Myntra Continues to Charm Tier II and III Cities With AI Over the years, Myntra has experimented with its offerings and technology. And presently, it is riding high on its tech stack driven up by artificial intelligence and generative AI

Only a fraction, 10 to 30 per cent to be precise, of the Indian population fairly speak English. The ground number can be much lower. The majority of the population is either fluent in Hindi, their native language, or a hybrid Hinglish.

Hence, having one's offerings available only in the English language prevents mass penetration and adoption in the country. E-commerce is one such space where limiting communication options are a way to lose market share. Artificial Intelligence is being leveraged with full force across industries worldwide. And e-commerce is not privy to it. BusinessDIT noted that AI-enabled eCommerce solutions are estimated to touch the USD 16.8 billion market figure by 2030.

According to a report by Shiprocket, India is on its way to becoming the second-largest e-commerce industry by 2034. Players such as Amazon are using AI and Generative AI to create more engaging advertisements, improve product listings, and review highlights, while Meesho uses the technology for understanding and setting price points for various products. The two players have well adopted the Hinglish query facility.

And Myntra has followed the lead. In 2024, Flipkart and Myntra (a part of the Flipkart Group) held the highest market share in terms of active users with over 50 per cent in the fashion e-commerce segment. It operates in the space along with pure fashion players such as Meesho and Ajio, with the former having the highest penetration in Tier II, III, and IV cities.

Over the years, Myntra has experimented with its offerings and technology. And presently, it is riding high on its tech stack driven up by artificial intelligence and generative AI. It recently reported its operating revenue which saw a jump of 25 per cent from INR 3,501 crore in FY22 to INR 4,375 crore in FY23 and has been operationally profitable for two quarters.

Kantar TGI's 2023 report reveals that Tier II and III Indian cities are now home to a staggering 139 million consumers aged between 15 and 55. The number itches closer to the population of Tier 1 cities. Needless to say, this section is a top priority for the Bengaluru-based e-commerce player. Being a fashion-forward brand, Myntra is targeting the youth population, particularly Gen Z in the country. "If we can meet the needs of this cohort of customers who are looking for trendy and affordable fashion, that's a good problem to solve," shares Raghu Krishnananda, Chief Product and Technology Officer (CPTO), Myntra with Entrepreneur India.

"E-commerce is certainly growing quite healthily. What is driving this growth are a few things. So, one is a lot of users coming in from Tier Two plus cities. So traditionally our user base has been in metros, but that mix has changed tremendously in the last couple of years. And in fact, what we see is the majority of over 60-65 per cent of all our new users (75M) are all coming from non-metros or Tier II, Tier III cities," he adds. Nandita Sinha, CEO, Myntra earlier stated that such cities accounted for 40 per cent of international brand orders on the platform. "Over the last seven-eight years, the aspirations of non-metro customers have leveled with those of metro, but the access is different. In some cases, they have more disposable income and time," she shared at D2CIndiaxIREC2024 in Bangalore.

Its AI initiative inventory includes My Stylist, Maya, MyFashionGPT, Skin Analyzer, Hair Analyzer, Lipstick Finder, Foundation Finder, and Vernacular Search is helps the masses ask questions and find the right products without harsh barriers and basic English. "The way we look at it is that not everything needs AI," remarked Krishnananda.

For Krishnananda and Myntra, in the end, it's all about developing a better user experience. Myntra's semi-urban base has been on the rise since 2017 and it is ensuring a more localized and personalized user experience for its Tier II and III cities through AI.

Myntra goes the extra mile with its Vernacular Search. This algorithm enables consumers to browse and shop for products across fashion, beauty and lifestyle in 10 native languages apart from Hindi, including Telugu, Kannada, Bangla, Tamil, Malayalam, Marathi, Gujarati, Odia, Punjabi, and Assamese.

For instance, if you type "పసుపు ధోతీ కుర్తా" (yellow dhoti kurta in Telugu) the platform will show you the relevant products. Something which its parent company offers, but competitor Amazon does not.

"We continuously look at data patterns and based on that, we derive some insights on what people are finding useful, and where they are having some challenges. So one of the things that we saw when we analyzed search data was that a good number of people were typing in queries in either a mix of Hindi and English or in some vernacular languages. And obviously, we were not able to meet the needs of the customer," he shared.

"If people are looking to find products by doing searches in various languages, then it makes sense to be able to address and handle those queries in those languages. That's why we built this and now we can handle 11 Indian languages including a combination of Hindi and English. After this has been rolled out, query abandonment rate has dropped," he adds.

Myntra's query abandonment rate has narrowed from 10 per cent to two per cent, making it a "pretty good drop."

What's next? 2024 and beyond

It's MyFashionGPT, an offering which enables shoppers to search for specific outfit needs by typing text in a manner that closely resembles natural speech, was a brainchild of an internal hackathon, "The customers that come to a platform, about three per cent of our users use MyFashionGPT." Having concluded its latest hackathon a few weeks back, Krishnananda hints "There were some pretty exciting things that we saw, which we are waiting to take forward. So we should definitely see some of that in the later part of this year."

Talking about the trends in the e-commerce space in the next five years, he places his bet on GenAI, blockchain, and AR/VR. "I would say these are some of the technologies that will hold a lot of promise shortly, in the next couple of years," he notes.

On a number they would like to achieve in the non-metro cities, Krishnananda refrained. "We have some pretty aggressive growth targets. If you look at the retail market as a whole, specifically in the domain in which we are operating, that number is fairly small. It's hovering around 10 per cent. That way there is a lot of opportunity for growth for e-commerce in general, which is why we are fairly bullish about this," he concludes.