conversation, Mukesh Bansal, the founder and CEO of Myntra, one India’s rapidly growing ecommerce portals with a focus on fashion and lifestyle, provides great insights into the philosophy, the operations and the future of Myntra.
A jump into the realm of ecommerce from a software background is not unheard of, but definitely not common. Mukesh Bansal has held various software engineering and engineering management roles at various startups. “Most of my previous engagements have also been around startups. So before starting Myntra, I worked for 4 differed startups as an engineer and product manager and it’s almost been 13 years that I’ve been working with startups now”he explains, when asked about his decision to his jump into the ecommerce business. His gives his Team, Technology and Infrastructure paramount priority. According to him, without the help of the best team, the best technology and the best infrastructure, it is impossible to set up a successful ecommerce business in India.
His business acumen is evident in his explanation of arriving at a business model; “A few basic things, one is you start with a very clear vision of how the business model will make money. Also, a lot of times, people make assumptions that are not validated. It is very important to know how much the business is going to cost you and how that cost is going to change over time. It all boils down to whether you’re making money or not.
“So knowing if you’re business model is right or not, doesn’t take too long to evaluate. On the ground level of operations, it doesn’t take too long to find out whether your model is working, a fair bit of time needs to be spent with the customers in validating the assumptions on which you have made your business model.”
An extension to his pragmatism is his acceptance and acknowledgement of his mistakes. An interesting insight was that Myntra didn’t look into having a technology platform for sales from the very beginning, which Mukesh recounts as one of the mistakes that he learnt a lot from. His advice for startups in hiring is to keep a high bar of entry for employees. “In the early days, we were very small and we didn’t keep a very high bar for hiring and that in retrospect wasn’t a good thing. We now have a very high bar for hiring but we would have liked it to be this way from day one”he admits.
As CEO of Myntra, Mukesh spends his time in between the management team, to whom he provides guidance in the vision of the company and its clarity in terms of goals and metrics, following up key initiatives and keeping a vigilant eye on the consumer experience front.
Logistics is an important aspect of any ecommerce company and Myntra’s model for success is its Hybrid logistics models. They have distributed the operational logistics between themselves and third party service providers on the basis of geography.
“Some of the smaller towns and third tier cities, we have outsourced our logistics to third party service provides while in bigger cities we take care of the logistics. This is primarily because we couldn’t find reliable third party service providers who could provide world class delivery experience for our customers. So almost out of necessity we had to build that infrastructure.”
As a company that has taken these operations upon themselves, it is imperative that the company employs best practices in its undertakings. In the process of supply chain management, Myntra maintains its inventory religiously. Mukesh is quick to lay emphasis on placing systems and processes so as to make everything repeatable and recorded and not be reliant on individual choices or decisions. Another area of emphasis, according to Mukesh, is laid on the rigorous hiring and evaluation criterion for employees and delivery agents so as to provide a high quality in delivery experience.
“In the early days, hiring was one of the biggest challenges that we faced. We worked from a home and people who came for interviews saw this, they used to leave at the doorstep, without even coming in. So in the beginning, we had really focused on people who wanted to be entrepreneurs. With time we have overcome this challenge.
“Another challenge that comes to mind was during the economic slowdown in 2008, where we had to concentrate on cash conservation and some of those principles are still used by us today”he reminisces when asked about the challenges that he has overcome. But as with every business, challenges appear in various forms at whichever stage that you are in and Mukesh very precisely states the challenge faced by Myntra today is in creating a balance between profitability and growth; the balance between investing to grow and staying profitable.
“Cost is a function of the capacity that you want to build in your brand; the more capacity that you want to build the more cost that you spend on it. It is also a function of how long before you need it, you’re building your capacity, for example are you building capacity 3 or 6 months in advance to the time of need. We can use lean principles to keep the costs down; doing things just in time also helps.”
“It was a good first meet with Vani (Kola). She could understand the entrepreneur’s perspective, having worked in Silicon Valley, there was a lot of cultural and contextual overlap, which helped us relating with each other. It was a good first meet and I could see that she was quite passionate about what we were doing and from thereon, Vani has been a very important board member. She has always been focused on the bigger picture and on the things that really count. I have really enjoyed working with Vani and it’s been 4 years now. She has been a very important part of the company”
Mukesh credits Vani as having helped in through their pivoting phase where Myntra pivoted from being a personalization company to being a fashion based retailing company. “We were doing too many things and the market was very niche; we knew we could make a profit out of this, but we wouldn’t be able to scale it, and so we decided to move away from personalization as a category”he admits.
On being asked about the things he wouldn’t have done if not for Vani, he says “It is difficult to pinpoint what the absence of one person can do as there are various contributions from the board members that are very important. But Vani’s greatest contribution is keeping in mind the larger picture as to what the brand stands for through the time of making short term progress”
Mukesh also credits his investors of providing Myntra with mentorship with his company. He says “Apart from funding, the investors have provided us with great Insights from a business perspective, and the best thing about them has been that they have voiced their opinions to us but never imposed it on us. This freedom has really helped us.”
Being at the top of a niche ecommerce site himself, Mukesh has some useful tips which the increasing number of ecommerce businesses can benefit from.
He says “When starting an a niche ecommerce business, one needs to see how large the market is, weather it is a 100 million dollar market or a billion dollar market and realistically what percentage of that will end up on the internet. Usually this percentage is not very high. So for example, if 10% of a 100 million dollar market is online, then it isn’t significant. This I feel is important.”
“The second thing to see is if that industry is easy to transact online or not. See if someone has already built a large online industry in the market, if not, then there are some questions that need to be addressed.”
“And lastly one needs to see where the person is geographically. For example, it is a greater risk for someone to set an online electronics store in India than it is in the US.”
However, he believes that there is enough scope for niche online businesses in the future and advices that they understand how well they can capitalize on the market.
On the contentious issue of cash on delivery, Mukesh is for it. He believes that COD is here to stay owing to its convenience and its cultural affinity. He even goes to predict that COD will be a major part of online transactions for at least the next four to five years.
His mantra for a great delivery experience is a mix of adequately fast delivery time and reliability. He professes that being a day behind the fastest in the market isn’t a big deal, and places factors of trust and reliability higher. “I believe people are prepared for delayed acquisition during online transactions and the trend will be more people focusing on the grounds of trust and reliability”he adds.
“Almost 50% of our sales come from tier 2 and tier 3 cities and I think they are going to be the biggest drivers for ecommerce businesses in India”he professes, when asked about the impact of tier 2 and tier 3 cities on ecommerce in India.
“We want to be the largest fashion and lifestyle retail in India, and whenever someone thinks of buying apparel, footware or any other fashion and lifestyle item they should think of Myntra first. Even if they’re buying offline, they should check it out online on Myntra first and then buy it”says Mukesh on his grand vision for Myntra.
Myntra also has planned tie ups with celebrities through associations with movies and events as they represent fashion sense and it is a marketing strategy that they will employ more often in the future.
With level headed leadership and astute business mindedness running through its leadership team, Myntra’s success in the recent past in not surprising, and are a force to reckon with in the race of ecommerce supremacy in India.