The online fashion retailing industry in India is burgeoning, and it owes a lot to the country’s large population on the Internet. As of 2012, Internet user base was about 137 million – with penetration of Broadband Internet growing at a whopping 20% per month. There is also a growing community of mobile Internet users, which is currently estimated at about 27 million.
According to Forrester Research, the e-commerce market in India is the fastest in Asia Pacific region with CAGR (Compounded Annual Growth Rate) of over 57% between 2012-2016 – worth USD 2.5 billion in 2009, went up to USD 6.3 billion in 2011, and to USD 14 billion in 2012.
Ecommerce Industry Challenges
There are challenges related to operations, logistics, infrastructure and bandwidth that ecommerce companies still grapple with. Key among the challenges are:
Lack of trust on credit cards in India led online retailers to offer Cash-on-Delivery option, which is an expensive proposition, with manual intervention taking away efficiency gains of online retailing
Service-based online players have to spend on having efficient sales and operations manpower to ensure multiple service offerings
To overcome logistics and operational challenges, e-commerce companies have to invest heavily on facilities and other infrastructural aspects
IT infrastructure hosting companies in India lacked understanding of the dynamics of ecommerce industry
Percentage of buyers in the expanse of Internet users in India is still way below the global average
From infrastructure perspective, India has a way to go for providing ecommerce companies the ground to grow and reach out to the large expanse of online users that are predicted to emerge in India
Within the online retail industry, the online fashion segment is growing fast. Numerous online retail sites have been launched in the past few years to claim their share of the space.
Competition has forced small and big online fashion shops to innovate to try and stay ahead of competition. Their success in sustenance and growth depends largely on delivering high quality user experience, website performance, modes of transactions (debit and credit cards, payment gateways, CoD, etc.) and simple and improved online user experience, and competitive pricing.
Merchant of style, Myntra.com
Myntra Designs (privately held organization) was established by three IIT alumni Mukesh Bansal, Ashutosh Lawania, and Vineet Saxena – founded in a three-bedroom apartment in south Bangalore – in February of 2007. Myntra has been funded by Venture Capital funds like IndoUS, IDG and Accel Partners.
The company started off in the business of personalization of products, and soon expanded to set up regional offices in New Delhi, Mumbai and Chennai. It began its operations in the B2B (business to business) segment with the personalization of gifts, which included T-shirts, mugs and caps to name a few. However, in 2010, the company shifted its strategy to becoming a B2C (business to customer) oriented firm, expanding its catalogue to fashion and lifestyle products.
In its first avatar, while selling personalized merchandise – T-shirts or key chains with company logos or personalized statements – Myntra even invested in offline kiosks to sell its wares.
The B2C shift – towards end customers – called for devising a simple and effective ways to reach out to customers, innovative payment models such as cash-on-delivery. The website, Myntra.com, was redesigned to suit the need of online shoppers, making it more consumer friendly. They also expanded their warehousing capacity to deal with the surge in orders.
Myntra focused on improving its back-end services by deploying a 24-hour call center, setting up a dedicated warehouse in Bangalore and fine-tuning the processing and delivery of orders. In an increasingly fragmented market, Myntra has chosen its niche carefully – it sells the latest and most popular fashion merchandise online.
Myntra currently offers products from more than 500 Indian and international brands. These include prominent brands such as Adidas, Nike, Puma, Catwalk, Inc 5, United Colors of Benetton, FCUK, Timberland, Avirate, FabIndia and Biba to name a few, and some recently introduced labels such as – Roadster, Sher Singh, Dressberry, Kook N Keech and ETC. There are also casual and dressy footwear for women from Catwalk, Carlton London and Red Tape. In July 31, 2012 Bollywood actor Kalki Koechlin launches Myntra’s ‘Star N Style’ feature.
In 2013, Myntra acquired San-Francisco-based Fitiquette, a developer of virtual fitting room technology.
IT is the Backbone at Myntra
IT that runs these service offerings at Myntra is at the heart of the company. The IT team develops all applications internally, that forms the backbone of all the services offered to end-users. “IT operations and IT infrastructure are very critical business parts for us at Myntra”, says Shamik Sharma, Chief Technology and Product Officer at Myntra Designs.
The engineering team at Myntra is a strong 80-member group that works on the technology – applications, services and infrastructure, product design, maintenance and innovation. About 10 IT professionals manage data center operations at Myntra.
On the applications side, Myntra is mostly on open source platform. All applications are built on open source, and the company has implemented Big Data analytics for real-time data analysis.
“IT in Myntra is divided into two parts essentially. On one part is the ecommerce portal – the visible part when consumers come to the site to buy online. On the backend is the Enterprise Resource Planning software (ERP), that automates all our business processes – warehouse management, deliveries management, inventory system that tells us how many items we have in stock, reorder times and talks to our suppliers as well,” says Shamik. Alongside, they also manage customer relations through a CRM app.
On the infrastructure side, Myntra was initially hosted at Amazon AWS center at Singapore. In 2011 they moved their entire customer facing applications and servers to Netmagic’s data center facility at Mumbai. They host about 80 servers – of different configurations. Some servers are still hosted at their previous facility, where they run their Hadoop jobs, backup services and some back office applications.
Within the farm of servers that are hosted at Netmagic data center, about one third of them are used as web servers for serving the ecommerce portal. Several servers run services such as payment system that talk to credit card companies and banks. “We run a search and a caching server – which is used to cache content of the website – on a few servers,” explains Shamik. “We have a few servers that run the back office application, the ERP software,” he adds.
All the IT infrastructure is on Dell – the servers, etc. – and we procure them from Dell via Netmagic,” says Shamik.
Challenges facing Myntra
The key challenge facing Myntra when they were hosted at the Amazon center at Singapore was network latency. “The main challenge we saw was network latency, network robustness and reliability. What happens in the previous setup was that every user accessing the site from India had to be routed to Singapore that adds quite a bit of latency, and thus adversely affecting user experience,” claims Shamik.
The second challenge or factor prompting Myntra to move to an Indian facility was network reliability and robustness. “The network connection is not only slower, had higher down time and not predictable at the older facility. This was another big challenge for us,” says Shamik.
The move to Indian based service provider was imminent for Myntra.
They also wanted better control over their infrastructure that was proving to be difficult at the Singapore facility. “We wanted more control on what infrastructure we run our business on – the ability to choose specific server types. Also, we had limited control – though there were many configurations available to choose from, we could not customize it to the degree we wanted,” explains Shamik.
What did Myntra do to address these challenges? What solution suited the purpose?
It was then, back in 2011, that Myntra took the decision to move their entire infrastructure to India – to Netmagic’s data center facility at Mumbai. “It was very easy decision for us to use Netmagic because we had heard very good things about them and they really satisfied all our primary and secondary concerns,” says Shamik.
“We have now about 80 servers at Netmagic data center all managed on an OPEX model by them. Netmagic directly talk to our suppliers – such as Dell – and procure the desired infrastructure piece for us. We pay on a monthly basis thus not having to incur capital expenditure,” explains Shamik.
They have software-based load balancers that help ease the pressure on various servers. “We use a couple of servers for load balancing and on the network side have firewalls to secure the website,” says Shamik.
Some servers are virtualized and used for development work – developers work on virtual instances for their jobs. And a server runs the caching service.
Another service that Myntra takes from Netmagic is the bandwidth that powers the website – on a pay-per-use model.
On redundancy of the website and the applications, Shamik says “we are working with Netmagic to include cross data center BCP (business continuity planning) or HA (high availability). What we do within Netmagic facility is that we have load balancers, firewalls and partitions across clusters. If one server goes down we can use other. We also take regular snapshots – frequency of every 6 hours – of our database and apps on to a parallel setup so that we can bring it back up there at short notice.”
“We are piloting Netmagic’s on-demand capability currently which helps us manage traffic during high peaks times,” claims Shamik.
One of the most important benefits of moving their infrastructure to Netmagic’s Mumbai data center is that it dramatically lowered their latency issue. “Latency of services is down by 20-25% overall after moving to Netmagic’s Mumbai Data Center. Our website show up on user’s page in almost 2 seconds whereas it used to take almost 3 seconds earlier,” exclaims Chief Technology and Product Officer, Shamik.
Another key benefit that Myntra enjoys today is better reliability and higher availability at the network infrastructure side. “We used to have a few hours of network issue each month at the previous facility which we have been able to address successfully now,” claims Shamik. “Also, we have been able to completely address customer issues of slow connections and slow page loads – a dramatic improvement in reliability and robustness of our infrastructure,” he adds.
Why did Myntra close on Netmagic Solutions to become the technology partner to outsource their IT infrastructure?
The key concern of Myntra that Netmagic solution was able to address was the latency and reliability of the Data Center. “The good thing about Netmagic is that they manage their servers very well – technical knowledge on how to run a data center was the key reason of us to choose Netmagic. Processes for seamless monitoring, implementation and configuration of hosted infra and the security process at Netmagic was very impressive and as per our needs,” says Shamik.
Netmagic has been able to address their concerns around speed and reliability of connectivity – help reduce page load issues and enhance user experience for the Myntra business.
“Netmagic is a great partner to have. Their communication processes are very effective, response to concerns and issues are quick, and are very committed to what they do,” claims Shamik. Citing an example, he adds, “we had one issue where one of the servers were not working due to a BIOS configuration issue. Netmagic support team worked with us on hourly basis – they setup a war-room and had 3-4 engineers working with us throughout the problem, and they resolved it.”
According to Myntra, the wow factor in their dealing with Netmagic was the commitment level from the Netmagic – from the highest level down to the last link.
Certainly, the future of online retail in India looks bright and the scope for expansion is tremendous. According to Boston Consulting Group, the Internet is projected to reach small towns and the low rungs of the economic ladder more quickly than retail chains will. There will be an inherent need for e-commerce companies to expand their infrastructure to reach out to and deliver quality services to this increasing customer base.
Myntra has forged a strong partnership with Netmagic that helps them scale their infrastructure based on business needs and are now on the path of rapid growth.