12 June 2023, Mumbai
India's second-largest fashion e-tailer, Myntra, has initiated a convenience fee of Rs 10 on orders exceeding Rs 1,000, as part of its efforts to achieve profitability.
Move Aims to Offset Costs
With daily order volumes estimated at five lacks, this fee is expected to generate a substantial corpus. Customers placing orders below Rs 1,000 already face a fee of Rs 99.
The convenience fee applies to all customers, including members of Myntra's membership program, Myntra Insider, making it an additional charge separate from other levies. Myntra justifies this fee by highlighting the technical expertise, brand aggregation, and post-sales support it provides.
Encourage Customer Loyalty
Myntra's average order value (AOV) is approximately Rs 1,400, making the Rs 10 fee significant. However, analysts believe that loyal customers, coupled with the brand's market share, are unlikely to be deterred by the fee.
In addition to the convenience fee, Myntra has implemented measures to curb returns, such as penalizing customers with higher return volumes and partnering with brands to offer non-returnable products with upfront discounts. These initiatives aim to optimize operational efficiency and reduce costs associated with returns.
While analysts view Myntra's steps as positive for the industry's profitability, opinions differ regarding their impact on customer experience. Some expect other companies to follow suit, while others caution that additional fees and complications in the return process may discourage shoppers.
To Boost Profitability
Myntra's recent moves reflect its drive to achieve profitability amid rising logistics costs and promotional spending.
