Indian mid-market online retailing giant Myntra is taking an important first step to becoming an international brand by partnering with two e-commerce platforms in the United Arab Emirates, Namshi and Noon, underscoring the potential of Middle Eastern shoppers.
The region is being targeted because of its large populations of Indian descent, young, tech-savvy demographics and proclivity for Indian designers’ cuts and fabrics. More than one in four people in the UAE are of Indian origin, and more than 96 per cent of individuals in the country use the internet, many of them fashion-focused millennials and Gen Zers. Namshi is part of Dubai-based Emaar Group, a subsidiary of publicly traded real estate giant Emaar Properties, while Noon, a separate entity, is part-owned by Emaar chairman Mohamed Alabbar. Noon offers products in a number of categories while Namshi focuses on premium fashion. Myntra CEO Amar Nagaram is looking to quintuple sales through the partnership over the next two years with Indian-origin brands selling casualwear for a fashion-conscious consumer.
“Our research teams have identified many high-growth potential channels across the globe,” said Nagaram. “Among these, the majority of growth channels identified were from the Middle East and Southeast Asian markets, primarily due to similar fashion preferences and large Indian migrant population.”
Since its founding in 2007, Myntra has been a rising star in Indian fashion. Although Nagaram won’t discuss financial performance, the e-tailer doubled its revenue last year, according to the Press Trust of India, the country’s largest news service. While the company was not profitable in 2018 or 2019, the reports say, it has built a loyal and growing following on the strength of its wide array of colourful designs, a user-friendly platform and special events, including a four-day sale last June in which it sold more than 10 million items.
While Myntra has focused its business domestically until now, the UAE partnerships may foreshadow its approach to other foreign markets. Nagaram said the company is already eyeing Southeast Asia, a region that also has a considerable population of Indian heritage and strong e-commerce players who could serve as partners. “Our goal is to offer Indian-origin brands to fashion-forward consumers in the UAE through our partners, and chart an international roadmap with the idea of local to global,” says Nagaram.
It also comes as more Indian fashion companies are looking to expand to the Middle East, which has the world’s highest digital penetration and online spending potential, according to Bain. Last year, many major designers, including Anita Dongre and Tarun Tahiliani, participated in flash retail events in the UAE’s capital city, Dubai.
Earlier this year, Indian designer Ritu Kumar, who started her brand in the 1960s and received a $16.6 million investment from private equity firm Everstone in 2014, announced her own partnership with Namshi to sell items from its high-end label Ritu Kumar and its ready-to-wear line, Label Ritu Kumar. The brand has already been selling products in Europe and America, including the company’s popular print dresses. But Ritu Kumar’s managing director Amrish Kumar says that the Middle East is a potentially more lucrative market because of its buying power and similar clothing tastes to those in India, provided brands stay true to their identity.
“It’s still early days for Indian brands in the Middle East,” Kumar says, adding that it’s a competitive market. “However, the Middle East could be a great platform for brands that are in sync with their personality, offering and target audience. If you’re bringing something new to the market, then there is potential.”
Myntra is already planning a significant marketing push in the region, including a social media campaign on the Namshi and Noon platforms, app banners and celebrity-driven advertising, including appearances by Indian actor Hrithik Roshan on behalf of the fitness brand he co-founded, HRX.
The move activity comes nearly three years after Dubai-based entrepreneur Ghizlan Guenez’s luxury platform The Modist, a trendsetter in Middle Eastern fashion and online retail, had discussions with a number of Indian designers. The website closed earlier this year, a victim of the Covid-19 pandemic, but Guenez sees potential in the Middle East for Indian designers’ brightly coloured, casual clothing. She said that Indians in the region made up a good deal of The Modist’s traffic.
“Buyers in this region are now looking for something different,” Guenez says. “They like vibrant styles and bold prints, so if an Indian fashion label has a product that stands out, it could do well.”
Myntra has proven nimble in the global pandemic, accelerating a planned shift to casual and athleisure wear as more people worked at home. The company will sell more than 500 designs on Namshi and Noon, mostly in these categories, from several of its private labels and a few outside fashion lines. “With working from home becoming the new normal, comfort wear categories like T-shirts and tops are the major buys followed by dresses, jeans and shirts,” Nagaram says.
The move to more casual clothing surprised some Indian fashion observers, who have questioned whether there would be enough demand for generic T-shirts and other basics that are already widely available from non-Indian brands.
“International shoppers do not need or want to buy basics (plain T-shirts with pop culture graphics) from Indian brands as they have them in abundance in their countries and are often ahead of India in riding fashion trends,” says Sahil Anand, consultant at New York-based Cedar Consulting’s global consumer and retail practice. “It needs to be special either by having a strong Indian aspect to it (international customers love this), sustainable (very popular nowadays), or super fashionable.”
With these ingredients in place, “it is definitely possible for Indian fashion brands to play the international e-commerce game”, Anand adds.
He says that Indian companies will need to study “the market and consumer preferences constantly and adapt quickly to stay relevant”. They will also need to pay extra attention to online search patterns. “There is no better online shopper than a shopper with high levels of intent who is searching for exactly what you sell on your page,” he says. “Costs of customer acquisition are also lower. It really is a win-win situation.”