Myntra’s q-comm offering a step into the unknown for the sector: Experts

Bengaluru: Walmart-owned e-commerce player Flipkart has now entered the booming quick commerce sector with not one but two offerings. Flipkart Minutes was launched in August and is being scaled up in various cities.

And the company’s online fashion retailer Myntra, last week, launched M-Now, promising delivery of clothes and accessories within 30 minutes of ordering. This is the first quick commerce app to move away from groceries and household provisions.

How well these offerings do will depend on a number of factors. Experts believe that quick commerce companies are expanding their offerings to test the proverbial waters.

These companies, backed by top venture capital funds or retail giants, have changed the way Indians shop, disrupting the business of brick-and-mortar stores. While analysts remain optimistic about the sector’s growth, some are skeptical of the steep diversification.

“For now the grocery and fast moving consumer goods (FMCG) category is very strong, followed by beauty and personal care and other small verticals. Apparel as a category may not see a strong acceptance on quick commerce because it is a planned purchase. We haven’t seen this category pick up or do well on quick commerce until now, only basic things like socks which is usually an impulse purchase. Myntra is just trying to test the market,” said Karan Taurani, senior vice president, Elara Capital. 

Others believe that the apparel vertical will see growth, provided that companies are able to manage the expectations of the customers, which includes fulfilling the commitment of timely delivery, quality, discounts as well as hassle free return and exchange policy. 

The likes of Zepto, Blinkit and Flipkart Minutes do offer a range of lifestyle and footwear brands with Puma, Adidas, Jockey and Sparx being the most popular among all. Zepto recently added Skechers and Manyavar and said that it is building its offerings everyday.

With apparel, comes the challenge of returns and exchanges - an additional cost for both e-commerce and quick commerce companies. Industry estimates suggest that nearly 30% - 40% of apparel category products are returned.

“Initially when the e-commerce business was launching or just in its nascent stages in India, the goal was purely market penetration. So, the cost will be higher for them initially but it is an entry strategy,” said Sonal Arora, Country Manager, Gi Group. 

Industry experts believe that companies might make changes to the fee structure when it comes to rapid delivery of apparels, and even on its return and exchange as it is going to take a hit on the profitability of the already loss-making firms. 

“They can't not have a return policy which is simple and easy otherwise they will lose out on customers big time,” highlighted Neeti Sharma, chief executive officer, TeamLease Digital. 

While rapid delivery apps continue to expand their product offerings, they cannot provide all brands under one roof. “The disadvantage of dark stores is that you cannot store the kind of range like an e-commerce format. Companies will be able to keep less inventory,” said Harish Bijoor, brand strategist.

However, this will also allow companies to understand demand from the customers, especially when it comes to lifestyle and clothing products. 

Logistics remains a big factor. However, clothing remains a low margin and high volume business and partnering with brands might eat up the miniscule share.

While quick commerce’s penetration in the non-metro markets is too nascent to draw a conclusion, experts suggest that they are most likely to see a better response, given the lack of branded offerings in those cities.