Myntra PESTLE Analysis

Published in Companies category by MBA Skool Team

Myntra PESTLE (or PESTEL) Analysis assesses the brand on its business tactics across various parameters. PESTLE Analysis of Myntra examines the various external factors like political, economic, social, technological (PEST) which impacts its business along with legal & environmental factors. Let us start the Myntra PESTLE Analysis:

Political Factors:

The political factors in the Myntra PESTLE Analysis can be explained as follows:

Walmart-owned Myntra is a well-established e-commerce player, and has presence in 9000 locations in India. However, Indian regulations have only turned more stringent for e-commerce players. For instance, the draft e-commerce policy proposes to regulate deep discounting by e-commerce companies. Such a move could heavily impact the brand which regularly sells many products on discount. Myntra had to work with new exclusive seller like Sane Retails. This was in response to government regulations for, which mandated to have no more than 25% of overall sales for e-commerce platforms.

In another instance, the Indian government, in 2020, made certain amendments in ‘Consumer Protection (E-Commerce) Rules, 2020. The law mandated that e-commerce platforms would have to share more information related to the source and seller of products. The government introduced such a measure to ensure buyers are more aware of local brands, and choose these over foreign ones. This also came amidst tense relations with China on the border. However, such measures could reduce the sales of foreign brands on Myntra.

Image: company website

Economic Factors:

Below are the economic factors in the PESTLE Analysis of Myntra:

Like many fashion brands, economic factors define how business operations unfold. Although the Covid-19 induced lockdown brought sales of fashion of Myntra to a halt, it tapped newer opportunities to increase its sales.

Thus, it started selling masks and personal protective gears on its platform. In another instance, Myntra found that with work from home rules in force, people would need lounge wear and leisure wear. Thus, it sold these items to consumers. Yet, the Covid-19 lockdown has impacted the company negatively also. For example, sales fell by 20% in the month of March. This is because the consumers have deferred their discretionary spending. Despite this, the company plans to add more shoppers. Every year it comes up with End of Reason Sale that starts in December. It also tried to serve more than 1.8 lakh shoppers during its flagship year-end sale on its website and app. The company offered a diverse portfolio of more than 2500 brands ahead at End of Reason Sale.

Social Factors:

Following are the social factors impacting Myntra PESTLE Analysis:

There are lot of opportunities for e-commerce platforms like Myntra to take advantage of. For example, the government wants such platforms to grow in rural areas too. The government will help set up the logistics and even provide some funding for the same. Furthermore, if e-commerce companies collaborate to provide a common service, they can take advantage of economies of scale and share costs. Post the Covid-19 lockdown, there is a surge in online shopping as concerns of safety persist in the online mode. This surge in demand can be attributed to Tier 2 and Tier 3 cities. According to the annual report by Unicommerce, many sectors are set to gain. These include electronics, fashion and accessories, pharmaceuticals, Fast-moving consumer goods, etc. There are other factors also which are contributing to the growth. These include growth of new online shoppers, digital focus of shopping brands, preference of businesses towards D2C model. Thus, Myntra, too will gain on these factors and grow.

Technological Factors:

The technological factors in the PESTLE Analysis of Myntra are mentioned below:

Myntra is making use of new technologies like data mining and artificial intelligence. This would help its designers understand newer patterns and styles and make more sales. The brand is already tapping into consumer data to leverage its platform. It is also using augmented reality to improve the connect with its consumers. The brand is also adding more features on its app. Such features allow shoppers to rate their apparel purchases. Another characteristic is the use of augmented reality to produce unique t-shirts for its brands. So, whenever, a shopper points at such t-shirts, the deign comes live. The brand has also come up with an innovative project called as Rapid technology. The objective is to deliver apparel products in a faster manner. The project involves estimate demand and make quick response to new trends, reduce expenses and deep discounting in a more cost-effective way.

The project also entails using Artificial Intelligence systems that can recognize different shapes, designs and make related clothes.

Following are the legal factors in the Myntra PESTLE Analysis:

The legal environment of e-commerce companies in India is still evolving. There are still lot of litigations involved against such companies. For example, there are more than 322 cases against Myntra pending in the Panchkula District Consumer Redressal Forum. Many of these cases involve the company charging lower prices by deep discounts and adding taxes illegally. Also, there is lot of legal uncertainty after Walmart-Flipkart deal. The deal involved Walmart acquiring a 77% stake in Flipkart for a record $16 billion. There is lot of criticism involving the deal, with some accusing Walmart of subverting FDI rules in India. Many traders have chosen to go the legal route under the Competition Act, 2002. For example, the All-India Online Vendors Association (AIOVA), a group of 3000 online sellers filed a petition against Flipkart alleging deep discounting, preferential treatment to merchants using the platform and the Walmart-Flipkart deal. All these litigations could hurt the financial performance of Myntra.

Environmental Factors:

In the Myntra PESTLE Analysis, the environmental elements affecting its business are as below:

The brand has come up with eco-friendly fashion. These apparels use production and packaging processes that are less harmful to environment and are also easily breakable after the products’ life cycle are complete. Myntra is also collaborating with other brands to provide eco-friendly products. It partnered with Lenzing Ecovero fiber brand in October 2020. The aim was to deliver garments manufactured using eco-friendly viscose fibre. This has helped the brand make a new portfolio of environmentally-friendly clothes for both men and women. Such partnerships help the brand address evolving wants of consumers and boost its sales.

Moreover, the brand has equipped 2 of its Fulfilment Centers with solar roof panels to reduce the company’s carbon footprint. These centers are located in Bhiwandi and Bilaspur and meet more than 30% of operational demand by generating electricity. Such measures will help Myntra become more carbon-neutral and further improve its brand image and reputation in the market.

To conclude, the above Myntra PESTLE Analysis highlights the various elements which impact its business performance. This understanding helps to evaluate the criticality of external business factors for any brand.

This article has been researched & authored by the Content & Research Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

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